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Exhibit 10.8
CONFORMED COPY
CREDIT AGREEMENT
dated as of
June 14, 2001
as amended by
AMENDMENT NO. 1 TO CREDIT AGREEMENT
dated as of
July 31, 2001
among
Nortel Networks Limited,
The Banks Party Hereto,
including
Credit Suisse First Boston Canada,
as Syndication Agent,
and
The Chase Manhattan Bank of Canada,
as Administrative Agent.
--------------
Arranged by
X.X. Xxxxxx Securities Inc.,
Credit Suisse First Boston and
Xxxxxxx Xxxxx Barney Inc.,
as Joint Bookrunners and Joint Lead Arrangers
Documentation Agent
Citibank Canada
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TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions...................................................1
Section 1.02. Accounting Terms and Determinations...........................9
Section 1.03. Types of Borrowings...........................................9
ARTICLE 2
THE CREDITS
Section 2.01. Commitments to Lend...........................................9
Section 2.02. Notice of Committed Borrowing................................10
Section 2.03. Money Market Borrowings......................................10
Section 2.04. Notice to Banks; Funding of Loans............................14
Section 2.05. Notes........................................................15
Section 2.06. Maturity of Loans............................................15
Section 2.07. Interest Rates...............................................15
Section 2.08. Fees.........................................................17
Section 2.09. Optional Termination or Reduction of Commitments.............17
Section 2.10. Method of Electing Interest Rates............................18
Section 2.11. Optional Prepayments.........................................18
Section 2.12. General Provisions as to Payments............................19
Section 2.13. Funding Losses...............................................19
Section 2.14. Computation of Interest and Fees.............................20
Section 2.15. Interest Act Equivalency.....................................20
Section 2.16. Judgment Currency............................................20
ARTICLE 3
CONDITIONS
Section 3.01. Closing......................................................21
Section 3.02. Borrowings...................................................21
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.01. Corporate Existence and Power................................22
Section 4.02. Corporate and Governmental Authorization; No Contravention...22
Section 4.03. Binding Effect...............................................22
Section 4.04. Financial Information........................................22
Section 4.05. Litigation...................................................23
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TABLE OF CONTENTS
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ARTICLE 5
COVENANTS
Section 5.01. Information..................................................23
Section 5.02. Conduct of Business and Maintenance of Existence; Merger
and Sales of Assets..........................................24
Section 5.03. Use of Proceeds..............................................25
Section 5.04. Negative Pledge..............................................25
Section 5.05. Minimum Consolidated Tangible Net Worth......................26
ARTICLE 6
DEFAULTS
Section 6.01. Events of Default............................................26
Section 6.02. Notice of Default............................................28
ARTICLE 7
THE AGENT AND THE SYNDICATION AGENT
Section 7.01. Appointment and Authorization................................28
Section 7.02. Agent and Affiliates.........................................28
Section 7.03. Action by Agent..............................................28
Section 7.04. Consultation with Experts....................................28
Section 7.05. Liability of Agent...........................................29
Section 7.06. Indemnification..............................................29
Section 7.07. Credit Decision..............................................29
Section 7.08. Successor Agent..............................................29
Section 7.09. Agent's Fee..................................................30
Section 7.10. Syndication Agent............................................30
ARTICLE 8
CHANGE IN CIRCUMSTANCES
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair.....30
Section 8.02. Illegality...................................................30
Section 8.03. Increased Cost and Reduced Return............................31
Section 8.04. Taxes........................................................32
Section 8.05. Base Rate Loans Substituted for Affected Euro-Dollar Loans...34
Section 8.06. Substitution of Bank.........................................34
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TABLE OF CONTENTS
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ARTICLE 9
MISCELLANEOUS
Section 9.01. Notices......................................................34
Section 9.02. No Waivers...................................................35
Section 9.03. Expenses; Indemnification....................................35
Section 9.04. Sharing of Set-offs..........................................35
Section 9.05. Amendments and Waivers.......................................36
Section 9.06. Successors and Assigns.......................................36
Section 9.07. Collateral...................................................37
Section 9.08. Governing Law; Submission to Jurisdiction....................37
Section 9.09. Counterparts; Integration; Effectiveness.....................37
Section 9.10. WAIVER OF JURY TRIAL.........................................39
Section 9.11. Confidentiality..............................................39
Section 9.12. Sharing of Payments..........................................39
ANNEX A -- Pricing Schedule
EXHIBIT A -- Note
EXHIBIT B -- Money Market Quote Request
EXHIBIT C -- Invitation for Money Market Quotes
EXHIBIT D -- Money Market Quote
EXHIBIT E -- Opinion of Counsel for the Company
EXHIBIT F -- Opinion of Special Counsel for the Administrative Agent
EXHIBIT G -- Assignment and Assumption Agreement
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CREDIT AGREEMENT dated as of June 14, 2001 among NORTEL NETWORKS LIMITED,
the Banks party hereto, Credit Suisse First Boston Canada, as Syndication Agent,
and The Chase Manhattan Bank of Canada, as Administrative Agent, as amended by
AMENDMENT NO. 1 TO CREDIT AGREEMENT dated as of July 31, 2001 among Nortel
Networks Limited and the banks parties thereto.
The parties hereto agree as follows:
ARTICLE 1
Definitions
SECTION 1.01. Definitions. The following terms, as used herein, have the
following meanings:
"ABSOLUTE RATE AUCTION" means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section
2.03.
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Bank,
an administrative questionnaire in the form prepared by the Agent and
submitted to the Agent (with a copy to the Company) duly completed by
such Bank.
"AFFILIATE" means, as to any Person, (i) any other Person (a
"CONTROLLING PERSON") that directly, or indirectly through one or more
intermediaries, controls such Person or (ii) any Person (other than such
Person and its Subsidiaries) which is controlled by or is under common
control with a Controlling Person. As used herein, the term "control"
means possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"AGENT" means The Chase Manhattan Bank of Canada, in its capacity
as administrative agent for the Banks hereunder, and its successors in
such capacity.
"AGREEMENT" means this Credit Agreement and any Annexes,
Appendices, Exhibits and Schedules attached hereto, each of which is
hereby incorporated in the terms of this Agreement, as amended.
"APPLICABLE LENDING OFFICE" means, with respect to any Bank, (i)
in the case of its Base Rate Loans, its Domestic Lending Office, (ii) in
the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office and
(iii) in the case of its Money Market Loans, its Money Market Lending
Office.
"ARRANGERS" means X.X. Xxxxxx Securities Inc. and Credit Suisse
First Boston, in their capacity as Joint Bookrunners and Co-Lead
Arrangers.
"ASSIGNEE" has the meaning set forth in Section 9.06(c).
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"ATTRIBUTABLE DEBT" in respect of a Financing Lease means the
present value of the obligations of the lessee thereunder for rental
payments during the remaining term of such lease.
"BANK" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.06(c), and their
respective successors.
"BASE RATE" means the annual rate of interest announced from time
to time by The Chase Manhattan Bank of Canada, as being its reference
rate then in effect for determining interest rates on commercial loans in
U.S. Dollars made in Canada by The Chase Manhattan Bank of Canada.
"BASE RATE LOAN" means a Committed Loan to be made by a Bank as a
Base Rate Loan in accordance with the applicable Notice of Committed
Borrowing or Notice of Interest Rate Election or pursuant to Article 8.
"BORROWING" has the meaning set forth in Section 1.03.
"CANADIAN DOLLARS" and the sign "C$" mean lawful money of Canada.
"CANADIAN PRIME RATE" means the annual rate of interest announced
from time to time by The Chase Manhattan Bank of Canada, as being its
reference rate then in effect for determining interest rates on
commercial loans in Canadian Dollars made in Canada by The Chase
Manhattan Bank of Canada.
"CHANGE OF CONTROL" means (x) any person or group of persons
(within the meaning of Section 13 or 14 of the Exchange Act) shall
acquire beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under the Exchange
Act) of 40% or more of the outstanding shares of common stock of the
Relevant Entity, or (y) during any period of twelve consecutive calendar
months, individuals who were directors of the Relevant Entity on the
first day of such period (or who were nominated for election or appointed
by such directors as a director of the Relevant Entity) shall cease to
constitute a majority of the Relevant Entity's board of directors. For
purposes of this definition, "RELEVANT ENTITY" means each of the Company
and Nortel Networks Corporation, a Canadian corporation (and its
successors).
"CLOSING DATE" means the date on or after the Effective Date on
which the Agent shall have received the documents specified in or
pursuant to Section 3.01.
"COMMITMENT" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof, as
such amount may be reduced from time to time pursuant to Section 2.09.
"COMMITTED LOAN" means a loan made by a Bank pursuant to Section
2.01; provided that if any such loan or loans are combined or subdivided
pursuant to a Notice of Interest Rate Election, the term "Committed Loan"
shall refer to the combined
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principal amount resulting from such combination or to each of the
separate principal amounts resulting from such subdivision, as the case
may be.
"COMPANY" means Nortel Networks Limited, a Canadian corporation,
and its successors.
"COMPANY'S 2000 FORM 10-K" means the Company's annual report on
Form 10-K for 2000, as filed with the Securities and Exchange Commission
pursuant to the Exchange Act.
"COMPANY'S 2001Q1 FORM 10-Q" means the Company's quarterly report
on Form 10-Q for the period ended March 31, 2001, as filed with the
Securities and Exchange Commission pursuant to the Exchange Act.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or
other entity the accounts of which would be consolidated with those of
the Company in its consolidated financial statements if such statements
were prepared as of such date.
"CONSOLIDATED NET TANGIBLE ASSETS" means the total amount of
assets after deducting therefrom (i) all current liabilities, and (ii)
all goodwill, tradenames, trademarks, patents, unamortized debt discount
and expense and other like intangible assets, all as shown in the most
recent annual or quarterly consolidated balance sheet of the Company
(which may be contained in the Company's then most recent annual or
quarterly report on Form 10-K or Form 10-Q, as applicable, as filed with
the Securities and Exchange Commission); assets shall include an amount
equal to the Attributable Debt in respect of those Financing Leases not
capitalized on such balance sheet.
"CONSOLIDATED TANGIBLE NET WORTH" means at any date the
consolidated stockholders' equity of the Company and its Consolidated
Subsidiaries less their consolidated Intangible Assets, all determined as
of such date. For purposes of this definition, "Intangible Assets" means
the amount (to the extent reflected in determining such consolidated
stockholders' equity) of goodwill, patents, trademarks, service marks,
tradenames, copyrights and other intangible assets.
"DEFAULT" means any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"DISCLOSURE MATERIALS" means the written materials so designated
by the Arrangers and the Company and provided to the Banks.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in Toronto are required or authorized
by law to close.
"DOMESTIC LENDING OFFICE" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending
Office) or such other office as such Bank may
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hereafter designate as its Domestic Lending Office by notice to the
Company and the Agent.
"EFFECTIVE DATE" means the date this Agreement becomes effective
in accordance with Section 9.09.
"EURO-CURRENCY BUSINESS DAY" means, where the funds are to be paid
or made available in U.S. Dollars or Canadian Dollars, any Domestic
Business Day on which commercial banks are open for international
business (including dealings in U.S. Dollar deposits or Canadian Dollar
deposits, as the case may be) in London.
"EURO-DOLLAR LENDING OFFICE" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative
Questionnaire as its Euro-Dollar Lending Office) or such other office,
branch or affiliate of such Bank as it may hereafter designate as its
Euro-Dollar Lending Office by notice to the Company and the Agent.
"EURO-DOLLAR LOAN" means a Committed Loan to be made by a Bank as
a Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing or Notice of Interest Rate Election.
"EURO-DOLLAR MARGIN" means a rate per annum determined in
accordance with the Pricing Schedule.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXECUTIVE OFFICER" means any of the Chairman of the Board of
Directors, the President and Chief Executive Officer, the Chief Financial
Officer, the Treasurer, the Assistant Treasurer or the Controller of the
Company.
"FINANCING LEASES" means sale and leaseback transactions, except
for: (i) temporary leases for a term, including any renewal thereof, of
not more than three years; (ii) leases between the Company and NNI or
between NNI and the Company; and (iii) leases for properties executed
within one year of the latest of acquisition, completion of construction
and commencement of commercial operation thereof.
"FIXED RATE LOANS" means Euro-Dollar Loans or Money Market Loans
(excluding Money Market LIBOR Loans bearing interest at the Base Rate
pursuant to Section 8.01) or both.
"FUNDED DEBT" means any indebtedness for borrowed money, whether
of the Company or of a third person.
"GROUP OF LOANS" means at any time a group of Loans consisting of
(i) all Committed Loans which are Base Rate Loans at such time or (ii)
all Committed Loans
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which are Euro-Dollar Loans having the same Interest Period at such time;
provided that if a Committed Loan of any particular Bank is converted to
or made as a Base Rate Loan pursuant to Section 8.02 or 8.05, such Loan
shall be included in the same Group or Groups of Loans from time to time
as it would have been in if it had not been so converted or made.
"INDEMNITEE" has the meaning set forth in Section 9.03(b).
"INTEREST PERIOD" means: (1) with respect to each Euro-Dollar
Loan, the period commencing on the date of borrowing specified in the
applicable Notice of Borrowing or Notice of Interest Rate Election and
ending one, two, three or six months thereafter, as the Company may elect
in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Currency Business Day shall be extended
to the next succeeding Euro-Currency Business Day unless
such Euro-Currency Business Day falls in another calendar
month, in which case such Interest Period shall end on the
next preceding Euro-Currency Business Day;
(b) any Interest Period which begins on the last Euro-Currency
Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall, subject to
clause (c) below, end on the last Euro-Currency Business
Day of a calendar month; and
(c) any Interest Period beginning prior to the Termination Date
which would otherwise end after the Termination Date shall
end on the Termination Date, and any Interest Period
beginning on or after the Termination Date which would
otherwise end after the first anniversary of the
Termination Date shall end on the first anniversary of the
Termination Date;
(2) with respect to each Money Market LIBOR Loan, the period
commencing on the date of such borrowing specified in the
applicable Notice of Borrowing and ending such whole number of
months thereafter as the Company may elect in accordance with
Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Currency Business Day shall be extended
to the next succeeding Euro-Currency Business Day unless
such Euro-Currency Business Day falls in another calendar
month, in which case such Interest Period shall end on the
next preceding Euro-Currency Business Day;
(b) any Interest Period which begins on the last Euro-Currency
Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar
month at the end of such Interest
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Period) shall, subject to clause (c) below, end on the last
Euro-Currency Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(3) with respect to each Money Market Absolute Rate Loan, the period
commencing on the date of borrowing specified in the applicable
Notice of Borrowing and ending such number of days thereafter (but
not less than 14 days) as the Company may elect in accordance with
Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Currency Business Day shall be extended
to the next succeeding Euro-Currency Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"LIBOR AUCTION" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank Offered
Rate pursuant to Section 2.03.
"LOAN" means a Base Rate Loan, a Euro-Dollar Loan or a Money
Market Loan and "Loans" means Base Rate Loans, Euro-Dollar Loans or Money
Market Loans or any combination of the foregoing.
"LONDON INTERBANK OFFERED RATE" has the meaning set forth in
Section 2.07(b).
"MATERIAL SUBSIDIARY" means any Subsidiary (x) the consolidated
revenues of which equal or exceed 10% of the revenues of the Company and
its Consolidated Subsidiaries on a consolidated basis or (y) the
consolidated assets of which equal or exceed 10% of the assets of the
Company and its Consolidated Subsidiaries on a consolidated basis, in
each case as contained in the most recent annual report on Form 10-K, as
filed with the Securities and Exchange Commission.
"MONEY MARKET ABSOLUTE RATE" has the meaning set forth in Section
2.03(d)(ii)(D).
"MONEY MARKET ABSOLUTE RATE LOAN" means a loan to be made by a
Bank pursuant to an Absolute Rate Auction.
"MONEY MARKET LENDING OFFICE" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as
it may hereafter designate as its Money Market Lending Office by notice
to the Company and the Agent; provided that any Bank may from time to
time by notice to the Company and the Agent designate separate Money
Market Lending Offices for its Money Market LIBOR Loans, on the one hand,
and its Money Market Absolute Rate Loans, on the other hand, in which
case all
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references herein to the Money Market Lending Office of such Bank shall
be deemed to refer to either or both of such offices, as the context may
require.
"MONEY MARKET LIBOR LOAN" means a loan to be made by a Bank
pursuant to a LIBOR Auction (including such a loan bearing interest at
the Base Rate or the Canadian Prime Rate, as the case may be, pursuant to
Section 8.01).
"MONEY MARKET LOAN" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
"MONEY MARKET MARGIN" has the meaning set forth in Section
2.03(d)(ii)(C).
"MONEY MARKET QUOTE" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.03.
"MORTGAGE" means and includes any mortgage, hypothec, pledge,
lien, security interest, privilege, floating charge, conditional sale or
other title retention agreement or other similar encumbrance securing
indebtedness for borrowed money.
"NOTES" means promissory notes of the Company, substantially in
the form of Exhibit A hereto, evidencing the obligation of the Company to
repay the Loans made to it, and "Note" means any one of such promissory
notes issued hereunder.
"NOTICE OF BORROWING" means a Notice of Committed Borrowing
(as defined in Section 2.02) or a Notice of Money Market Borrowing (as
defined in Section 2.03(f)).
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in
Section 2.10(a).
"NNI" means Nortel Networks Inc., a Delaware corporation, and its
successors.
"OTHER CREDIT AGREEMENT" means the Credit Agreement dated as of
June 14, 2001 among Nortel Networks Limited, as Guarantor, Nortel
Networks Inc., as Borrower, the banks parties thereto, Credit Suisse
First Boston, as Syndication Agent, and The Chase Manhattan Bank, as
Administrative Agent, as amended from time to time.
"PARENT" means, with respect to any Bank, any Person controlling
such Bank.
"PARTICIPANT" has the meaning set forth in Section 9.06(b).
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"PRICING SCHEDULE" means the pricing schedule attached hereto as
Annex A.
"PURCHASE MONEY MORTGAGE" means a mortgage on property existing at
the time of acquisition thereof by the Company or NNI; any mortgage on
any property acquired,
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constructed or improved by the Company or NNI incurred after the
Effective Date which is created or assumed contemporaneously with, or
within 180 days after, such acquisition, or completion of such
construction or improvement, to secure or provide for the payment of the
purchase price thereof or the cost of construction or improvement thereon
incurred after the Effective Date (including the cost of any underlying
real property); provided, however, that in the case of any such
acquisition, construction or improvement, the Mortgage shall not apply to
any property previously owned by the Company or NNI, other than, in the
case of any such construction or improvement, any real property,
theretofore substantially unimproved for the purposes of the Company or
NNI on which the property so constructed, or the improvement, is located
and other than any machinery or equipment installed at any time so as to
constitute immovable property or a fixture on the real property on which
the property so constructed, or the improvement, is located.
"REFERENCE BANKS" means the principal London offices of The Chase
Manhattan Bank and Credit Suisse First Boston, and "Reference Bank" means
any one of such Reference Banks.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REQUIRED BANKS" means at any time Banks having at least 51% of
the aggregate amount of the Commitments or, if the Commitments shall have
been terminated, holding Notes evidencing at least 51% of the aggregate
unpaid principal amount of the Loans.
"REQUIRED BANKS (80%)" means at any time Banks having at least 80%
of the aggregate amount of the Commitments or, in the case of Section
7.08, if the Commitments shall have been terminated, holding Notes
evidencing at least 80% of the aggregate unpaid principal amount of the
Loans.
"REVOLVING CREDIT PERIOD" means the period from and including the
Closing Date to but excluding the Termination Date.
"SUBSIDIARY" means, as to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or
indirectly owned by such Person; unless otherwise specified, "Subsidiary"
means a Subsidiary of the Company.
"SYNDICATION AGENT" means Credit Suisse First Boston Canada, in
its capacity as syndication agent.
"TERMINATION DATE" means June 13, 2002, or, if such day is not a
Euro-Currency Business Day, the next preceding Euro-Currency Business
Day.
"UNITED STATES" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
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"U.S. DOLLARS" and the sign "$" mean lawful money of the United
States.
Section 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time in the
United States, applied on a basis consistent (except for changes concurred in by
the Company's independent public accountants) with the most recent audited
consolidated financial statements of the Company and its Consolidated
Subsidiaries delivered to the Banks; provided that, if the Company notifies the
Agent that the Company wishes to amend any covenant in Article 5 to eliminate
the effect of any change in such generally accepted accounting principles on the
operation of such covenant (or if the Agent notifies the Company that the
Required Banks wish to amend Article 5 for such purpose), then the Company's
compliance with such covenant shall be determined on the basis of generally
accepted accounting principles in effect in the United States immediately before
the relevant change in generally accepted accounting principles became
effective, until either such notice is withdrawn or such covenant is amended in
a manner satisfactory to the Company and the Required Banks.
Section 1.03. Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Banks to be made to the Company pursuant to
Article 2 on a single date and in a single currency, all of which Loans are of
the same type (subject to Article 8) and, except in the case of Base Rate Loans,
have the same Interest Period or initial Interest Period. Borrowings are
classified for purposes of this Agreement either by reference to the pricing of
Loans comprising such Borrowing (e.g., a "FIXED RATE BORROWING" is a Euro-Dollar
Borrowing or a Money Market Borrowing (excluding any such Borrowing consisting
of Money Market LIBOR Loans bearing interest at the Base Rate pursuant to
Section 8.01), and a "EURO-DOLLAR BORROWING" is a Borrowing comprised of
Euro-Dollar Loans) or by reference to the provisions of Article 2 under which
participation therein is determined (i.e., a "COMMITTED BORROWING" is a
Borrowing under Section 2.01 in which all Banks participate in proportion to
their Commitments, while a "MONEY MARKET BORROWING" is a Borrowing under Section
2.03 in which the Bank participants are determined on the basis of their bids in
accordance therewith).
ARTICLE 2
The Credits
Section 2.01. Commitments to Lend. (a) Revolving Loans. During the
Revolving Credit Period, each Bank severally agrees, on the terms and conditions
set forth in this Agreement, to make loans to the Company pursuant to this
subsection (a) from time to time in amounts such that the aggregate principal
amount of Committed Loans by such Bank at any one time outstanding shall not
exceed the amount of its Commitment. Each Borrowing under this subsection (a)
shall be in an aggregate principal amount of $25,000,000 or any larger multiple
of $5,000,000 (except that any such Borrowing may be in the aggregate amount
available subject to Section 3.02(c)), and shall be made from the several Banks
ratably in proportion to their respective Commitments. Within the foregoing
limits, the Company may borrow under this subsection (a), repay or, to the
extent permitted by Section 2.11, prepay Loans and reborrow at
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any time during the Revolving Credit Period under this subsection (a). The
Commitments shall terminate at the close of business on the Termination Date.
(b) Term Loans. Each Bank severally agrees, on the terms and conditions
set forth in this Agreement, to make a loan to the Company on the Termination
Date in an amount up to the aggregate principal amount of such Bank's Loans to
the Company outstanding on the Termination Date immediately prior to giving
effect to any repayment of such Loans on the Termination Date, provided that the
principal amount of such loan shall not exceed such Bank's Commitment. Amounts
prepaid after the Termination Date pursuant to Section 2.11 shall not be
reborrowed.
Section 2.02. Notice of Committed Borrowing. The Company shall give the
Agent notice (a "NOTICE OF COMMITTED BORROWING") not later than (x) 10:45 A.M.
(Toronto time) on the date of each Base Rate Borrowing and (y) 1:00 P.M.
(Toronto time) on the third Euro-Currency Business Day before each Euro-Dollar
Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic Business
Day in the case of a Base Rate Borrowing or a Euro-Currency Business Day
in the case of a Euro-Dollar Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) whether the Loans comprising such Borrowing bear interest
initially at the Base Rate or at a Euro-Dollar Rate; and
(iv) in the case of a Euro-Dollar Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
Notwithstanding the foregoing, no more than eleven Euro-Dollar Borrowings shall
be outstanding at any one time, and any Borrowing which would exceed such
limitation shall be made as a Base Rate Borrowing.
Section 2.03. Money Market Borrowings. (a) The Money Market Option. In
addition to Committed Borrowings pursuant to Section 2.01(a), the Company may,
as set forth in this Section, request the Banks during the Revolving Credit
Period to make offers to make Money Market Loans to the Company. The Banks may,
but shall have no obligation to, make such offers and the Company may, but shall
have no obligation to, accept any such offers in the manner set forth in this
Section. The making of a Money Market Loan by a Bank shall not affect its or any
other Bank's obligation to make Committed Loans pursuant to Section 2.01.
(b) Money Market Quote Request. When the Company wishes to request offers
to make Money Market Loans under this Section, it shall transmit to the Agent by
telex or facsimile transmission a Money Market Quote Request substantially in
the form of Exhibit B hereto so as to be received not later than 10:30 A.M.
(Toronto time) on (x) the fourth Euro-Currency Business Day prior to the date of
Borrowing proposed therein, in the case of a LIBOR Auction or (y) the Domestic
Business Day next preceding the date of Borrowing proposed therein, in the case
of an Absolute Rate Auction (or, in either case, such other time or date as the
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Company and the Agent shall have mutually agreed and shall have notified to the
Banks not later than the date of the Money Market Quote Request for the first
LIBOR Auction or Absolute Rate Auction for which such change is to be effective)
specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Currency
Business Day in the case of a LIBOR Auction or a Domestic Business Day in
the case of an Absolute Rate Auction,
(ii) the currency of such Borrowing, which shall be either U.S.
Dollars or Canadian Dollars,
(iii) the aggregate amount of such Borrowing, which shall be
$25,000,000 or C$25,000,000, as the case may be, or a larger multiple of
$5,000,000 or C$5,000,000, as the case may be,
(iv) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(v) whether the Money Market Quotes requested are to set forth a
Money Market Margin or a Money Market Absolute Rate.
The Company may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within two Euro-Currency Business Days (or such other
number of days as the Company and the Agent may agree) of any other Money Market
Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon (and in any event
not later than 12:00 Noon (Toronto time) on the date of) receipt of a Money
Market Quote Request submitted in accordance with subsection (b), the Agent
shall send to the Banks by telex or facsimile transmission an Invitation for
Money Market Quotes substantially in the form of Exhibit C hereto, which shall
constitute an invitation by the Company to each Bank to submit Money Market
Quotes offering to make the Money Market Loans to which such Money Market Quote
Request relates in accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each Bank may
submit a Money Market Quote containing an offer or offers to make Money Market
Loans in response to any Invitation for Money Market Quotes. Each Money Market
Quote must comply with the requirements of this subsection (d) and must be
submitted to the Agent by telex or facsimile transmission at its offices
specified in or pursuant to Section 9.01 not later than (x) 10:00 A.M. (Toronto
time) on the third Euro-Currency Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M. (Toronto time) on the
proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Company and the Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective); provided that Money Market
Quotes submitted by the Agent (or any affiliate of the Agent) in the capacity of
a Bank may be
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submitted, and may only be submitted, if the Agent or such affiliate notifies
the Company of the terms of the offer or offers contained therein not later than
(x) one hour prior to the deadline for the other Banks, in the case of a LIBOR
Auction or (y) 15 minutes prior to the deadline for the other Banks, in the case
of an Absolute Rate Auction. Subject to Articles 3 and 6, any Money Market Quote
so made shall be irrevocable except with the written consent of the Agent given
on the instructions of the Company.
(ii) Each Money Market Quote shall be in substantially the form of
Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing and the currency of such
Borrowing,
(B) the principal amount of the Money Market Loan for which
each such offer is being made, which principal amount (w) may be
greater than or less than the Commitment (or the equivalent amount
in Canadian Dollars) of the quoting Bank, (x) must be $5,000,000
or C$5,000,000, as the case may be, or a larger multiple of
$1,000,000 or C$1,000,000, as the case may be, (y) may not exceed
the principal amount of Money Market Loans for which offers were
requested and (z) may be subject to an aggregate limitation as to
the principal amount of Money Market Loans for which offers being
made by such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or
below the applicable London Interbank Offered Rate (the "MONEY
MARKET MARGIN") offered for each such Money Market Loan, expressed
as a percentage (specified to the nearest 1/10,000th of 1%) to be
added to or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%)
(the "MONEY MARKET ABSOLUTE RATE") offered for each such Money
Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D
hereto or does not specify all of the information required by
subsection (d)(ii);
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
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(e) Notice to Company. The Agent shall promptly (x) and in any event not
later than 10:45 A.M. (Toronto time), in the case of a LIBOR Auction, or 10:00
A.M. (Toronto time), in the case of an Absolute Rate Auction, on the date of
receipt notify the Company of the terms of any Money Market Quote submitted by a
Bank that is in accordance with subsection (d) and (y) notify the Company of the
terms of any Money Market Quote that amends, modifies or is otherwise
inconsistent with a previous Money Market Quote submitted by such Bank with
respect to the same Money Market Quote Request. Any such subsequent Money Market
Quote shall be disregarded by the Agent unless such subsequent Money Market
Quote is submitted solely to correct a manifest error in such former Money
Market Quote. The Agent's notice to the Company shall specify (A) the aggregate
principal amount and currency of Money Market Loans for which offers have been
received for each Interest Period specified in the related Money Market Quote
Request, (B) the respective principal amounts and Money Market Margins or Money
Market Absolute Rates, as the case may be, so offered and (C) if applicable,
limitations on the aggregate principal amount of Money Market Loans for which
offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Company. Not later than (x) 11:30 A.M.
(Toronto time) on the third Euro-Currency Business Day prior to the proposed
date of Borrowing, in the case of a LIBOR Auction or (y) 10:45 A.M. (Toronto
time) on the proposed date of Borrowing, in the case of an Absolute Rate Auction
(or, in either case, such other time or date as the Company and the Agent shall
have mutually agreed and shall have notified to the Banks not later than the
date of the Money Market Quote Request for the first LIBOR Auction or Absolute
Rate Auction for which such change is to be effective), the Company shall notify
the Agent of its acceptance or non-acceptance of the offers so notified to it
pursuant to subsection (e). In the case of acceptance, such notice (a "NOTICE OF
MONEY MARKET BORROWING") shall specify the aggregate principal amount of offers
for each Interest Period that are accepted. The Company may accept any Money
Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing
may not exceed the applicable amount set forth in the related Money
Market Quote Request;
(ii) the principal amount of each Money Market Borrowing must be
$25,000,000 or C$25,000,000, as the case may be, or a larger multiple of
$5,000,000 or C$5,000,000, as the case may be;
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the
case may be; and
(iv) the Company may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(g) Allocation by Agent. If offers are made by two or more Banks with the
same Money Market Margins or Money Market Absolute Rates, as the case may be,
for a greater aggregate principal amount than the amount in respect of which
such offers are accepted for the related Interest Period, the principal amount
of Money Market Loans in respect of which such offers are accepted shall be
allocated by the Agent among such Banks as nearly as possible (in
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multiples of $1,000,000 or C$1,000,000, as the case may be, as the Agent may
deem appropriate) in proportion to the aggregate principal amounts of such
offers. Determinations by the Agent of the amounts of Money Market Loans shall
be conclusive in the absence of manifest error.
Section 2.04. Notice to Banks; Funding of Loans. (a) Promptly upon (and
in any event not later than (w) 12:00 Noon (Toronto time), in the case of a
LIBOR Auction, (x) 11:15 A.M. (Toronto time), in the case of an Absolute Rate
Auction, (y) 11:30 A.M. (Toronto time), in the case of a Base Rate Borrowing,
and (z) 2:30 P.M. (Toronto time), in the case of a Euro-Dollar Borrowing, in
each case on the date of) receipt of a Notice of Borrowing submitted in
accordance with the terms of this Agreement, the Agent shall promptly notify
each Bank of the contents thereof and of such Bank's share (if any) of such
Borrowing and (except as provided in Section 8.01) such Notice of Borrowing
shall not thereafter be revocable by the Company.
(b) Not later than 12:30 P.M. (Toronto time) on the date of each
Borrowing, each Bank participating therein shall (except as provided in
subsection (c) of this Section) make available its share of such Borrowing, in
funds in U.S. Dollars or Canadian Dollars, as the case may be, immediately
available in Toronto to the Agent at its address referred to in Section 9.01.
Unless the Agent determines that any applicable condition specified in Article 3
has not been satisfied, the Agent will make the funds so received not later than
12:30 P.M. (Toronto time) from the Banks available to the Company at the Agent's
aforesaid address not later than 1:30 P.M. (Toronto time) on the day of receipt.
(c) If any Bank makes a new Loan hereunder to the Company on a day on
which the Company is to repay all or any part of an outstanding Loan from such
Bank, such Bank shall apply the proceeds of its new Loan to make such repayment
and only an amount equal to the difference (if any) between the amount being
borrowed by the Company and the amount being repaid shall be made available by
such Bank to the Agent as provided in subsection (b) of this Section, or
remitted by the Company to the Agent as provided in Section 2.12, as the case
may be.
(d) Unless the Agent shall have received notice from a Bank prior to the
date of any Borrowing (or, in the case of a Base Rate Borrowing, prior to 12:00
Noon (Toronto time) on the date of such Borrowing) that such Bank will not make
available to the Agent such Bank's share of such Borrowing, the Agent may assume
that such Bank has made such share available to the Agent on the date of such
Borrowing in accordance with subsections (b) and (c) of this Section and the
Agent may, in reliance upon such assumption, make available to the Company on
such date a corresponding amount. If and to the extent that such Bank shall not
have so made such share available to the Agent, such Bank and the Company
severally agree to repay to the Agent promptly on demand (and in any event
within three Euro-Currency Business Days) such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Company until the date such amount is repaid to the Agent, at (i) in the
case of the Company, a rate per annum equal to the interest rate applicable
thereto pursuant to Section 2.07 and (ii) in the case of such Bank, the Base
Rate or the Canadian Prime Rate, as the case may be. If such Bank shall repay to
the Agent such corresponding amount, such amount so
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repaid shall constitute such Bank's Loan included in such Borrowing for purposes
of this Agreement.
Section 2.05. Notes. (a) The Loans of each Bank to the Company shall be
evidenced by a single Note of the Company payable to the order of such Bank for
the account of its Applicable Lending Office in an amount equal to the aggregate
unpaid principal amount of such Bank's Loans to the Company.
(b) Each Bank may, by notice to the Company and the Agent, request that
its Loans of a particular type to the Company be evidenced by a separate Note of
the Company in an amount equal to the aggregate unpaid principal amount of such
Loans. Each such Note shall be in substantially the form of Exhibit A hereto
with appropriate modifications to reflect the fact that it evidences solely
Loans of the relevant type. Each reference in this Agreement to the "Note" of
such Bank shall be deemed to refer to and include any or all of such Notes, as
the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(a), the
Agent shall forward such Note to such Bank. Each Bank shall record the date,
currency, amount, type and maturity of each Loan made by it to the Company and
the date and amount of each payment of principal made with respect thereto, and
may, if such Bank so elects in connection with any transfer or enforcement of
its Note, endorse on the schedule forming a part thereof appropriate notations
to evidence the foregoing information with respect to each such Loan to the
Company then outstanding; provided that the failure of any Bank to make any such
recordation or endorsement shall not affect the obligations of the Company
hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the
Company so to endorse its Note and to attach to and make a part of its Note a
continuation of any such schedule as and when required.
Section 2.06. Maturity of Loans. Each Loan included in any Borrowing made
pursuant to Section 2.01(a) shall mature, and the principal amount thereof shall
be due and payable, together with accrued interest thereon, on the Termination
Date. Each Loan included in any Borrowing made pursuant to Section 2.01(b) shall
mature, and the principal amount thereof shall be due and payable, together with
accrued interest thereon, on the first anniversary of the Termination Date. Each
Loan included in any Borrowing made pursuant to Section 2.03 shall mature, and
the principal amount thereof shall be due and payable, on the last day of the
Interest Period applicable to such Borrowing.
Section 2.07. Interest Rates. (a) Each Base Rate Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Loan is made until it becomes due, at a rate per annum equal to the Base Rate
for such day. Such interest shall be payable quarterly in arrears on the last
day of each quarter and, with respect to the principal amount of any Base Rate
Loan converted to a Euro-Dollar Loan, on the date of such conversion. Any
overdue principal of or interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the sum
of 2% plus the rate otherwise applicable to Base Rate Loans for such day.
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(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for such
day plus the London Interbank Offered Rate applicable to such Interest Period
plus, if such Euro-Dollar Loan is included in a Borrowing made pursuant to
Section 2.01(b), 0.125%. Such interest shall be payable for each Interest Period
on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof.
The "LONDON INTERBANK OFFERED RATE" applicable to any Interest
Period means the rate appearing on Page 3750 (in the case of Loans
denominated in U.S. Dollars) or Page 3745 (in the case of Loans
denominated in Canadian Dollars) of the Dow Xxxxx Market Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to
those currently provided on such page of such Service, as determined by
the Agent from time to time for purposes of providing quotations of
interest rates applicable to deposits in the currency in which such Loan
is denominated in the London interbank market) at approximately 11:00
A.M. (London time) two Euro-Currency Business Days prior to commencement
of such Interest Period, as the rate for deposits in the currency in
which such Loan is denominated with a maturity comparable to such
Interest Period. In the event that such rate is not available at such
time for any reason, the "London Interbank Offered Rate" applicable to
such Interest Period shall be the average (rounded upward, if necessary,
to the next higher 1/16 of 1%) of the respective rates per annum at which
deposits in the currency in which such Loan is denominated are offered to
each of the Reference Banks by leading banks in the London interbank
market at approximately 11:00 A.M. (London time) two Euro-Currency
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Loan of such Reference
Bank to which such Interest Period is to apply and for a period of time
comparable to such Interest Period.
(c) Any overdue principal of or interest on any Euro-Dollar Loan shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of 2% (plus, in the case of any Euro-Dollar Loan included in
any Borrowing made pursuant to Section 2.01(b), 0.125%) plus the Euro-Dollar
Margin for such day plus the higher of (i) the London Interbank Offered Rate
applicable to the Interest Period for such Loan and (ii) the average (rounded
upward, if necessary, to the next higher 1/16 of 1%) of the respective rates per
annum at which one day (or, if such amount due remains unpaid more than three
Euro-Currency Business Days, then for such other period of time not longer than
three months as the Agent may select) deposits in U.S. Dollars in an amount
approximately equal to such overdue payment due to each of the Reference Banks
are offered to such Reference Bank by leading banks in the London interbank
market for the applicable period determined as provided above (or, if the
circumstances described in clause (a) or (b) of Section 8.01 shall exist, at a
rate per annum equal to the sum of 2% plus the rate applicable to Base Rate
Loans for such day).
(d) Subject to Section 8.01, each Money Market LIBOR Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the London Interbank
Offered Rate for such Interest Period
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(determined in accordance with Section 2.07(b) as if the related Money Market
LIBOR Borrowing were a Committed Euro-Dollar Borrowing or a Committed Borrowing
in Canadian Dollars, as the case may be) plus (or minus) the Money Market Margin
quoted by the Bank making such Loan in accordance with Section 2.03. Each Money
Market Absolute Rate Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto, at a rate per annum
equal to the Money Market Absolute Rate quoted by the Bank making such Loan in
accordance with Section 2.03. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof. Any overdue
principal of or interest on any Money Market Loan shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to the sum of 2%
plus (i) if such Money Market Loan is denominated in U.S. Dollars, the Base Rate
for such day and (ii) if such Money Market Loan is denominated in Canadian
Dollars, the Canadian Prime Rate for such day.
(e) The Agent shall determine each interest rate applicable to the Loans
hereunder. The Agent shall give prompt notice to the Company and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(f) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations is available on
a timely basis, the provisions of Section 8.01 shall apply.
Section 2.08. Fees. (a) The Company shall pay to the Agent for the
account of the Banks ratably a facility fee at the Facility Fee Rate (determined
daily in accordance with, and as defined in, the Pricing Schedule). Such
facility fee shall accrue (i) from and including the Closing Date to but
excluding the date of termination of the Commitments in their entirety, on the
daily aggregate amount of the Commitments (whether used or unused) and (ii) from
and including such date of termination to but excluding the date the Loans shall
be repaid in their entirety, on the daily aggregate outstanding principal amount
of the Loans.
(b) Accrued fees under this Section shall be payable quarterly in arrears
on each March 31, June 30, September 30, December 31, commencing on September
30, 2001, and on the date of termination of the Commitments in their entirety
(and, if later, the date the Loans shall be repaid in their entirety).
Section 2.09. Optional Termination or Reduction of Commitments. During
the Revolving Credit Period, the Company may, upon at least three Domestic
Business Days' notice to the Agent, (i) terminate the Commitments at any time,
if no Loans are outstanding at such time or (ii) ratably reduce from time to
time by an aggregate amount of $25,000,000 or a larger multiple of $5,000,000,
the aggregate amount of the Commitments in excess of the aggregate outstanding
principal amount of the Loans.
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Section 2.10. Method of Electing Interest Rates. (a) The Loans included
in each Committed Borrowing shall bear interest initially at the type of rate
specified by the Company in the applicable Notice of Committed Borrowing.
Thereafter, the Company may from time to time elect to change or continue the
type of interest rate borne by each Group of Loans (subject in each case to the
provisions of Article 8) , as follows: (i) if such Loans are Base Rate Loans,
the Company may elect to convert such Loans to Euro-Dollar Loans as of any
Euro-Currency Business Day, or (ii) if such Loans are Euro-Dollar Loans, the
Company may elect to convert such Loans to Base Rate Loans or elect to continue
such Loans as Euro-Dollar Loans for an additional Interest Period, in each case
effective on the last day of the then current Interest Period applicable to such
Loans. Each such election shall be made by delivering a notice (a "NOTICE OF
INTEREST RATE ELECTION") to the Agent at least three Euro-Currency Business Days
before the conversion or continuation selected in such notice is to be
effective. A Notice of Interest Rate Election may, if it so specifies, apply to
only a portion of the aggregate principal amount of the relevant Group of Loans;
provided that (i) such portion is allocated ratably among the Loans comprising
such Group and (ii) the portion to which such Notice applies, and the remaining
portion to which it does not apply, are each $25,000,000 or C$25,000,000 or any
larger multiple of $5,000,000 or C$5,000,000, as the case may be.
(b) Each Notice of Interest Rate Election shall specify: (i) the Group of
Loans (or portion thereof) to which such notice applies; (ii) the date on which
the conversion or continuation selected in such notice is to be effective, which
shall comply with the applicable clause of subsection (a) above; (iii) if the
Loans comprising such Group are to be converted, the new type of Loans and, if
such new Loans are Euro-Dollar Loans, the duration of the initial Interest
Period applicable thereto; and (iv) if such Loans are to be continued as
Euro-Dollar Loans for an additional Interest Period, the duration of such
additional Interest Period. Each Interest Period specified in a Notice of
Interest Rate Election shall comply with the provisions of the definition of
Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the Company
pursuant to subsection (a) above, the Agent shall promptly notify each Bank of
the contents thereof and such notice shall not thereafter be revocable by the
Company. If the Company fails to deliver a timely Notice of Interest Rate
Election to the Agent for any Group of Euro-Dollar Loans, such Loans shall be
converted into Base Rate Loans on the last day of the then current Interest
Period applicable thereto.
Section 2.11. Optional Prepayments. (a) Subject in the case of any
Euro-Dollar Borrowing to Section 2.13, the Company may, upon at least one
Domestic Business Day's notice to the Agent, prepay the Group of Base Rate Loans
(or any Money Market Borrowing bearing interest at the Base Rate or the Canadian
Prime Rate, as the case may be, pursuant to Section 8.01) or upon at least three
Euro-Currency Business Days' notice to the Agent, prepay any Group of
Euro-Dollar Loans, in each case in whole at any time, or from time to time in
part in amounts aggregating $5,000,000 or C$5,000,000 or any larger multiple of
$5,000,000 or C$5,000,000, as the case may be, by paying the principal amount to
be prepaid together with accrued interest thereon to the date of prepayment.
Each such optional prepayment shall be applied to prepay ratably the Loans of
the several Banks included in such Borrowing.
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(b) Except as provided in subsection (a) above or Section 8.02, the
Company may not prepay all or any portion of the principal amount of any Money
Market Loan prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this Section, the
Agent shall promptly notify each Bank of the contents thereof and of such Bank's
ratable share (if any) of such prepayment and such notice shall not thereafter
be revocable by the Company.
Section 2.12. General Provisions as to Payments. (a) Each Borrowing shall
be repaid or prepaid in the currency in which it was made in the amount borrowed
and interest payable thereon shall be paid in such currency.
(b) The Company shall make each payment of principal of, and interest on,
the Loans and of fees hereunder, not later than 12:00 Noon (Toronto time) on the
date when due, in funds immediately available in Toronto, to the Agent at its
address referred to in Section 9.01. The Agent will promptly distribute to each
Bank its ratable share of each such payment received by the Agent for the
account of the Banks. Whenever any payment of principal of, or interest on, the
Base Rate Loans or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Currency Business Day, the date for payment thereof shall be extended to
the next succeeding Euro-Currency Business Day unless such Euro-Currency
Business Day falls in another calendar month, in which case the date for payment
thereof shall be the next preceding Euro-Currency Business Day. Whenever any
payment of principal of, or interest on, the Money Market Loans shall be due on
a day which is not a Euro-Currency Business Day, the date for payment thereof
shall be extended to the next succeeding Euro-Currency Business Day. If the date
for any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
(c) Unless the Agent shall have received notice from the Company prior to
the date on which any payment is due from the Company to the Banks hereunder
that the Company will not make such payment in full, the Agent may assume that
the Company has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank. If and
to the extent that the Company shall not have so made such payment, each Bank
shall repay to the Agent forthwith on demand such amount distributed to such
Bank together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Base Rate or the Canadian Prime Rate, as the case may be.
Section 2.13. Funding Losses. If the Company makes any payment of
principal with respect to any Fixed Rate Loan (pursuant to Article 2, 6 or 8
(other than Section 8.02) or otherwise) on any day other than the last day of
the Interest Period applicable thereto, or the last day of an applicable period
fixed pursuant to Section 2.07(c), or if the Company fails to borrow or prepay
any Fixed Rate Loans after notice has been given to any Bank in accordance with
Section 2.04(a) or 2.11(a) (except as a result of (x) a default by the Agent or
any Bank in
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observing the terms of this Agreement or (y) an election not to borrow pursuant
to Section 8.01), the Company shall reimburse each Bank within 15 days after
demand for any resulting loss or expense directly incurred by it, including
(without limitation) any loss incurred in obtaining, liquidating or employing
deposits from third parties, but excluding consequential damages and loss of
margin for the period after any such payment or failure to borrow or prepay,
provided that such Bank (x) shall have delivered to the Company a certificate as
to the amount of such loss or expense, and (y) shall use all reasonable efforts
to mitigate the amount payable by the Company under this Section 2.13.
Section 2.14. Computation of Interest and Fees. Interest based on the
Canadian Prime Rate hereunder shall be computed on the basis of a year of 365
days (or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
Section 2.15. Interest Act Equivalency. For purposes of disclosure
pursuant to the Interest Act (Canada), the yearly rate of interest to which any
rate of interest other than the Canadian Prime Rate is equivalent, may be
determined by multiplying the applicable rate by a fraction, the numerator of
which is the number of days in the calendar year in which the period for which
such interest payable occurs and the denominator of which is 360.
Section 2.16. Judgment Currency. If for the purpose of obtaining judgment
in any court it is necessary to convert a sum due from the Company hereunder or
under any of the Notes in the currency expressed to be payable herein or under
the Notes (the "SPECIFIED CURRENCY") into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Agent could purchase the specified currency with such other
currency at the Agent's Toronto office on the Domestic Business Day preceding
that on which final judgment is given. The obligations of the Company in respect
of any sum due to any Bank or the Agent hereunder or under any Note shall,
notwithstanding any judgment in a currency other than the specified currency, be
discharged only to the extent that on the Domestic Business Day following
receipt by such Bank or the Agent (as the case may be) of any sum adjudged to be
so due in such other currency such Bank or the Agent (as the case may be) may in
accordance with normal banking procedures purchase the specified currency with
such other currency; if the amount of the specified currency so purchased is
less than the sum originally due to such Bank or the Agent, as the case may be,
in the specified currency, the Company agrees, to the fullest extent that it may
effectively do so, as a separate obligation and notwithstanding any such
judgment, to indemnify such Bank or the Agent, as the case may be, against such
loss, and if the amount of the specified currency so purchased exceeds (a) the
sum originally due to any Bank or the Agent, as the case may be, in the
specified currency and (b) any amounts shared with other Banks as a result of
allocations of such excess as a disproportionate payment to such Bank under
Section 9.04, such Bank or the Agent, as the case may be, agrees to remit such
excess to the Company.
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ARTICLE 3
Conditions
Section 3.01. Closing. The closing hereunder shall occur upon receipt by
the Agent of the following documents, each dated the Closing Date unless
otherwise indicated:
(a) a duly executed Note of the Company for the account of each Bank
dated on or before the Closing Date complying with the provisions of Section
2.05;
(b) an opinion of Xxxxxxx X. Xxxxx, Corporate Secretary of the Company,
substantially in the form of Exhibit E hereto;
(c) an opinion of Xxxxx Xxxx & Xxxxxxxx, special counsel for the Agent,
substantially in the form of Exhibit F hereto;
(d) a certificate, signed by the Chief Financial Officer or the
Controller of the Company, in form and substance satisfactory to the Agent
stating that since March 31, 2001, except as set forth in the Disclosure
Materials, there has been no material adverse change in the business, financial
position, results of operations or prospects of the Company and its Consolidated
Subsidiaries, considered as a whole; and
(e) all documents the Agent may reasonably request relating to the
existence of the Company, the corporate authority for and the validity of this
Agreement and the Notes, and any other matters relevant hereto, all in form and
substance satisfactory to the Agent.
The Agent shall promptly notify the Company and the Banks of the Closing Date,
and such notice shall be conclusive and binding on all parties hereto.
Section 3.02. Borrowings. The obligation of any Bank to make a Loan on
the occasion of any Borrowing is subject to the satisfaction of the following
conditions:
(a) the fact that the Closing Date shall have occurred on or prior to
June 14, 2001;
(b) receipt by the Agent of a Notice of Borrowing as required by Section
2.02 or 2.03, as the case may be;
(c) the fact that, immediately after such Borrowing, the aggregate
outstanding principal amount of the Committed Loans will not exceed the
aggregate amount of the Commitments and the ratio of such Loans to such
Commitments shall be the same as the ratio of the aggregate outstanding
principal amount of the committed loans under the Other Credit Agreement to the
aggregate amount of the commitments under the Other Credit Agreement;
(d) the fact that, immediately before and after such Borrowing, no
Default shall have occurred and be continuing;
(e) the fact that the representations and warranties of the Company
contained in this Agreement shall be true on and as of the date of such
Borrowing; and
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(f) in the case of any Borrowing which would violate any limitation
imposed by the board of directors of the Company in effect on the date hereof on
the principal amount of any financing or the outstanding principal amount of any
financings of the Company, receipt by the Agent of a copy, certified by an
appropriate officer of the Company, of the resolutions of the board of directors
of the Company pursuant to which such Borrowing is authorized.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Company on the date of such Borrowing as to the facts specified in clauses
(c), (d) and (e) of this Section.
ARTICLE 4
Representations and Warranties
The Company represents and warrants that:
Section 4.01. Corporate Existence and Power. The Company is a corporation
duly incorporated and validly existing under the laws of the jurisdiction of its
incorporation, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted, the absence of which would have a material adverse effect on the
ability of the Company to perform its obligations under this Agreement.
Section 4.02. Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by the Company of this Agreement and its
Notes (i) are within the Company's corporate powers and have been duly
authorized by all necessary corporate action, (ii) require no action by or in
respect of, or filing with, any governmental body, agency or official and (iii)
do not contravene any provision of applicable law or regulation or any provision
of the certificate of incorporation or by-laws of the Company or any contractual
restriction, order, decree or other instrument binding upon the Company or any
of its Subsidiaries, except, in the case of clauses (ii) and (iii) above, any
such action, filing or contravention which would not have a material adverse
effect on the ability of the Company to perform its obligations under this
Agreement.
Section 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Company and each Note, when executed and delivered in
accordance with this Agreement, will constitute a valid and binding obligation
of the Company, in each case enforceable in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally, by general principles of equity (it being
understood that the enforceability thereof in Canada may be limited by the
Currency Act (Canada), which precludes Canadian courts from awarding a judgment
for an amount expressed in a currency other than Canadian Dollars and to the
extent that any requirement to pay interest at a greater rate after than before
default may not be enforceable in Canada if the same is construed by a Canadian
court to constitute a penalty).
Section 4.04. Financial Information. Except as set forth in the
Disclosure Materials, the (i) consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of December 31, 2000 and the related consolidated
statements of operations, cash flows and retained earnings for the fiscal year
then ended, reported on by Deloitte & Touche LLP and set
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forth in the Company's 2000 Form 10-K, and (ii) the unaudited consolidated
balance sheet of the Company and its Consolidated Subsidiaries as of March 31,
2001 and the related consolidated statements of operations, cash flows, and
retained earnings for the quarter then ended, and set forth in the Company's
2001Q1 Form 10-Q, fairly present, in conformity with United States generally
accepted accounting principles, the consolidated financial position of the
Company and its Consolidated Subsidiaries as of such date and their consolidated
results of operations and cash flows for such fiscal year or such portion of
such fiscal year, as applicable, subject, in the case of the statements as of
and for the period ended March 31, 2001, to normal year-end adjustments.
Section 4.05. Litigation. There is no action, suit or proceeding pending
against, or to the knowledge of the Company threatened against or affecting, the
Company or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable possibility
of an adverse decision which could have a material adverse effect on the ability
of the Company to perform its obligations under this Agreement, except as
disclosed in the Company's Exchange Act reports filed on or before June 13, 2001
or as set forth in the Disclosure Materials, or which in any manner draws into
question the validity of this Agreement or the Notes.
ARTICLE 5
Covenants
The Company agrees that, so long as any Bank has any Commitment hereunder
or any amount payable under any Note remains unpaid:
Section 5.01. Information. The Company will deliver to each of the Banks:
(a) as soon as available and in any event within 120 days after the end
of each fiscal year of the Company, the Company's annual report on Form 10-K as
filed with the Securities and Exchange Commission, including a consolidated
balance sheet of the Company and its Consolidated Subsidiaries as of the end of
such fiscal year and the related consolidated statements of operations, cash
flows and retained earnings for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on in a
manner acceptable to the Securities and Exchange Commission by Deloitte & Touche
LLP or other independent public accountants of nationally recognized standing;
(b) as soon as available and in any event within 60 days after the end of
each of the first three quarters of each fiscal year of the Company, the
Company's quarterly report on Form 10-Q as filed with the Securities and
Exchange Commission, including a consolidated balance sheet of the Company and
its Consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of operations, cash flows and retained earnings for such
quarter and for the portion of the Company's fiscal year ended at the end of
such quarter, setting forth in the case of such statements of operations, cash
flows and retained earnings, in comparative form the figures for the
corresponding quarter and the corresponding portion of the Company's previous
fiscal year;
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(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a copy of a certificate of the
Treasurer or Assistant Treasurer of the Company (with the original of such
certificate delivered to the Agent) stating whether to the best of such Person's
knowledge, after having conducted a reasonable investigation, any Default exists
on the date of such certificate and, if any Default then exists, setting forth
reasonable details thereof;
(d) within five days after any Executive Officer of the Company obtains
knowledge of any Default, if such Default is then continuing, notice of such
Default;
(e) promptly after the mailing thereof to the shareholders of the Company
generally, copies of all other reports and proxy statements so mailed;
(f) promptly after the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Form 8-K (or its equivalent) which
the Company shall have filed with the Securities and Exchange Commission; and
(g) from time to time such additional information regarding the financial
position or business of the Company and its Subsidiaries as any Bank may
reasonably request through the Agent as being desirable to enable such Bank to
protect its rights under this Agreement; provided that the Company shall not be
under any obligation to supply any information the supply of which would be
contrary to any confidentiality obligation binding on the Company or any of its
Subsidiaries or which, in the Company's opinion, is unpublished price sensitive
information or the supply of which would, in the Company's opinion, be contrary
to any applicable securities laws or the regulations of any relevant stock
exchange.
Section 5.02. Conduct of Business and Maintenance of Existence; Merger
and Sales of Assets. (a) The Company will continue, and will cause each Material
Subsidiary to continue, to engage in business of the same general type as now
conducted by the Company and its Material Subsidiaries, and will preserve, renew
and keep in full force and effect, and will cause each Material Subsidiary to
preserve, renew and keep in full force and effect, their respective corporate
existence and their respective rights, privileges and franchises necessary or
desirable in the normal conduct of business; provided that nothing in this
subsection (a) shall prohibit (i) the amalgamation, merger or consolidation of a
Material Subsidiary with or into the Company or the amalgamation, merger or
consolidation of a Material Subsidiary with or into another Person if the
corporation surviving such amalgamation, merger or consolidation is a Material
Subsidiary and if, in each case, after giving effect thereto, no Default shall
have occurred and be continuing, or (ii) the termination of the corporate
existence of any Material Subsidiary, or any change in, or termination of, the
business of any Material Subsidiary, or any disposition of the Company's
interest in any Material Subsidiary in whole or in part (including by way of
amalgamation, merger or consolidation), if the Company in good faith determines
that such termination, change or disposition is in the best interest of the
Company and would not materially and adversely affect the ability of the Company
to perform its obligations under this Agreement. It is understood that any
termination of the business of a Material Subsidiary, or any change in, or
termination of, the business of any Material Subsidiary or the Company, or any
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disposition of the Company's interest in any Material Subsidiary in whole or in
part (including by way of amalgamation, change or disposition) that was under
consideration on the Closing Date and the possibility of which was disclosed in
the Disclosure Materials shall be deemed to be in the best interest of the
Company.
(b) The Company will not (i) amalgamate, consolidate or merge with or
into any other Person or (ii) sell, lease or otherwise transfer, directly or
indirectly, all or substantially all of the assets of the Company and its
Subsidiaries, taken as a whole, to any other Person, unless:
(x) the corporation formed by such amalgamation or consolidation
or into which the Company is merged (in each case, if other than the
Company) or the Person that acquires substantially all of the assets of
the Company is a corporation organized under the laws of Canada or the
United States that expressly assumes, by an unconditional written
instrument executed and delivered to the Agent and the Banks, the due and
punctual performance of all of the Company's obligations hereunder; and
(y) after giving effect to such amalgamation, consolidation,
merger, sale, lease or other transfer and to the assumption referred to
in clause (x) above, if applicable, no Default has occurred and is
continuing.
Section 5.03. Use of Proceeds. The proceeds of the Loans made under this
Agreement will be used by the Company for general corporate purposes. None of
such proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any "margin stock"
within the meaning of Regulation U.
Section 5.04. Negative Pledge. (a) Subject to the following exceptions,
the Company will not, and will not permit NNI, to issue, assume or guarantee any
Funded Debt secured by, and will not secure any Funded Debt by, a Mortgage upon
any property of the Company or NNI (whether now owned or hereafter acquired)
without in any such case effectively providing concurrently therewith that the
Loans shall be secured equally and ratably with such Funded Debt; provided,
however, that the foregoing restrictions shall not apply to Funded Debt secured
by:
(i) Purchase Money Mortgages;
(ii) Mortgages on property of a corporation existing at the time
such corporation is liquidated or merged into, or amalgamated or
consolidated with, the Company or NNI or at the time of a sale, lease or
other disposition to the Company or NNI of the properties of a
corporation as, or substantially as, an entirety;
(iii) Mortgages to secure indebtedness of NNI to the Company or to
secure indebtedness of the Company to NNI;
(iv) Mortgages in favor of the United States, Canada or any
Province thereof, or any department, agency or instrumentality or
political subdivision thereof, or in favor of any other country or
political subdivision, to secure partial, progress, advance or other
payments pursuant to any contract or statute or to secure any
indebtedness incurred or
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guaranteed for the purpose of financing or refinancing all or any part of
the purchase price of the property, shares of capital stock or
indebtedness subject to such Mortgages, or the cost of constructing or
improving the property subject to such Mortgages (including, without
limitation, Mortgages incurred in connection with pollution control,
industrial revenue or similar financings); and
(v) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any Mortgage
existing at the Effective Date or any Mortgage referred to in the
foregoing clauses (i) through (iv), inclusive, provided, however, that
the principal amount of the Funded Debt secured thereby shall not exceed
the principal amount of the Funded Debt so secured at the time of such
extension, renewal or replacement, and that such extension, renewal or
replacement shall be limited to all or part of the property (plus
improvements and construction on such property) or indebtedness that was
subject to the Mortgage so extended, renewed or replaced.
(b) Notwithstanding the foregoing, the Company or NNI may issue, assume
or guarantee Funded Debt secured by, or secure Funded Debt by, a Mortgage upon
any property of the Company or NNI that would otherwise be subject to the
foregoing restrictions, provided the aggregate amount of all such Funded Debt
would not, after giving effect thereto, exceed $100,000,000.
(c) The Company will not, and will not permit NNI to, enter into any
Financing Leases covering any property of NNI or the Company unless: (1)
immediately thereafter the sum of (i) the Attributable Debt in respect of all
Financing Leases entered into on or after the Effective Date and (ii) the
aggregate amount of all Funded Debt secured by a Mortgage (exclusive of any
secured Funded Debt permitted by clauses (i) through (v) of subsection (a) of
this Section 5.04) does not exceed 15% of the Company's Consolidated Net
Tangible Assets; (2) the Company or NNI would (at the time of entering into such
arrangement) be entitled, pursuant to clauses (i) to (v) of subsection (a) of
this Section 5.04, without equally and ratably securing the Loans, to issue,
assume or guarantee indebtedness secured by a Mortgage on such property; or (3)
the Company or NNI shall apply, within 360 days of the effective date of any
such arrangement, an amount equal to the Attributable Debt in respect of such
Financing Leases to the prepayment or retirement of indebtedness incurred or
assumed by the Company or NNI (other than indebtedness owned by the Company or
NNI) which by its terms matures at or is extendible or renewable at the option
of the obligor to a date more than 12 months after the date of the creation of
such indebtedness.
Section 5.05. Minimum Consolidated Tangible Net Worth. Consolidated
Tangible Net Worth will at no time be less than $3,500,000,000.
ARTICLE 6
Defaults
Section 6.01. Events of Default. If one or more of the following events
("EVENTS OF DEFAULT") shall have occurred and be continuing:
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(a) the Company shall fail to pay when due any principal of any Loan or
shall fail to pay any interest, any fees or any other amount payable hereunder
within five days of the due date thereof;
(b) the Company shall fail to observe or perform any covenant contained
in Sections 5.02(b), 5.04 or 5.05;
(c) the Company shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a) or
(b) above) and does not remedy the failure on or before thirty days after notice
thereof has been given to the Company by the Agent at the request of any Bank;
(d) any representation or warranty made (or, pursuant to Section 3.02,
deemed made) by the Company in this Agreement or in any certificate delivered
pursuant to this Agreement shall prove to have been incorrect in any material
respect when made (or deemed made);
(e) an event of default as defined in any evidence of indebtedness for
borrowed money of the Company exceeding on its face $100,000,000 in principal
amount (whether such indebtedness now exists or shall hereafter be created)
shall have occurred, which results in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise become
due and payable and such acceleration shall not be rescinded or annulled within
10 days of written notice of such acceleration; or
(f) the Company or any Material Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(g) an involuntary case or other proceeding shall be commenced against
the Company or any Material Subsidiary seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Company or any Material Subsidiary under the
bankruptcy or insolvency laws as now or hereafter in effect in Canada or the
United States;
(h) judgments or orders for the payment of money in excess of
$300,000,000 shall be rendered against the Company or any Subsidiary and such
judgments or orders shall continue unsatisfied and unstayed for a period of 30
days, if, after such 30-day period, such
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continuation has a material adverse impact on the ability of the Company to
perform its obligations under this Agreement; or
(i) a Change of Control shall occur;
then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Company
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding more than 50% of the aggregate principal amount of
the Loans, by notice to the Company declare the Loans (together with accrued
interest thereon) to be, and the Loans shall thereupon become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Company; provided that in the case of any
of the Events of Default specified in clause 6.01(f) or 6.01(g) above with
respect to the Company, without any notice to the Company or any other act by
the Agent or the Banks, the Commitments shall thereupon terminate and the Loans
(together with accrued interest thereon) shall become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Company.
Section 6.02. Notice of Default. The Agent shall give notice to the
Company under Section 6.01(c) promptly upon being requested to do so by any Bank
and shall thereupon notify all the Banks thereof.
ARTICLE 7
The Agent and the Syndication Agent
Section 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the Notes as are delegated to
the Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto.
Section 7.02. Agent and Affiliates. The Chase Manhattan Bank of Canada
shall have the same rights and powers under this Agreement as any other Bank and
may exercise or refrain from exercising the same as though it were not the
Agent, and The Chase Manhattan Bank of Canada and its affiliates may accept
deposits from, lend money to, and generally engage in any kind of business with
the Company or any Subsidiary or Affiliate of the Company as if it were not the
Agent.
Section 7.03. Action by Agent. The obligations of the Agent hereunder are
only those expressly set forth herein. Without limiting the generality of the
foregoing, the Agent shall not be required to take any action with respect to
any Default, except as expressly provided in Article 6.
Section 7.04. Consultation with Experts. The Agent may consult with legal
counsel (who may be counsel for the Company), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
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Section 7.05. Liability of Agent. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks or (ii) in the
absence of its own gross negligence or willful misconduct. Neither the Agent nor
any of its affiliates nor any of their respective directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into
or verify (i) any statement, warranty or representation made in connection with
this Agreement or any borrowing hereunder; (ii) the performance or observance of
any of the covenants or agreements of the Company; (iii) the satisfaction of any
condition specified in Article 3, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness or genuineness of
this Agreement, the Notes or any other instrument or writing furnished in
connection herewith. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex, facsimile transmission or similar writing)
believed by it to be genuine or to be signed by the proper party or parties.
Section 7.06. Indemnification. Each Bank shall, ratably in accordance
with its Commitment, indemnify the Agent, its affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Company) against any cost, expense (including counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from such
indemnitees' gross negligence or willful misconduct) that such indemnitees may
suffer or incur in connection with this Agreement or any action taken or omitted
by such indemnitees hereunder.
Section 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
Section 7.08. Successor Agent. The Agent may resign at any time by giving
notice thereof to the Banks and the Company. Upon any such resignation, the
Required Banks (80%) shall have the right to appoint a successor Agent
reasonably acceptable to the Company. If no successor Agent shall have been so
appointed by the Required Banks (80%), and shall have accepted such appointment,
within 30 days after the retiring Agent gives notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent reasonably
acceptable to the Company, which shall be a Canadian chartered bank or
authorized foreign bank to which the restrictions and requirements set forth in
Section 524(2) of the Bank Act (Canada) do not apply, having a combined capital
and surplus of at least $200,000,000. Upon the acceptance of its appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.
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Section 7.09. Agent's Fee. The Company shall pay to the Agent for its own
account fees in the amounts and at the times previously agreed upon in writing
between the Company and the Agent.
Section 7.10. Syndication Agent. The Syndication Agent shall have no
responsibility or obligation under this Agreement in its capacity as Syndication
Agent.
ARTICLE 8
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period for any Euro-Dollar Loan
or Money Market LIBOR Loan:
(a) the Agent is advised by the Reference Banks that deposits in the
applicable currency (in the applicable amounts) are not being offered to the
Reference Banks in the London interbank market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks having 50% or more of the
aggregate amount of the Commitments advise the Agent that the London Interbank
Offered Rate as determined by the Agent will not adequately and fairly reflect
the cost to such Banks of funding their Euro-Dollar Loans for such Interest
Period, the Agent shall forthwith give notice thereof to the Company and the
Banks, whereupon until the Agent notifies the Company that the circumstances
giving rise to such suspension no longer exist, (i) the obligations of the Banks
to make Euro-Dollar Loans or to convert outstanding Loans into Euro-Dollar Loans
shall be suspended and (ii) each outstanding Euro-Dollar Loan shall be converted
into a Base Rate Loan on the last day of the then current Interest Period
applicable thereto. Unless the Company notifies the Agent by telephone
(confirmed in writing) before the date of any Fixed Rate Borrowing for which a
Notice of Borrowing has previously been given that it elects not to borrow on
such date, thereby revoking such Notice of Borrowing, (x) if such Fixed Rate
Borrowing is a Committed Borrowing, such Borrowing shall instead be made as a
Base Rate Borrowing, (y) if such Fixed Rate Borrowing is a Money Market LIBOR
Borrowing in U.S. Dollars, the Money Market LIBOR Loans comprising such
Borrowing shall bear interest for each day from and including the first day to
but excluding the last day of the Interest Period applicable thereto at the Base
Rate for such day and (z) if such Fixed Rate Borrowing is a Money Market LIBOR
Borrowing in Canadian Dollars, the Money Market Loans comprising such Borrowing
shall bear interest for each day from and including the first day to but
excluding the last day of the Interest Period applicable thereto at the Canadian
Prime Rate for such day.
Section 8.02. Illegality. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law, but if not having the force of law, the
compliance with which is in accordance with the general practice of Persons to
whom such request or directive is
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36
addressed) of any such authority, central bank or comparable agency shall make
it unlawful or impossible for any Bank (or its Euro-Dollar Lending Office) to
make, maintain or fund its Euro-Dollar Loans to the Company and such Bank shall
so notify the Agent, the Agent shall forthwith give notice thereof to the other
Banks and the Company, whereupon until such Bank notifies the Company and the
Agent that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans to the Company, or to convert
outstanding Loans into Euro-Dollar Loans, shall be suspended. Before giving any
notice to the Agent pursuant to this Section, such Bank shall designate a
different Euro-Dollar Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Bank, be otherwise
materially disadvantageous to such Bank. If such notice is given, each
Euro-Dollar Loan of such Bank then outstanding shall be converted to a Base Rate
Loan either (a) on the last day of the then current Interest Period applicable
to such Euro-Dollar Loan if such Bank may lawfully continue to maintain and fund
such Loan to such day or (b) immediately if such Bank shall determine that it
may not lawfully continue to maintain and fund such Loan to such day.
Section 8.03. Increased Cost and Reduced Return. (a) If on or after (x)
the date hereof, in the case of any Committed Loan or any obligation to make
Committed Loans or (y) the date of the related Money Market Quote, in the case
of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law,
but if not having the force of law, the compliance with which is in accordance
with the general practice of Persons to whom such request or directive is
addressed) of any such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve, special deposit, insurance
assessment or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Bank (or its Applicable Lending Office)
or shall impose on any Bank (or its Applicable Lending Office) or the London
interbank market any other condition affecting its Fixed Rate Loans, its Note or
its obligation to make Fixed Rate Loans and the result of any of the foregoing
is to increase the cost to such Bank (or its Applicable Lending Office) of
making or maintaining any Fixed Rate Loan, or to reduce the amount of any sum
received or receivable by such Bank (or its Applicable Lending Office) under
this Agreement or under its Note with respect thereto, by an amount deemed by
such Bank to be material, then, within 15 days after demand by such Bank (with a
copy to the Agent), the Company shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in any such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law, but if not having the force of law, the compliance with
which is in accordance with the general practices of Persons to whom such
request or directive is addressed) of any such authority, central bank or
comparable agency (including any determination by any
31
37
such authority, central bank or comparable agency that, for purposes of capital
adequacy requirements, the Commitments hereunder do not constitute commitments
with an original maturity of one year or less), has or would have the effect of
reducing the rate of return on capital of such Bank (or its Parent) as a
consequence of such Bank's obligations hereunder to a level below that which
such Bank (or its Parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within 15 days after demand by such Bank (with a copy to the
Agent), the Company shall pay to such Bank such additional amount or amounts as
will compensate such Bank (or its Parent) for such reduction.
(c) Each Bank will promptly notify the Company and the Agent of any event
of which it has knowledge, occurring after the date hereof, which will entitle
such Bank to compensation pursuant to this Section and will designate a
different Applicable Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the judgment of such
Bank, be otherwise materially disadvantageous to such Bank. Any Bank claiming
compensation under this Section shall deliver to the Company, as a condition to
the payment of such compensation, a certificate of an officer of such Bank
setting forth the additional amount or amounts to be paid to it hereunder, which
certificate (x) shall contain reasonable details as to the calculation of such
amount or amounts, provided that such Bank shall not be required to disclose any
information it considers to be confidential, and (y) shall confirm that such
amount or amounts (A) have been calculated on the same basis as the amounts then
being charged by such Bank to its other similarly situated borrowers for the
periods to be covered thereby, (B) are necessary to compensate such Bank for
such additional cost or reduction in return and (C) are compensation for periods
commencing no more than 180 days before the date on which such certificate was
delivered to the Company, plus any period of retroactivity applicable to the
relevant adoption or change. In determining such amount or amounts, such Bank
may use any reasonable averaging and attribution methods. If any element of any
such calculation subsequently changes, so as to change materially such amount or
amounts, such Bank will submit a revised certificate promptly to the Company.
Section 8.04. Taxes. (a) For the purposes of this Section 8.04, the
following terms have the following meanings:
"TAXES" means any and all present or future withholding taxes or
similar duties, levies, imposts, deductions or charges with respect to
any payment by the Company pursuant to this Agreement or under any Note,
and all liabilities with respect thereto, excluding (i) in the case of
each Bank and the Agent, taxes imposed on its income, and franchise or
similar taxes imposed on it, by a jurisdiction under the laws of which
such Bank or the Agent (as the case may be) is organized or in which its
principal executive office is located or, in the case of each Bank, in
which its Applicable Lending Office is located and (ii) in the case of
each Bank and the Agent, any Canadian tax imposed on such payments but
only to the extent that such Bank (or with respect to payments to it for
its own account pursuant to Section 7.09, the Agent) is subject to such
Canadian tax at the time such Bank or the Agent (as the case may be)
first becomes a party to this Agreement.
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"OTHER TAXES" means any present or future Canadian stamp or
documentary taxes and any other Canadian excise or property taxes, or
similar Canadian charges or levies, which arise from any payment made
pursuant to this Agreement or under any Note or from the execution or
delivery of, or otherwise with respect to, this Agreement or any Note.
(b) Any and all payments by the Company to or for the account of any Bank
or the Agent hereunder or under any Note shall be made without deduction for any
Taxes or Other Taxes; provided that, if the Company shall be required by law to
deduct any Taxes or Other Taxes from any such payments, (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
such Bank or the Agent (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) the Company shall
make such deductions, (iii) the Company shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
law and (iv) the Company shall furnish to such Bank or the Agent (as the case
may be), at its address referred to in Section 9.01, the original or a certified
copy of a receipt evidencing payment thereof.
(c) The Company agrees to indemnify each Bank and the Agent for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed or asserted on amounts payable under this Section) paid by
such Bank or the Agent (as the case may be) and any liability (including
penalties, interest and expenses arising from the failure of the Company to pay
such Taxes or Other Taxes when due) arising therefrom or with respect thereto,
in each case upon receipt by the Company of documentation reasonably
satisfactory to it concerning the existence and amount of such Taxes, Other
Taxes or liability. This indemnification shall be paid within 15 days after such
Bank or the Agent (as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside Canada,
on or prior to the date of its execution and delivery of this Agreement in the
case of each such Bank listed on the signature pages hereof and on or prior to
the date on which it becomes a Bank in the case of each other such Bank, and
from time to time thereafter if requested in writing by the Company (but only so
long as such Bank remains lawfully able to do so), shall provide the Company and
the Agent with a certificate of an officer of such Bank stating that such Bank
is entitled to benefits under an income tax treaty to which Canada is a party
which exempts the Bank from Canadian withholding tax or reduces the rate of
withholding tax on payments of interest for the account of such Bank or
certifying that the income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in Canada. If the Agent is
organized under the laws of jurisdiction outside Canada, it shall likewise
provide such a letter with respect to payments of fees for its own account
pursuant to Section 7.09.
(e) For any period with respect to which a Bank or the Agent has failed
to provide the Company with the appropriate certificate pursuant to Section
8.04(d) (unless such failure is due to change in treaty, law or regulation
occurring subsequent to the date on which such certificate originally was
required to be provided), such Bank (or with respect to payments to it for its
own account pursuant to Section 7.09, the Agent) shall not be entitled to
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39
indemnification under Section 8.04(b) or (c) with respect to Taxes imposed by
Canada; provided that if a Bank or the Agent, which is otherwise exempt from or
subject to a reduced rate of withholding tax, becomes subject to Taxes because
of its failure to deliver a certificate required hereunder, the Company shall
take such steps as such Bank or the Agent shall reasonably request to assist
such Bank or the Agent to recover such Taxes.
(f) If the Company is required to pay additional amounts to or for the
account of any Bank pursuant to this Section, then such Bank will change the
jurisdiction of its Applicable Lending Office if, in the judgment of such Bank,
such change (i) will eliminate or reduce any such additional payment which may
thereafter accrue and (ii) is not otherwise disadvantageous to such Bank.
Section 8.05. Base Rate Loans Substituted for Affected Euro-Dollar Loans.
If (i) the obligation of any Bank to make Euro-Dollar Loans to the Company has
been suspended pursuant to Section 8.02 or (ii) any Bank has demanded
compensation under Section 8.03 or 8.04 with respect to its Euro-Dollar Loans
and the Company shall, by at least five Euro-Currency Business Days' prior
notice to such Bank through the Agent, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such Bank notifies the
Company that the circumstances giving rise to such suspension or demand for
compensation no longer exist:
(a) all Loans to the Company which would otherwise be made by such Bank
as (or continued as or converted into) Euro-Dollar Loans shall instead be Base
Rate Loans (on which interest and principal shall be payable contemporaneously
with the related Euro-Dollar Loans of the other Banks); and
(b) after each of its Euro-Dollar Loans to the Company has been repaid
(or converted to a Base Rate Loan), all payments of principal which would
otherwise be applied to repay such Euro-Dollar Loans shall be applied to repay
its Base Rate Loans instead.
Section 8.06. Substitution of Bank. If (i) the obligation of any Bank to
make Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any
Bank has demanded compensation under Section 8.03 or 8.04, the Company shall
have the right, with the assistance of the Agent, to seek a mutually
satisfactory substitute bank or banks (which may be one or more of the Banks) to
purchase the Note and assume the Commitment of such Bank, which agrees in such
event to sell its Note and transfer its Commitment.
ARTICLE 9
Miscellaneous
Section 9.01. Notices. Except as otherwise expressly provided herein, all
notices, requests and other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission or similar writing
and, with respect to the reports and other information referred to in the next
sentence, by e-mail or other electronic means) and shall be given to such party:
(a) in the case of the Company or the Agent, at its address, facsimile number or
telex number set forth on the signature pages hereof, (b) in the case of any
Bank, at its address, facsimile number, telex number or e-mail address set forth
in its Administrative
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40
Questionnaire or (c) in the case of any party, such other address, facsimile
number, telex number or e-mail address as such party may hereafter specify for
the purpose by notice to the Agent and the Company. All reports and other
information required to be delivered to the Banks pursuant to Section 5.01(a),
(b), (c), (e) or (f) may be delivered by e-mail (either as an e-mail attachment
or by including an appropriate internet link to such reports or other
information). Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is transmitted to the telex
number specified in this Section and the appropriate answerback is received,
(ii) if given by facsimile transmission, when transmitted to the facsimile
number specified in this Section and confirmation of receipt is received, (iii)
if given by e-mail, when such e-mail is transmitted to the e-mail addressed
specified in this Section, or (iv) if given by any other means, when delivered
at the address specified in this Section; provided that notices to the Agent
under Article 2 or Article 8 shall not be effective until received.
Section 9.02. No Waivers. No failure or delay by the Agent or any Bank in
exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
Section 9.03. Expenses; Indemnification. (a) The Company shall pay (i)
all reasonable out-of-pocket expenses of the Agent, including fees and
disbursements of special counsel for the Agent, in connection with the
preparation and administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all reasonable out-of-pocket expenses
incurred by the Agent and each Bank, including (without duplication) the fees
and disbursements of outside counsel, in connection with such Event of Default
and collection, bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.
(b) The Company agrees to indemnify the Agent and each Bank, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "INDEMNITEE") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in connection
with any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) brought or threatened by a
Person which is not a party hereto or an Affiliate of a party hereto relating to
any actual, proposed or potential use of proceeds of Loans hereunder; provided
that no Indemnitee shall have the right to be indemnified hereunder for such
Indemnitee's own gross negligence or willful misconduct as determined by a court
of competent jurisdiction.
Section 9.04. Sharing of Set-offs. Each Bank agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount of principal and interest relating to its
Committed Loans which is greater than the proportion received by any other Bank
in respect of the aggregate amount of principal and interest relating to the
Committed Loans of such other Bank, the Bank receiving such proportionately
greater payment shall purchase such participations in the Notes held by the
other
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Banks, and such other adjustments shall be made, as may be required so that all
such payments of principal and interest relating to Committed Loans of the Banks
shall be shared by the Banks pro rata; provided that nothing in this Section
shall impair the right of any Bank to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of indebtedness of the Company other than its indebtedness hereunder.
Section 9.05. Amendments and Waivers. Any provision of this Agreement or
the Notes may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Company and the Required Banks (and, if the
rights or duties of the Agent are affected thereby, by the Agent); provided that
no such amendment or waiver shall, unless signed by all the Banks, (i) increase
or decrease the Commitment of any Bank (except for a ratable decrease in the
Commitments of all Banks) or subject any Bank to any additional obligation, (ii)
reduce the principal of or rate of interest on any Loan, or any fees hereunder,
(iii) postpone the date fixed for any payment of principal of or interest on any
Loan, or any fees hereunder or for any scheduled reduction or termination of any
Commitment or (iv) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes, or the number of Banks, which shall be
required for the Banks or any of them to take any action under this Section or
any other provision of this Agreement.
Section 9.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Company may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "PARTICIPANT") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Company and the Agent, such Bank shall remain responsible for the performance of
its obligations hereunder, and the Company and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. Any agreement pursuant to which any Bank may
grant such a participating interest shall provide that such Bank shall retain
the sole right and responsibility to enforce the obligations of the Company
hereunder including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in clause (i),
(ii), or (iii) of Section 9.05 without the consent of the Participant. The
Company agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Article 8 with respect
to its participating interest. An assignment or other transfer which is not
permitted by subsection (c) or (d) below shall be given effect for purposes of
this Agreement only to the extent of a participating interest granted in
accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "ASSIGNEE") all, or a proportionate part (equivalent to an
initial Commitment of not less than $10,000,000) of all, of its rights and
obligations under this Agreement and the Notes, and such Assignee shall assume
such rights and obligations, pursuant to an Assignment and
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42
Assumption Agreement in substantially the form of Exhibit G hereto executed by
such Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Company and the Agent, which consent shall not be unreasonably
withheld; provided that if an Assignee is an affiliate of such transferor Bank
or was a Bank immediately prior to such assignment, no such consent shall be
required; and provided further that such assignment may, but need not, include
rights of the transferor Bank in respect of outstanding Money Market Loans. Upon
execution and delivery of such instrument and payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank party to this
Agreement and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding extent,
and no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (c), the transferor
Bank, the Agent and the Company shall make appropriate arrangements so that, if
required, a new Note is issued to the Assignee. In connection with any such
assignment, the transferor Bank shall pay to the Agent an administrative fee for
processing such assignment in the amount of $2,500.
(d) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.03 or 8.04 than
such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Company's prior written
consent or by reason of the provisions of Section 8.02, 8.03 or 8.04 requiring
such Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
Section 9.07. Collateral. Each of the Banks represents to the Agent and
each of the other Banks that it in good faith is not relying upon any "margin
stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
Section 9.08. Governing Law; Submission to Jurisdiction. This Agreement
and each Note shall be governed by and construed in accordance with the laws of
the State of New York. The Company hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Company irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum.
Section 9.09. Counterparts; Integration; Effectiveness. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof except as
may be expressly set forth or referred to herein. This Agreement shall become
effective upon
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receipt by the Agent of counterparts hereof signed by each of the Company, the
Banks and the Agent (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex, facsimile or other written
confirmation from such party of execution of a counterpart hereof by such
party).
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Section 9.10. WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE AGENT AND
THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 9.11. Confidentiality. The Agent and each Bank agree to keep
confidential any information obtained by the Agent or such Bank from the Company
to the extent such information has been stated by the Company to be
confidential, provided that nothing herein shall prevent the Agent or any Bank
from disclosing such information (i) to the Agent or any other Bank in
connection with the transactions contemplated by this Agreement, (ii) to its
officers, directors, employees, Affiliates, agents, attorneys and accountants
who have a need to know such information in accordance with customary banking
practices and who receive such information having been made aware of the
restrictions set forth in this Section, (iii) upon the order of any court or
administrative agency, (iv) upon the request or demand of any regulatory agency
or authority having jurisdiction over such party, (v) which has been publicly
disclosed, (vi) which has been obtained from any Person other than the Company
and its Affiliates, provided that such Person is not known to it to be bound by
a confidentiality agreement with the Company or its Affiliates or known to it to
be otherwise prohibited from transmitting the information to it by a
contractual, legal or fiduciary obligation or (vii) in connection with the
exercise of any remedy hereunder in any judicial proceeding.
Section 9.12. Sharing of Payments. Each Bank agrees that if, after the
occurrence of a Triggering Event and after giving effect to any purchases of
participations and other adjustments pursuant to Section 9.04, the Banks shall
receive payment of a proportion of the aggregate amount of principal and
interest relating to the Committed Loans which is greater than the proportion
received by the banks parties to the Other Credit Agreement (the "Other Banks")
in respect of the aggregate amount of principal and interest relating to the
committed loans of such Other Banks under the Other Credit Agreement, the Banks
shall purchase such participations in the notes held by the Other Banks under
the Other Credit Agreement, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest relating to
Committed Loans of the Banks shall be shared by the Other Banks pro rata. For
purposes of this Section 9.12, "Triggering Event" means any of the termination
of the Commitments under this Agreement, the termination of the commitments
under the Other Credit Agreement, the Loans becoming due and payable under this
Agreement or the loans becoming due and payable under the Other Credit
Agreement, in each case pursuant to Article VI thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
NORTEL NETWORKS LIMITED
By /s/ Xxxxxxxxx Xxxxxxxxx
------------------------------------------
Title: Treasurer
By /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Title: Assistant Secretary
Address: 0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx X0X 0X0
Facsimile: (000) 000-0000
Attention: Treasurer
46
BANKS
By signing below, each Bank confirms that it is organized under the laws
of Canada.
Commitments
-----------
$580,000,000 XXX XXXXX XXXXXXXXX XXXX, XXXXXXX
BRANCH
By:/s/ Xxxxxxxxx Xxxx
---------------------------------------
Name: Xxxxxxxxx Xxxx
Title: Authorized Representative
By:/s/ Xxxx XxXxxxxx
---------------------------------------
Name: Xxxx XxXxxxxx
Title: Authorized Representative
$100,000,000 CREDIT SUISSE FIRST BOSTON CANADA
By:/s/ Xxxxx Xxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
By:/s/ Xxxxx Xxxxxx
---------------------------------------
Name: Xxxxx Xxxxxx
Title: Director
$100,000,000 CITIBANK CANADA
By:/s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman and Chief
Executive Officer
47
Total Commitments
-----------------
$780,000,000
CREDIT SUISSE FIRST BOSTON CANADA,
as Syndication Agent
By:/s/ Xxxxx Xxxxxxx
------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
By:/s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title: Director
THE CHASE MANHATTAN BANK OF CANADA,
as Administrative Agent
By:/s/ Xxxxxxxxx Xxxx
------------------------------------------
Name: Xxxxxxxxx Xxxx
Title: Authorized Representative
Address: 000 Xxx Xxxxxx, Xxxxx 0000
Royal Xxxx Xxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile:
before June 18, 2001: (000) 000-0000
commencing June 18, 2001: (000) 000-0000
48
ANNEX A -- Pricing Schedule
PRICING SCHEDULE
Each of "EURO-DOLLAR MARGIN" and "FACILITY FEE RATE" means, for any
date, the rate set forth below in the row opposite such term and in the column
corresponding to the "PRICING LEVEL" that applies at such date:
Level I Level II Level III Level IV Level V
------- -------- --------- -------- -------
Euro-Dollar
Margin:
Utilization < 33.3% 0.45% 0.55% 0.775% 1.00% 1.20%
-
Utilization > 33.3% but < 66.6% 0.575% 0.675% 0.90% 1.125% 1.325%
-
Utilization > 66.6% 0.70% 0.925% 1.15% 1.375% 1.575%
Facility Fee Rate 0.05% 0.075% 0.10% 0.125% 0.175%
For purposes of this Schedule, the following terms have the
following meanings:
"LEVEL I PRICING" applies at any date if, at such date, the
Company's long-term debt is rated A or higher by S&P or A2 or higher by
Moody's, except as provided below under "Split Rating".
"LEVEL II PRICING" applies at any date if, at such date, (i)
the Company's long-term debt is rated A- or higher by S&P or A3 or
higher by Moody's, and (ii) Level I Pricing does not apply, except as
provided below under "Split Rating".
"LEVEL III PRICING" applies at any date if, at such date, (i)
the Company's long-term debt is rated BBB+ or higher by S&P or Baa1 or
higher by Moody's and (ii) neither Level I Pricing nor Level II Pricing
applies, except as provided below under "Split Rating".
"LEVEL IV PRICING" applies at any date if, at such date, (i)
the Company's long-term debt is rated BBB or higher by S&P or Baa2 or
higher by Moody's and (ii) none of Level I Pricing, Level II Pricing or
Level III Pricing applies, except as provided below under "Split
Rating".
"LEVEL V PRICING" applies at any date if, at such date, none
of Level I Pricing, Level II Pricing, Level III Pricing or Level IV
Pricing applies.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"PRICING LEVEL" refers to the determination of which of Xxxxx
X, Xxxxx XX, Xxxxx XXX, Xxxxx XX or Level V applies at any date.
"S&P" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc.
"UTILIZATION" means, on any day, the percentage equivalent of
a fraction, (i) the numerator of which is the aggregate outstanding
principal amount of the Loans on such day, after giving effect to any
borrowing or payment on such day, and (ii) the
X-X-0
00
xxxxxxxxxxx of which is the aggregate amount of the Commitments on such
day, after giving effect to any reduction of the Commitments on such
day; provided that for any Euro-Dollar Loan included in a Borrowing
made pursuant to Section 2.01(b), Utilization will be deemed to exceed
66.6%.
"SPLIT RATING" applies if the Company has a split rating and the
ratings differential is two levels or more, in which case the ratings at
midpoint will apply. If there is no midpoint rating, the higher of the two
intermediate ratings will apply.
The credit ratings to be utilized for purposes of this Schedule are
those assigned to the senior unsecured long-term debt securities of the Company
without third-party credit enhancement, and any rating assigned to any other
debt security of the Company shall be disregarded. The rating in effect at any
date is that in effect at the close of business on such date.
A-A-2
50
EXHIBIT A -- Note
NOTE
Toronto, Canada __________ __ ,2001
For value received, NORTEL NETWORKS LIMITED, a Canadian corporation
(the "BORROWER"), promises to pay to the order of ________________________ (the
"BANK"), for the account of its Applicable Lending Office, the unpaid principal
amount of each Loan made by the Bank to the Borrower pursuant to the Credit
Agreement referred to below on the maturity date specified therefor in the
Credit Agreement. The Borrower promises to pay interest on the unpaid principal
amount of each such Loan on the dates and at the rate or rates provided for in
the Credit Agreement. All such payments of principal and interest shall be made
in funds immediately available in Toronto at the office of The Chase Manhattan
Bank of Canada, 000 Xxx Xxxxxx, Xxxxx 0000, Royal Xxxx Xxxxx, Xxxxx Xxxxx,
Xxxxxxx, Xxxxxxx, X0X 0X0.
All Loans made by the Bank, the respective currencies, types and
maturities thereof and all repayments of the principal thereof shall be recorded
by the Bank and, if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the foregoing information
with respect to each such Loan then outstanding may be endorsed by the Bank on
the schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement dated
as of June 14, 2001 among Nortel Networks Limited, the banks and syndication
agent parties thereto and The Chase Manhattan Bank of Canada, as Administrative
Agent (as the same may be amended from time to time, the "CREDIT AGREEMENT").
Terms defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.
NORTEL NETWORKS LIMITED
By________________________________
Name:
Title:
By________________________________
Name:
Title:
A-1
51
LOANS AND PAYMENTS OF PRINCIPAL
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Currency and Type Amount of
Amount of of Principal Maturity Notation
Date Loan Loan Repaid Date Made by
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A-2
52
EXHIBIT B -- Money Market Quote Request
FORM OF MONEY MARKET QUOTE REQUEST
[Date]
To: The Chase Manhattan Bank of Canada, as Administrative Agent (the "AGENT")
From: Nortel Networks Limited
Re: Credit Agreement (as amended from time to time, the "CREDIT AGREEMENT")
dated as of June 14, 2001 among Nortel Networks Limited, the Banks and
Syndication Agent parties thereto and the Agent
We hereby give notice pursuant to Section 2.03 of the Credit Agreement
that we request Money Market Quotes for the following proposed Money Market
Borrowing(s):
Date of Borrowing:
--------------------------
Principal Amount1 Currency2 Interest Period3
---------------- -------- ---------------
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate]. [The applicable base rate is the London Interbank Offered Rate.]
Terms used herein have the meanings assigned to them in the Credit
Agreement.
NORTEL NETWORKS LIMITED
By___________________________
Name:
Title:
By___________________________
Name:
Title:
----------
1 Amount must be $25,000,000 or C$25,000,000 or a larger multiple of
$5,000,000 or C$5,000,000.
2 Currency must be U.S. Dollars or Canadian Dollars.
3 Not less than one month (LIBOR Auction) or not less than 14 days
(Absolute Rate Auction), subject to the provisions of the definition of
Interest Period.
B-1
53
EXHIBIT C -- Invitation for Money Market Quotes
FORM OF INVITATION FOR MONEY MARKET QUOTES
To: [Name of Bank]
Re: Invitation for Money Market Quotes to Nortel Networks Inc. (the
"BORROWER")
Pursuant to Section 2.03 of the Credit Agreement dated as of June 14,
2001 among Nortel Networks Limited, the Banks and Syndication Agent parties
thereto and the undersigned, as Administrative Agent, as amended from time to
time, we are pleased on behalf of the Borrower to invite you to submit Money
Market Quotes to the Borrower for the following proposed Money Market
Borrowing(s):
Date of Borrowing: _________________
Principal Amount Currency Interest Period
---------------- -------- ---------------
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate]. [The applicable base rate is the London Interbank Offered Rate.] Please
respond to this invitation by no later than [10:00 A.M.] [9:30 A.M.] (Toronto
time) on [date].
XXX XXXXX XXXXXXXXX XXXX XX XXXXXX,
as Administrative Agent
By:___________________________________
Authorized Officer
C-1
54
EXHIBIT D -- Money Market Quote
FORM OF MONEY MARKET QUOTE
To: The Chase Manhattan Bank of Canada, as Administrative Agent
Re: Money Market Quote to Nortel Networks Limited (the "BORROWER")
In response to your invitation on behalf of the Borrower dated
____________, __, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank:_________________________________
2. Person to contact at Quoting Bank:________________________________
3. Date of Borrowing:________________________________
4. Currency of Borrowing:________________________________
5. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest Money Market [Absolute
Amount*** Period**** [Margin*****] Rate]******
--------- ---------- ------------- -----------
$
$
[Provided, that the aggregate principal amount of Money Market Loans
for which the above offers may be accepted shall not exceed $_____________.]**
----------
* As specified in the related Invitation.
** Currency must be U.S. Dollars or Canadian Dollars.
*** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the
individual offers exceeds the amount the Bank is willing to lend. Bids
must be made for $5,000,000 or C$5,000,000 or a larger multiple of
$1,000,000 or C$l,000,000.
**** Not less than one month or not less than 14 days, as specified in the
related Invitation. No more than five bids are permitted for each
Interest Period.
***** Margin over or under the London Interbank Offered Rate determined for
the applicable Interest Period. Specify percentage (to the nearest
1/10,000th of 1%) and specify whether "PLUS" or "MINUS".
****** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
D-1
55
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Credit Agreement
dated as of June 14, 2001 among Nortel Networks Limited, the Banks and
Syndication Agent parties thereto and yourself, as Administrative Agent, as
amended from time to time, irrevocably obligates us to make the Money Market
Loan(s) for which any offer(s) are accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Date:_______________________ By:_______________________________
Authorized Officer
D-2
56
EXHIBIT E -- Opinion of Counsel for the Company
OPINION OF
COUNSEL FOR THE COMPANY
_________________, 2001
To the Banks and the Administrative Agent
Referred to Below
c/o The Chase Manhattan Bank of Canada, as Administrative Agent
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxx Xxxx Xxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Dear Sirs:
I am the Corporate Secretary of Nortel Networks Limited (the "COMPANY")
and give this opinion pursuant to Section 3.01(b) of the Credit Agreement (the
"CREDIT AGREEMENT") dated as of June 14, 2001 among the Company, the banks and
syndication agent parties thereto and The Chase Manhattan Bank of Canada, as
Administrative Agent. Terms defined in the Credit Agreement are used herein as
therein defined.
I have examined originals or copies, certified or otherwise identified
to my satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for purposes of this
opinion.
In rendering this opinion, I have assumed:
(a) the signatures on the documents I have examined are originals; and
(b) with respect to the valid and binding nature of the Credit
Agreement and the delivery of the Credit Agreement, the laws of the State of New
York are the same as the laws of Canada.
The opinions expressed herein are subject to the following
qualifications:
(a) enforceability of the Credit Agreement and the Notes may be limited
by bankruptcy, insolvency, or other laws affecting the enforcement of creditors'
rights generally;
(b) equitable remedies, including remedies of specific performance and
injunction, may only be granted in the discretion of a court of competent
jurisdiction;
(c) the Currency Act (Canada) precludes the courts in Canada from
awarding a judgment for an amount expressed in a currency other than Canadian
dollars; and
X-0
00
(x) any requirement to pay interest at a greater rate after than before
default may not be enforceable if the same is construed by a court to constitute
a penalty.
I am qualified to practice law solely in the Province of Ontario,
Canada and express no opinion as to any laws or matters governed by any laws
other than the laws of the Province of Ontario and the federal law of Canada
applicable therein.
Upon the basis of the foregoing, I am of the opinion that:
1. The Company is a corporation duly incorporated and validly existing
under the laws of Canada and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, the absence of which would have a material adverse
effect on the ability of the Company to perform its obligations under the Credit
Agreement and the Notes.
2. The execution and delivery by the Company of the Credit Agreement
and the Notes and the performance by the Company of the Credit Agreement and the
Notes (i) are within the Company's corporate powers and have been duly
authorized by all necessary corporate action, (ii) require no action by or in
respect of, or filing with, any governmental body, agency or official, and (iii)
do not contravene any provision of applicable law or regulation or any provision
of the certificate of incorporation or by-laws of the Company or any contractual
restriction, order, decree or other instrument binding upon the Company or any
of its Subsidiaries, except in the case of (ii) and (iii) above, any such
action, filing or contravention which would not have a material adverse effect
on the ability of the Company to perform its obligations under the Credit
Agreement and the Notes.
3. Assuming that the execution, delivery and performance by each of the
parties to the Credit Agreement, other than the Company, are within such
persons' corporate powers, have been duly authorized by all necessary corporate
action and have been duly executed and delivered, the Credit Agreement
constitutes a valid and binding agreement of the Company, and each Note
constitutes a valid and binding obligation of the Company, in each case
enforceable in accordance with its terms.
4. To the best of my knowledge, there is no action, suit or proceeding
pending or threatened against or affecting the Company or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official, in which there is a reasonable possibility of an adverse decision
which could have a material adverse effect on the ability of the Company to
perform its obligations under the Credit Agreement, except as disclosed in the
Company's Exchange Act reports and the Disclosure Materials, or which in any
manner draws into question the validity of the Credit Agreement or the Notes.
Yours truly,
Xxxxxxx X. Xxxxx
Corporate Secretary
E-2
58
EXHIBIT F -- Opinion of Special Counsel for the Administrative Agent
OPINION OF
XXXXX XXXX & XXXXXXXX, SPECIAL COUNSEL
FOR THE ADMINISTRATIVE AGENT
________________, 2001
To the Banks and the Agent
Referred to Below
c/o The Chase Manhattan Bank of Canada, as Administrative Agent
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxx Xxxx Xxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Dear Sirs:
We have participated in the preparation of the Credit Agreement (the
"CREDIT AGREEMENT") dated as of June 14, 2001 among Nortel Networks Limited (the
"COMPANY"), the banks and syndication agent parties thereto and The Chase
Manhattan Bank of Canada, as Administrative Agent (the "AGENT"), and have acted
as special counsel for the Agent for the purpose of rendering this opinion
pursuant to Section 3.01(c) of the Credit Agreement. Terms defined in the Credit
Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that, assuming
that the execution, delivery and performance by the Company of the Credit
Agreement and the Notes are within the Company's corporate powers and have been
duly authorized by all necessary corporate action, the Credit Agreement
constitutes a valid and binding agreement of the Company and each Note
constitutes a valid and binding obligation of the Company, in each case
enforceable in accordance with its terms except as the same may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
by general principles of equity.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York. In giving the foregoing
opinion, we express no opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any Bank is located which
limits the rate of interest that such Bank may charge or collect.
F-1
59
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other person without our prior written consent.
Very truly yours,
F-2
60
EXHIBIT G -- Assignment and Assumption Agreement
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of ________, ___ among [NAME OF ASSIGNOR] (the
"ASSIGNOR"), [NAME OF ASSIGNEE] (the "ASSIGNEE"), [NORTEL NETWORKS LIMITED (the
"COMPANY"), and THE CHASE MANHATTAN BANK OF CANADA, as Administrative Agent (the
"AGENT")].
WHEREAS, this Assignment and Assumption Agreement (the "AGREEMENT")
relates to the Credit Agreement dated as of June 14, 2001 among the Company, the
Assignor and the other Banks and Syndication Agent party thereto, and the Agent
(as amended from time to time, the "CREDIT AGREEMENT");
[WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Committed Loans to the Company in an aggregate principal
amount at any time outstanding not to exceed $___________;]
WHEREAS, Committed Loans made to the Company by the Assignor under the
Credit Agreement in the aggregate principal amount of $____________ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of its
[Commitment thereunder in an amount equal to $___________ (the "ASSIGNED
AMOUNT"), together with a corresponding portion of its outstanding Committed
Loans,] [outstanding Committed Loans in an aggregate principal amount equal to
$_______ (the "ASSIGNED AMOUNT")]1 and the Assignee proposes to accept
assignment of such rights and assume the corresponding obligations from the
Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the principal amount of the
Committed Loans made by the Assignor outstanding at the date hereof. Upon the
execution and delivery hereof by the Assignor, the Assignee, [the Company and
the Agent] and the payment of the amounts specified in Section 3 required to be
paid on the date hereof (i) the Assignee shall, as of the date hereof, succeed
to the rights and be obligated to perform the obligations of a Bank under the
Credit Agreement with [a Commitment]
----------
1 Use second variation if Commitments have terminated.
G-1
61
[outstanding Committed Loans]1 in an amount equal to the Assigned Amount, and
(ii) the [Commitment] [outstanding Committed Loans]1 of the Assignor shall, as
of the date hereof, be reduced by a like amount and the Assignor released from
its obligations under the Credit Agreement to the extent such obligations have
been assumed by the Assignee. The assignment provided for herein shall be
without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them. It is
understood that facility fees accrued to the date hereof with respect to the
Assigned Amount are for the account of the Assignor and such fees accruing from
and including the date hereof with respect to the Assigned Amount are for the
account of the Assignee. Each of the Assignor and the Assignee hereby agrees
that if it receives any amount under the Credit Agreement which is for the
account of the other party hereto, it shall receive the same for the account of
such other party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
[SECTION 4. Consent of the Company and the Agent. This Agreement is
conditioned upon the consent of the Company and the Agent pursuant to Section
9.06(c) of the Credit Agreement. The execution of this Agreement by the Company
and the Agent is evidence of this consent. Pursuant to Section 9.06(c), the
Company agrees to execute and deliver a Note payable to the order of the
Assignee to evidence the assignment and assumption provided for herein.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Company, or the validity and enforceability of the obligations of the Company in
respect of the Credit Agreement or any Note. The Assignee acknowledges that it
has, independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Company.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
----------
1 Use second variation if Commitments have terminated.
G-2
62
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[NAME OF ASSIGNOR]
By:____________________________________
Name:
Title:
[NAME OF ASSIGNEE]
By:____________________________________
Name:
Title:
[NORTEL NETWORKS LIMITED]
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
THE CHASE MANHATTAN BANK OF CANADA,
as Administrative Agent
By:____________________________________
Name:
Title: ]2
----------
2 Omit if consents not required.
G-3
