EXECUTION
================================================================================
CREDIT AGREEMENT
DATED AS OF FEBRUARY 12, 1998
AMONG
MITEL CORPORATION,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as Advisor, Arranger and Syndication Agent,
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
================================================================================
MITEL CORPORATION
CREDIT AGREEMENT
TABLE OF CONTENTS
Page
----
SECTION 1.
DEFINITIONS...................................................... 2
1.1 Certain Defined Terms...................................................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement............................................................................ 39
1.3 Other Definitional Provisions and Rules of Construction.................................... 39
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS................................... 40
2.1 Commitments; Making of Loans; the Register; Optional Notes................................. 40
2.2 Interest on the Loans...................................................................... 48
2.3 Fees....................................................................................... 53
2.4 Repayments, Prepayments and Reductions in Revolving Loan
Commitments; General Provisions Regarding Payments; Application
of Proceeds of Collateral and Payments Under Guaranties.................................... 53
2.5 Use of Proceeds............................................................................ 66
2.6 Special Provisions Governing Eurodollar Rate Loans......................................... 67
2.7 Increased Costs; Taxes; Capital Adequacy................................................... 70
2.8 Obligation of Lenders and Issuing Lenders to Mitigate...................................... 72
2.9 Defaulting Lenders......................................................................... 73
2.10 Removal or Replacement of a Lender......................................................... 75
2.11 Certain Provisions Regarding Determination of Dollar Equivalent............................ 76
SECTION 3.
LETTERS OF CREDIT................................................... 77
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.................................................................................... 77
3.2 Letter of Credit Fees...................................................................... 80
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of
Credit..................................................................................... 81
3.4 Obligations Absolute....................................................................... 85
3.5 Indemnification; Nature of Issuing Lenders' Duties......................................... 86
3.6 Increased Costs and Taxes Relating to Letters of Credit.................................... 87
3.7 Existing Letters of Credit................................................................. 88
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT....................................... 88
4.1 Conditions to Term Loans and Initial Revolving Loans and Swing
Line Loans................................................................................. 88
4.2 Conditions to All Loans....................................................................100
4.3 Conditions to Letters of Credit............................................................101
(i)
Page
----
SECTION 5.
COMPANY'S REPRESENTATIONS AND WARRANTIES.................................102
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries...............................................................................102
5.2 Authorization of Borrowing, etc............................................................103
5.3 Financial Condition........................................................................104
5.4 No Material Adverse Change; No Restricted Junior Payments..................................105
5.5 Title to Properties; Liens; Real Property..................................................105
5.6 Litigation; Adverse Facts..................................................................106
5.7 Payment of Taxes...........................................................................106
5.8 Performance of Agreements; Materially Adverse Agreements;
Material Contracts.........................................................................107
5.9 Governmental Regulation....................................................................107
5.10 Securities Activities......................................................................107
5.11 Employee Benefit Plans.....................................................................108
5.12 Certain Fees...............................................................................109
5.13 Environmental Protection...................................................................109
5.14 Employee Matters...........................................................................110
5.15 Solvency...................................................................................110
5.16 Matters Relating to Collateral.............................................................110
5.17 Related Agreements.........................................................................112
5.18 Employment and Labor Agreements............................................................113
5.19 Disclosure.................................................................................113
5.20 Subsidiary Guarantors......................................................................113
SECTION 6.
COMPANY'S AFFIRMATIVE COVENANTS.....................................114
6.1 Financial Statements and Other Reports.....................................................114
6.2 Corporate Existence, etc...................................................................121
6.3 Payment of Taxes and Claims; Tax Consolidation.............................................121
6.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds............................................................122
6.5 Inspection Rights; Lender Meeting..........................................................124
6.6 Compliance with Laws, etc..................................................................125
6.7 Environmental Review and Investigation, Disclosure, Etc.;
Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws..................................125
6.8 Execution of Guaranties and Personal Property Collateral Documents
by Certain Subsidiaries and Future Subsidiaries............................................128
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real
Property Collateral........................................................................129
6.10 Certain Post-Closing Matters...............................................................133
6.11 Interest Rate Protection...................................................................134
SECTION 7.
COMPANY'S NEGATIVE COVENANTS.......................................134
7.1 Indebtedness...............................................................................134
7.2 Liens and Related Matters..................................................................135
7.3 Investments; Joint Ventures................................................................137
7.4 Contingent Obligations.....................................................................137
(ii)
Page
----
7.5 Restricted Junior Payments.................................................................139
7.6 Financial Covenants........................................................................139
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions...........................143
7.8 Consolidated Capital Expenditures..........................................................145
7.9 Restriction on Operating Leases............................................................146
7.10 Sales and Lease-Backs......................................................................146
7.11 Sale or Discount of Receivables............................................................146
7.12 Transactions with Shareholders and Affiliates..............................................147
7.13 Disposal of Subsidiary Stock...............................................................147
7.14 Conduct of Business........................................................................147
7.15 Amendments or Waivers of Related Agreements; Amendments of
Documents Relating to Subordinated Indebtedness............................................147
7.16 Fiscal Year................................................................................148
SECTION 8.
EVENTS OF DEFAULT.............................................148
8.1 Failure to Make Payments When Due..........................................................148
8.2 Default in Other Agreements................................................................148
8.3 Breach of Certain Covenants................................................................149
8.4 Breach of Warranty.........................................................................149
8.5 Other Defaults Under Loan Documents........................................................149
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.......................................149
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.........................................150
8.8 Judgments and Attachments..................................................................150
8.9 Dissolution................................................................................151
8.10 Employee Benefit Plans.....................................................................151
8.11 Material Adverse Effect....................................................................151
8.12 Change in Control..........................................................................151
8.13 Invalidity of Guaranties; Failure of Security; Repudiation of
Obligations................................................................................152
8.14 Failure to Consummate Acquisition..........................................................152
SECTION 9.
AGENTS..................................................154
9.1 Appointment................................................................................154
9.2 Powers and Duties; General Immunity........................................................156
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness...........................................................................157
9.4 Right to Indemnity.........................................................................158
9.5 Successor Agent............................................................................158
9.6 Collateral Documents and Guaranties........................................................159
SECTION 10.
MISCELLANEOUS..............................................160
10.1 Assignments and Participations in Loans and Letters of Credit..............................160
10.2 Expenses...................................................................................164
10.3 Indemnity..................................................................................165
10.4 Set-Off; Security Interest in Deposit Accounts.............................................166
10.5 Ratable Sharing............................................................................166
(iii)
Page
----
10.6 Amendments and Waivers.....................................................................167
10.7 Independence of Covenants..................................................................168
10.8 Notices....................................................................................168
10.9 Survival of Representations, Warranties and Agreements.....................................169
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative......................................169
10.11 Marshalling; Payments Set Aside............................................................169
10.12 Severability...............................................................................170
10.13 Obligations Several; Independent Nature of Lenders' Rights.................................170
10.14 Headings...................................................................................170
10.15 Applicable Law.............................................................................170
10.16 Successors and Assigns.....................................................................171
10.17 Consent to Jurisdiction and Service of Process.............................................171
10.18 Waiver of Jury Trial.......................................................................172
10.19 Confidentiality............................................................................172
10.20 Judgment Currency..........................................................................173
10.21 Counterparts; Effectiveness................................................................173
10.22 Supremacy of Credit Agreement..............................................................174
Signature pages ....................................................................... S-1
(iv)
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT
IV FORM OF TRANCHE A TERM NOTE
V FORM OF AXEL SERIES B NOTE
VI-A FORM OF REVOLVING NOTE
VI-B FORM OF SWING LINE NOTE
VII FORM OF COMPLIANCE CERTIFICATE
VIII-A FORM OF OPINION OF XXXXX XXXX XXXXX CONSTANT &
XXXXXXXX
VIII-B FORM OF OPINION OF XXXXXXXX XXXXXXXX
VIII-C FORM OF OPINION OF XXXXXX XXXXX
VIII-D FORM OF OPINION OF XXXXXXXX & XXXXX
VIII-E FORM OF OPINION OF LANG XXXXXXXX
VIII-F FORM OF OPINION OF XXXXX XXXXXX
VIII-G FORM OF OPINION OF XXXXXX X. XXXXXXXX
VIII-H FORM OF OPINION OF XXXXXX X. XXXXXXXXXX
IX FORM OF OPINION OF O'MELVENY & XXXXX LLP
X FORM OF ASSIGNMENT AGREEMENT
XI FORM OF AUDITOR'S LETTER
XII FORM OF FINANCIAL CONDITION CERTIFICATE
XIII FORM OF COMPANY SECURITY AGREEMENT (CANADA)
XIV FORM OF DEMAND DEBENTURE (CANADA)
XV FORM OF DEBENTURE PLEDGE AGREEMENT (CANADA)
XVI FORM OF DEED OF HYPOTHEC (QUEBEC)
XVII FORM OF COMPANY MASTER PLEDGE AGREEMENT
XVIII FORM OF COMPANY PATENT AND TRADEMARK SECURITY
AGREEMENT (U.S.)
XIX FORM OF SUBSIDIARY GUARANTY
XX FORM OF SUBSIDIARY PLEDGE AGREEMENT (U.S.)
XXI FORM OF SUBSIDIARY SECURITY AGREEMENT (U.S.)
XXII FORM OF SUBSIDIARY PATENT AND TRADEMARK SECURITY
AGREEMENT (U.S.)
XXIII FORM OF MORTGAGE (U.S.)
XXIV FORM OF GUARANTEE AND DEBENTURE (U.K.)
XXV FORM OF COMPANY PLEDGE AGREEMENT (U.K.)
XXVI FORM OF COMPANY PLEDGE AGREEMENT (SWEDEN)
XXVII FORM OF SUBSIDIARY SECURITY AGREEMENT (SWEDEN)
XXVIII FORM OF COMPANY SECURITY AGREEMENT (U.S.)
XXIX FORM OF COPYRIGHT SECURITY AGREEMENT (U.S.)
(v)
SCHEDULES
1.1A EXISTING LETTERS OF CREDIT
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1C CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP;
MANAGEMENT
4.1H CLOSING DATE MORTGAGED PROPERTIES
4.1K CLOSING DATE ENVIRONMENTAL REPORTS
4.1L PLESSEY ENTITIES FINANCIAL STATEMENTS
5.1 SUBSIDIARIES OF COMPANY
5.5 REAL PROPERTY
5.6 LITIGATION
5.8 MATERIAL CONTRACTS
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
5.13 ENVIRONMENTAL MATTERS
5.16 INTELLECTUAL PROPERTY AND OTHER COLLATERAL MATTERS
5.18 EMPLOYMENT AGREEMENTS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
(vi)
MITEL CORPORATION
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of February 12, 1998 and entered into by
and among MITEL CORPORATION, a corporation organized under the laws of Canada
("Company"), XXXXXXX SACHS CREDIT PARTNERS L.P. ("GSCP"), as advisor, arranger
and syndication agent (in such capacity, "Syndication Agent"), THE FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to
herein as a "Lender" and collectively as "Lenders"), and CANADIAN IMPERIAL BANK
OF COMMERCE ("CIBC"), as agent for Lenders (in such capacity, "Administrative
Agent").
R E C I T A L S
WHEREAS, on or before the Closing Date (this and other capitalized terms
used in these recitals without definition being used as defined in subsection
1.1) Company and/or certain of its Subsidiaries will purchase all of the
outstanding capital stock of the Plessey Entities pursuant to the Acquisition
Agreement;
WHEREAS, Lenders have agreed to extend certain credit facilities to
Company, the proceeds of which will be used (i) to fund the Acquisition
Financing Requirements, and (ii) to provide financing for working capital and
other general corporate purposes of Company and its Subsidiaries;
WHEREAS, Company desires to secure all of the Obligations hereunder and
under the other Loan Documents by granting to Administrative Agent, on behalf of
Lenders, a first priority Lien on substantially all of its personal property and
certain of its real property, including a pledge of all of the capital stock of
each of its Subsidiaries; and
WHEREAS, Company and certain of its Subsidiaries have agreed to guarantee
the Obligations hereunder and under the other Loan Documents and to secure their
guaranties by granting to Administrative Agent, on behalf of Lenders, a first
priority Lien on substantially all of their respective personal property and
certain of their respective real property, including a pledge of all of the
capital stock of certain of their respective Subsidiaries:
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders and Agents agree as
follows:
1
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the following
meanings:
"Acquisition" means the transactions contemplated by the Acquisition
Agreement.
"Acquisition Agreement" means collectively, (i) that certain Share Sale and
Purchase Agreement dated February 12, 1998 by and among Seller, Mitel Telecom
and Company, as guarantor, and the Oldham Agreements (as defined therein), (ii)
that certain Disclosure Letter dated February 12, 1998 by Seller to Mitel
Telecom, and (iii) that certain Tax Covenant (as defined in the Share Sale and
Purchase Agreement set forth in clause (i) above) and (iv) that certain
Environmental Deed dated February 12, 1998 between Seller and Mitel Telecom, in
each case in the form delivered to Administrative Agent, Syndication Agent and
Lenders prior to their execution of this Agreement and as such agreements may be
amended from time to time thereafter to the extent permitted under subsection
7.15A.
"Acquisition Financing Requirements" means the aggregate of all amounts
necessary (i) to finance the purchase price payable in connection with the
Acquisition, (ii) to refinance certain Indebtedness outstanding under the
Existing Credit Agreements, and (iii) to pay Transaction Costs.
"Adjusted Eurodollar Rate" means, for any Interest Rate Determination Date
with respect to an Interest Period for a Eurodollar Rate Loan, the interest rate
per annum (rounded upward, if necessary, to the nearest 1/16 of one percent) as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time comparable to such Interest Period which appears on the Telerate
Page 3750 as of 11:00 a.m. (New York time) two Business Days before the first
day of such Interest Period; provided, however, that if the rate described above
does not appear on the Telerate System on any applicable Interest Rate
Determination Date, the Adjusted Eurodollar Rate shall be the rate (rounded
upward as described above, if necessary for deposits in U.S. dollars for a
period substantially equal to the interest period on the Reuters Page "LIBO" or
such other page as may replace the LIBO page on that service for the purpose of
displaying such rates), as of 11:00 a.m. (London time) two Business Days before
the first day of such Interest Period.
If both the Telerate and Reuters system are unavailable, then the rate for
that date will be determined on the basis of the offered rates for deposits in
U.S. dollars for a period of time comparable to such Interest Period which are
offered by four major banks in the London interbank market at approximately
11:00 a.m. (New York time) two Business Days before the first day of such
Interest Period as selected by the Administrative Agent. The principal London
office of each of the four major London banks will be requested to provide a
quotation of its U.S. dollar deposit offered rate. If at least two such
quotations are provided, the rate for that date will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the rate
for the date will be determined on the basis of the rates quoted for loans in
U.S. dollars to leading European banks for a period of time comparable to such
Interest Period offered by major banks in New York City at approximately 11:00
a.m. (New York time) two Business Days before the first day of such
2
Interest Period. In the event that Administrative Agent is unable to obtain any
such quotation as provided above, it will be deemed that the Adjusted Eurodollar
Rate for such Interest Rate cannot be determined.
In the event that the Board of Governors of the Federal Reserve System
shall impose a Eurodollar Rate Reserve Percentage with respect to Eurocurrency
Liabilities, the Adjusted Eurodollar Rate for an Interest Period shall be equal
to the amount determined above for such Interest Period divided by a percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage for such Interest
Period.
"Administrative Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
"Affected Lender" has the meaning assigned to that term in subsection 2.6C.
"Affiliate", as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agent" means, individually, each of Syndication Agent and Administrative
Agent, and "Agents" means Syndication Agent and Administrative Agent,
collectively.
"Agreement" means this Credit Agreement dated as of February 12, 1998, as
it may be amended, supplemented or otherwise modified from time to time.
"Applicable Leverage Ratio" means, with respect to any date of
determination, the Consolidated Leverage Ratio set forth in the Pricing
Certificate (as defined below) in effect for the Pricing Period (as defined
below) in which such date of determination occurs. For purposes of this
definition, (i) "Pricing Certificate" means an Officer's Certificate of Company
certifying as to the Consolidated Leverage Ratio as of the last day of any
Fiscal Quarter and setting forth the calculation of such Consolidated Leverage
Ratio in reasonable detail, which Officer's Certificate may be delivered to
Administrative Agent at any time on or after the date of delivery by Company of
the Compliance Certificate (the "Related Compliance Certificate") with respect
to the period ending on the last day of such Fiscal Quarter pursuant to
subsection 6.1(iv), and (ii) "Pricing Period" means each period commencing on
the first Business Day after the delivery to Administrative Agent of a Pricing
Certificate and ending on the first Business Day after the next Pricing
Certificate is delivered to Administrative Agent; provided that, anything
contained in this definition to the contrary notwithstanding, (a) the first
Pricing Period for purposes of calculating the Applicable Leverage Ratio shall
commence no earlier than the date which is six months after the Closing Date,
and the Pricing Certificate in respect of such first Pricing Period may be
delivered at any time on or after such six-month anniversary date and shall
relate to the most recent financial statements delivered by Company to
Administrative Agent prior to such date pursuant to subsection 6.1(ii) or
6.1(iii), (b) the Applicable Leverage Ratio for the period from the Closing Date
to but excluding the date of commencement of such first Pricing Period shall be
deemed to be 1.50:1.00 for purposes of making the relevant calculation referred
to
3
above, and (c) in the event that, after the commencement of such first Pricing
Period, (X) Company fails to deliver a Pricing Certificate to Administrative
Agent setting forth the Consolidated Leverage Ratio as of the last day of any
Fiscal Quarter on or before the last day on which Company is required to deliver
the Related Compliance Certificate (such last day being the "Cutoff Date") and
(Y) Administrative Agent determines (each such determination being an "Agent
Determination") on or after the Cutoff Date (on the basis of the Related
Compliance Certificate or a Pricing Certificate delivered after the Cutoff Date)
that the Applicable Leverage Ratio that would have been in effect if Company had
delivered a Pricing Certificate on the Cutoff Date is greater than the
Consolidated Leverage Ratio set forth in the most recent Pricing Certificate
actually delivered by Company, then (1) the Applicable Leverage Ratio in effect
for purposes of making the relevant calculation referred to above for the period
from the Cutoff Date to the date of delivery by Company of the next Pricing
Certificate (or, if earlier, the next date on which an Agent Determination is
made) shall be the Consolidated Leverage Ratio determined pursuant to the Agent
Determination and (2) on the first Business Day after Administrative Agent
delivers written notice to Company of any Agent Determination, Company shall pay
to Administrative Agent, for distribution (as appropriate) to Lenders, an
aggregate amount equal to the additional interest and letter of credit fees
Company would have been required to pay in respect of all applicable Loans,
Letters of Credit or Commitments in respect of which any interest or fees have
been paid by Company during the period from the Cutoff Date to the date such
notice is given by Administrative Agent to Company if the amount of such
interest and fees had been calculated using the Applicable Leverage Ratio based
on such Agent Determination.
"Applicable Base Rate Margin" means (a) for the period from the Closing
Date up to (but excluding) the date of commencement of the first Pricing Period,
1.00% per annum for Tranche A Term Loans, 1.25% per annum for AXELs Series B and
1.00% per annum for Revolving Loans, and (b) for any date thereafter, a rate per
annum equal to the percentage set forth below opposite the Applicable Leverage
Ratio in effect as of such date of determination, any change in any such
Applicable Base Rate Margin to be effective on the date of any corresponding
change in the Applicable Leverage Ratio.
================================================================================
Applicable Base Rate Applicable Base Rate
Applicable Margin for Tranche Margin for AXELs
Leverage Ratio A Term Loans Series B
================================================================================
greater than or equal 1.00% 1.25%
to 1.50:1.00
--------------------------------------------------------------------------------
less than 1.50:1.00 .75% 1.25%
but greater than or
equal to 1.00:1.00
--------------------------------------------------------------------------------
less than 1.00:1.00 .50% 1.00%
================================================================================
"Applicable Eurodollar Rate Margin" means (a) for the period from the
Closing Date up to (but excluding) the date of commencement of the first Pricing
Period, 2.00% per annum for Tranche A Term Loans, 2.25% per annum for AXELs
Series B and 2.00% per annum for Revolving Loans, and (b) for any date
thereafter, a rate per annum equal to the percentage set forth below opposite
the Applicable Leverage Ratio in effect as of such date of determination, any
change in any such Applicable Eurodollar Rate Margin to be effective on the date
of any corresponding change in the Applicable Leverage Ratio.
4
================================================================================
Applicable Eurodollar Rate Applicable Eurodollar
Applicable Margin for Tranche A Rate Margin for
Leverage Ratio Term Loans AXELs Series B
================================================================================
greater than or equal 2.00% 2.25%
to 1.50:1.00
--------------------------------------------------------------------------------
less than 1.50:1.00 1.75% 2.25%
but greater than or
equal to 1.00:1.00
--------------------------------------------------------------------------------
less than 1.00:1.00 1.50% 2.00%
================================================================================
"Asset Sale" means the sale by Company or any of its Subsidiaries to any
Person other than Company or any of its wholly-owned Subsidiaries of (i) any of
the stock of any of Company's Subsidiaries, (ii) substantially all of the assets
of any division or line of business of Company or any of its Subsidiaries, or
(iii) any other assets (whether tangible or intangible) of Company or any of its
Subsidiaries (other than (a) inventory sold in the ordinary course of business,
(b) any sale of assets in connection with sales and lease-back transactions
expressly permitted pursuant to subsection 7.10, and (c) any such other assets
to the extent that the aggregate value of such assets sold in any single
transaction or related series of transactions is equal to $2,500,000 or less).
"Assignment Agreement" means an Assignment Agreement in substantially the
form of Exhibit X annexed hereto.
"Auditor's Letter" means a letter, substantially in the form of Exhibit XI
annexed hereto, acknowledged and agreed to by Company and Ernst & Young and
delivered to Administrative Agent pursuant to subsection 4.1T.
"AXEL(sm)* Series B" means a Loan made by a Lender to Company pursuant to
subsection 2.1A(ii) and "AXELs Series B" means any such Loan or Loans,
collectively.
"AXEL Series B Commitment" means the commitment of a Lender to make an AXEL
Series B to Company pursuant to subsection 2.1A(ii), and "AXEL Series B
Commitments" means such commitments of all Lenders in the aggregate.
"AXEL Series B Exposure" means, with respect to any Lender as of any date
of determination (i) prior to the funding of the AXELs Series B, that Lender's
AXEL Series B Commitment and (ii) after the funding of the AXELs Series B, the
outstanding principal amount of the AXELs Series B of that Lender.
"AXEL Series B Notes" means any promissory notes of Company issued pursuant
to subsection 2.1E to evidence the AXELs Series B of any Lenders, substantially
in the form of Exhibit V annexed hereto, as they may be amended, supplemented or
otherwise modified from time to time.
----------
* AXEL is a registered service xxxx of Xxxxxxx, Xxxxx & Co.
5
"AXEL Series B Lender" means a Lender holding an outstanding AXEL Series B
or having an AXEL Series B Commitment, and "AXEL Series B Lenders" means any
such Lender or Lenders, collectively.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (x) the New York Prime Rate
or (y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate.
"Base Rate Loans" means the portion of a Loan bearing interest from time to
time at a rate determined by reference to the Base Rate as provided in
subsection 2.2A.
"Bromont Property" has the meaning assigned to that term in subsection
6.10B.
"Business Day" means (i) any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the Province of Ontario or the State
of New York or is a day on which banking institutions located in such province
or state are authorized or required by law or other governmental action to
close, and (ii) with respect to all notices, determinations, fundings and
payments in connection with the Adjusted Eurodollar Rate or any Eurodollar Rate
Loans, any day that is a Business Day described in clause (i) above and that is
also a day for trading by and between banks in Dollar deposits in the London
interbank market.
"Canadian Dollars" and the sign "Cdn.$" means the lawful money of Canada.
"Canadian Prime Rate" means, at any time, the greater of (i) the per annum
rate of interest quoted, published and commonly known as the "prime rate" of the
Administrative Agent at its main office in Toronto, Ontario as the reference
rate of interest in order to determine interest rates for loans in Canadian
Dollars to its Canadian borrowers, adjusted automatically with each quoted or
published change in such rate, all without the necessity of any notice to
Company or any other Person; and (ii) the sum of (y) the average (rounded
upwards if necessary, to the nearest 0.01%, with five-thousandths of 1% being
rounded up) of the rates per annum for Canadian Dollar bankers' acceptances
having a term of 30 days that appears on the Reuters Screen CDOR Page as of
10:00 a.m. (Toronto time) on the date of determination, as reported by
Administrative Agent (and if such screen is not available, any successor or
similar service as may be selected by Administrative Agent), and (z) 0.75% per
annum.
"Capital Lease", as applied to any Person, means any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of that
Person.
"Cash" means money, currency or a credit balance in a Deposit Account.
"Cash Equivalents" means at any date of determination, any of the following
so long as the same are not subject to any Lien: (i) bonds, debentures, notes
and other evidence of indebtedness issued, guaranteed or insured by the
government of Canada or any province, the United States of America or any state,
or the United Kingdom, and maturing not
6
more than 365 days after the relevant date; (ii) bonds, debentures, notes and
other evidences of indebtedness maturing not more than 265 days after the
relevant date and issued, guaranteed or insured by any Person rated A-1, P-1 or
R-1 low (or the then equivalent) or better by Standard & Poor's Ratings Group
("S&P"), Xxxxx'x Investors Service, Inc. ("Moody's") or Dominion Bond Rating
Service respectively; (iii) commercial paper maturing not more than 265 days
after the relevant date issued, guaranteed or insured by a Person at arm's
length to Company and its Subsidiaries and rated A-1, P-1 or R-1 low (or the
then equivalent) or better by S&P, Moody's or Dominion Bond Rating Service,
respectively; (iv) certificates of deposit or acceptances with a maturity of 265
days or less of any financial institution that is a bank under the Bank Act
(Canada) or that is a member of the Federal Reserve System of the United States
of America, having combined capital and surplus and undivided profits of not
less than $500,000,000 (or the Equivalent Cdn. $ Amount) and, as applicable,
rated at least "A-" by S&P or at least "A3" by Moody's, or at least "A++" by
Canadian Bond Rating Service; (v) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations issued or
directly, unconditionally and fully guaranteed by the Government of Canada or
the United States of America, or issued by any agency thereof (provided that the
full faith and credit of Canada or the United States, as the case may be, is
pledged in support thereof), in each case maturing within one year from the date
of acquisition (provided that the terms of such agreements comply with the
guidelines set forth in the Cash and Securities Loan Agreement under Regulation
2200 of the Investment Dealers Association of Canada or the Federal Financial
Agreements of Depository Institutions With Securities Dealers and Others, as
adopted by the Comptroller of the Currency on October 31, 1985, as applicable,
or the equivalents thereof from time to time); and (vi) in the case of any
Subsidiary of Company organized under the laws of any jurisdiction other than
the United States of America or any state, Canada or any province or the United
Kingdom, high quality, short-term liquid Investments accorded the highest rating
available by any applicable rating service and made by such Subsidiary in the
ordinary course of managing its surplus cash position in a manner consistent
with past practices.
"CIBC" has the meaning assigned to that term in the introduction to this
Agreement.
"CIBC Letter of Credit" means the standby letter of credit issued by CIBC
to National Westminster Bank on the Closing Date in a stated amount of
(pound)41,000,000.
"Class" means, as applied to Lenders, each of the following three classes
of Lenders: (i) Lenders having Tranche A Term Loan Exposure, (ii) Lenders having
Revolving Loan Exposure and (iii) Lenders having AXEL Series B Exposure.
"Closing Date" means the date on or before March 31, 1998, on which the
initial Loans are made.
"Collateral" means, collectively, all of the real, personal and mixed
property (including capital stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.
"Collateral Documents" means the Company Master Pledge Agreement, the
Company Security Agreement (U.S.), the Company Patent and Trademark Security
Agreement (U.S.), the Subsidiary Pledge Agreements (U.S.), the Subsidiary
Security Agreements (U.S.), the Subsidiary Patent and Trademark Security
Agreements (U.S.), the Mortgages, the U.K. Pledge Agreement, the U.K. Guarantee
and Debenture, the Copyright Security Agreements (U.S.) and all other
instruments or documents delivered by any Loan Party pursuant to this Agreement
or any of the other Loan Documents in order to grant to Administrative Agent, on
behalf of Lenders, a Lien on any real, personal or mixed property of that Loan
Party as security for the Obligations.
7
"Commercial Letter of Credit" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment mechanism in
connection with the purchase of any materials, goods or services by Company or
any of its Subsidiaries in the ordinary course of business of Company or such
Subsidiary.
"Commitments" means the commitments of Lenders to make Loans as set forth
in subsection 2.1A.
"Company" has the meaning assigned to such term in the introduction to this
Agreement.
"Company Certificate of Designations" means the provisions of Company's
Articles of Continuance, as amended through the Closing Date, relating to the
Company Preferred Stock, in the form delivered to Syndication Agent and
Administrative Agent prior to their execution of this Agreement and as such
provisions may be amended from time to time thereafter to the extent permitted
under subsection 7.15A.
"Company Master Pledge Agreement" means the Company Master Pledge Agreement
executed and delivered by Company on the Closing Date, substantially in the form
of Exhibit XVII annexed hereto.
"Company Preferred Stock" means Company's Cdn$2.00 Cumulative Redeemable
Convertible Preferred Shares 1983 R&D Series (Preferred Shares - R&D Series)
issued in accordance with, and subject to terms set forth in, the Company
Certificate of Designations.
"Company Security Agreement (U.S.)" means the Company Security Agreement
(U.S.) executed and delivered by Company on the Closing Date, substantially in
the form of Exhibit XXVIII annexed hereto.
"Company Patent and Trademark Security Agreement (U.S.)" means the Company
Patent and Trademark Security Agreement executed and delivered by Company on the
Closing Date, substantially in the form of Exhibit XVIII annexed hereto.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit VII annexed hereto delivered to Administrative Agent and Lenders by
Company pursuant to subsection 6.1(iv).
"Confidential Information Memorandum" means that certain Confidential
Information Memorandum relating to Company and the credit facilities to be
provided hereunder dated February, 1998.
"Conforming Leasehold Interest" means any Recorded Leasehold Interest as to
which the lessor has agreed in writing for the benefit of Administrative Agent
(which writing has been delivered to Administrative Agent), whether under the
terms of the applicable lease, under the terms of a Landlord Consent and
Estoppel, or otherwise, to the matters described in the definition of "Landlord
Consent and Estoppel," which interest, if a subleasehold or sub-subleasehold
interest, is not subject to any contrary restrictions contained in a superior
lease or sublease.
"Consolidated Adjusted EBITDA" means, for any period, the sum of the
8
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense, and (vi) other non-cash
items reducing Consolidated Net Income less other non-cash items increasing
Consolidated Net Income, all of the foregoing as determined on a consolidated
basis for Company and its Subsidiaries in conformity with GAAP.
"Consolidated Capital Expenditures" means, for any period, the aggregate of
all expenditures (whether paid in cash or other consideration or accrued as a
liability and including that portion of Capital Leases which is capitalized on
the consolidated balance sheet of Company and its Subsidiaries) by Company and
its Subsidiaries during that period that, in conformity with GAAP, are included
in "additions to property, plant or equipment" or comparable items reflected in
the consolidated statement of cash flows of Company and its Subsidiaries.
"Consolidated Cash Capital Expenditures" means, for any period,
Consolidated Capital Expenditures made in cash.
"Consolidated Cash Interest Expense" means, for any period, Consolidated
Interest Expense for such period excluding, however, any interest expense not
payable in Cash (including amortization of discount and amortization of debt
issuance costs).
"Consolidated Current Assets" means, as at any date of determination, the
total assets of Company and its Subsidiaries on a consolidated basis which may
properly be classified as current assets in conformity with GAAP, excluding Cash
and Cash Equivalents.
"Consolidated Current Liabilities" means, as at any date of determination,
the total liabilities of Company and its Subsidiaries on a consolidated basis
which may properly be classified as current liabilities in conformity with GAAP,
excluding the current portions of Funded Debt and Capital Leases.
"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated Adjusted EBITDA and (b) the Consolidated Working
Capital Adjustment minus (ii) the sum, without duplication, of the amounts for
such period of (a) voluntary and scheduled repayments of Consolidated Total Debt
(excluding repayments of Revolving Loans except to the extent the Revolving Loan
Commitments are permanently reduced in connection with such repayments), (b)
Consolidated Capital Expenditures (net of any proceeds of any related financings
with respect to such expenditures), (c) Consolidated Cash Interest Expense, (d)
cash dividends and other cash distributions on any shares of Company Preferred
Stock but only to the extent actually made and only to the extent such dividends
or other distributions are permitted pursuant to subsection 7.5 and (e) the
provision for current taxes based on income of Company and its Subsidiaries and
payable in cash with respect to such period.
"Consolidated Fixed Charges" means, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Cash Interest
Expense, (ii) provisions for cash taxes based on income, (iii) scheduled
principal payments of all Indebtedness, (iv) Consolidated Cash Capital
Expenditures and (v) dividend payments made pursuant to subsection 7.5, all of
the foregoing as determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP.
"Consolidated Interest Expense" means, for any period, total interest
9
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Company and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Company and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements, but excluding, however, any
amounts referred to in subsection 2.3 payable to Administrative Agent and
Lenders on or before the Closing Date.
"Consolidated Leverage Ratio" means, (i) as of the last day of the first
full Fiscal Quarter following the Closing Date, the ratio of (a) Consolidated
Total Debt as of such date to (b) Consolidated Adjusted EBITDA for the Fiscal
Quarter period ending on such date multiplied by four, (ii) as of the last day
of the first two full Fiscal Quarters following the Closing Date, the ratio of
(a) Consolidated Total Debt as of such date to (b) Consolidated Adjusted EBITDA
for the two-Fiscal Quarter period ending on such date multiplied by two, (iii)
as of the last day of the first three full Fiscal Quarters following the Closing
Date, the ratio of (a) Consolidated Total Debt as of such date to (b)
Consolidated Adjusted EBITDA for the three-Fiscal Quarter period ending on such
date multiplied by a fraction, the numerator of which is four and the
denominator of which is three, and (iv) as of the last day of any Fiscal Quarter
thereafter, the ratio of (a) Consolidated Total Debt as of such date to (b)
Consolidated Adjusted EBITDA for the four-Fiscal Quarter period ending on such
date.
"Consolidated Net Income" means, for any period, the net income (or loss)
of Company and its Subsidiaries on a consolidated basis for such period taken as
a single accounting period determined in conformity with GAAP; provided that
there shall be excluded (i) the income (or loss) of any Person (other than a
Subsidiary of Company) in which any other Person (other than Company or any of
its Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (ii) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Company or is merged
into or consolidated with Company or any of its Subsidiaries or that Person's
assets are acquired by Company or any of its Subsidiaries, (iii) the income of
any Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (iv) any after-tax gains or losses attributable
to Asset Sales or returned surplus assets of any Pension Plan, and (v) (to the
extent not included in clauses (i) through (iv) above) any net extraordinary
gains or net non-cash extraordinary losses.
"Consolidated Net Worth" means, as at any date of determination, the sum of
the capital stock and additional paid-in capital plus retained earnings (or
minus accumulated deficits) of Company and its Subsidiaries on a consolidated
basis determined in conformity with GAAP.
"Consolidated Rental Payments" means, for any period, the aggregate amount
of all rents paid or payable by Company and its Subsidiaries on a consolidated
basis during that period under all Operating Leases to which Company or any of
its Subsidiaries is a party as lessee (net of sublease income).
"Consolidated Total Debt" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries,
10
determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital" means, as at any date of determination, the
excess of Consolidated Current Assets over Consolidated Current Liabilities.
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"Contingent Obligation", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under Hedge Agreements. Contingent Obligations shall include (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to make
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, and (c) any liability of such Person for
the obligation of another through any agreement (contingent or otherwise) (X) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (Y) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (X) or (Y) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"Contractual Obligation", as applied to any Person, means any provision of
any Security issued by that Person or of any material indenture, mortgage, deed
of trust, contract, undertaking, agreement or other instrument to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.
"Copyright Security Agreement (U.S.)" means each Copyright Security
Agreement (U.S.) executed and delivered by Company and an existing Subsidiary
Guarantor on the Closing Date or executed and delivered by any additional
Subsidiary Guarantor from time to time thereafter in accordance with subsection
6.8, in each case substantially in the form of Exhibit XXIX annexed hereto, and
"Copyright Security Agreements (U.S.)" means all such Copyright Security
Agreements (U.S.), collectively.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement to which Company or any of its Subsidiaries is a party.
"Deposit Account" means a demand, time, savings, passbook or like account
11
with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.
"Discounted Note Documents" means the Discounted Notes, Discounted Note
Terms and Conditions and any other documents or instruments executed in
connection therewith.
"Discounted Notes" means those certain Discounted Notes issued on the
Closing Date by Mitel Telecom to Mitel Barbados pursuant to those certain
Discounted Note Terms and Conditions, as such notes may be amended, supplemented
or otherwise modified from time to time in accordance with subsection 7.15A.
"Discounted Note Terms and Conditions" means those certain Terms and
Conditions for a Discounted Note Program established by Mitel Telecom and as in
effect on the Closing Date, as such terms and conditions may be amended,
supplemented or otherwise modified from time to time in accordance with
subsection 7.15A.
"Dollars" and the sign "$" mean the lawful money of the United States of
America.
"Eligible Assets" has the meaning assigned to that term in subsection
2.4B(iii)(a).
"Eligible Assignee" means (1)(A) with respect to the AXELs Series B and the
AXEL Series B Commitments, (i) a commercial bank organized under the laws of the
United States or any state thereof; (ii) a savings and loan association or
savings bank organized under the laws of the United States or any state thereof;
(iii) a commercial bank organized under the laws of any other country or a
political subdivision thereof; provided that (x) such bank is acting through a
branch or agency located in the United States or (y) such bank is organized
under the laws of a country that is a member of the Organization for Economic
Cooperation and Development or a political subdivision of such country; and (iv)
any other entity which is an "accredited investor" (as defined in Regulation D
under the Securities Act) which extends credit or buys loans as one of its
businesses including, but not limited to, insurance companies, mutual funds and
lease financing companies; and (B) any Lender and any Affiliate of any Lender
and (2)(A) with respect to the Tranche A Term Loans, the Tranche A Term Loan
Commitments, the Revolving Loans and the Revolving Loan Commitments, (i) any
commercial bank, financial institution or other accredited investor resident in
Canada for tax purposes, and (ii) any Lender and any Affiliate of any Lender in
each case which is organized under the laws of Canada or a province thereof;
provided that no Affiliate of Company shall be an Eligible Assignee; provided
further that no "non-resident" of Canada within the meaning of the Income Tax
Act (Canada) shall be an Eligible Assignee with respect to the Tranche A Term
Loans, the Tranche A Term Loan Commitments, the Revolving Loans and the
Revolving Loan Commitments.
"Employee Benefit Plan" means any U.S. Employee Benefit Plan or any Foreign
Employee Benefit Plan.
"Environmental Claim" means any investigation, notice, notice of violation,
claim, action, suit, proceeding, demand, abatement order or other order or
directive (conditional or otherwise), by any governmental authority or any other
Person, arising (i)
12
pursuant to or in connection with any actual or alleged violation of, or
liability under, any Environmental Law, (ii) in connection with any Hazardous
Materials or any actual or alleged Hazardous Materials Activity, or (iii) in
connection with any actual or alleged damage, injury, threat or harm to health,
safety, natural resources or the environment.
"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of governmental
authorities or common law relating to (i) environmental matters, including those
relating to any Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, ecosystems or water including ground water in any
manner applicable to Company or any of its Subsidiaries or any Facility, each as
amended or supplemented, any analogous present or future national, regional,
European Union, state, provincial, municipal or local statutes or laws, and any
regulations promulgated pursuant to any of the foregoing.
"Equivalent Cdn. $ Amount" means, at any relevant time, on any day and with
respect to any amount of Dollars, the amount of Canadian Dollars which would be
required to buy such amount of Dollars at the Bank of Canada noon rate at such
time (as quoted or published from time to time by the Bank of Canada).
"Equivalent U.S. $ Amount" means, on any day with respect to any amount of
Canadian Dollars, the amount of Dollars which would be required to buy such
amount of Canadian Dollars using the noon rate quoted by the Bank of Canada on
that day.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Company or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Company or
such Subsidiary within the meaning of this definition with respect to the period
such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such period for which Company or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning of Section
4043 of ERISA and the regulations issued thereunder with respect to any Pension
Plan (excluding those for which the provision for 30-day notice to the PBGC has
been waived by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any Pension
Plan (whether or not waived in accordance with Section 412(d) of the Internal
Revenue Code) or the failure to make by its due date a required installment
under Section 412(m) of the Internal Revenue Code with respect to any Pension
Plan or the failure to make any required contribution to a Multiemployer Plan;
(iii)
13
the provision by the administrator of any Pension Plan pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the withdrawal by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability pursuant to Section 4063 or 4064
of ERISA; (v) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which might constitute
grounds under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on Company, any
of its Subsidiaries or any of their respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA; (vii) the withdrawal of Company, any of its Subsidiaries or
any of their respective ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer
Plan if there is any potential liability therefor, or the receipt by Company,
any of its Subsidiaries or any of their respective ERISA Affiliates of notice
from any Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act
or omission which could give rise to the imposition on Company, any of its
Subsidiaries or any of their respective ERISA Affiliates of a material amount of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071
of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a
material claim (other than routine claims for benefits) against any Employee
Benefit Plan other than a Multiemployer Plan or the assets thereof, or against
Company, any of its Subsidiaries or any of their respective ERISA Affiliates in
connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue
Service of notice of the failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or
the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code; or
(xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Rate Loans" means the portion of a Loan bearing interest from
time to time at a rate determined by reference to the Adjusted Eurodollar Rate
as provided in subsection 2.2A.
"Eurodollar Rate Reserve Percentage" means, for any Interest Period for all
Eurodollar Rate Loans comprising part of the same borrowing, the reserve
percentage applicable two Business Days before the first day of such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined) having a term equal to such Interest
Period.
14
"Event of Default" means each of the events set forth in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.
"Exchange Rate" means, on any date when an amount expressed in a currency
other than Dollars is to be determined with respect to any Letter of Credit, the
nominal rate of exchange of the applicable Issuing Lender in the New York
foreign exchange market for the purchase by such Issuing Lender (by cable
transfer) of such currency in exchange for Dollars at 12:00 noon (Toronto time)
one Business Day prior to such date, expressed as a number of units of such
currency per one Dollar.
"Existing Credit Agreements" means (i) the Revolving Demand Credit
(Operating Line) provided by CIBC to Company for general purposes in the
aggregate amount of Cdn.$10 million, (ii) the Letter Loan Agreement dated
February 22, 1994 among the Company and NBD Bank providing a general operating
line of credit in the aggregate amount of US$10 million, and (iii) that certain
(a) bank overdraft facility of approximately (pound)35,000,000, (b) that certain
BACS facility of not more than (pound)6,000,000 and (c) that certain foreign
exchange line, in each case provided by National Westminster Bank to PSL and as
amended prior to the Closing Date.
"Existing Letters of Credit" means the letters of credit issued by CIBC
prior to the Closing Date pursuant to that certain Cdn.$15,000,000 Revolving
Demand Credit for Letters of Credit and Guarantees, which letters of credit are
listed on Schedule 1.1A annexed hereto and will, as of the Closing Date, be
deemed outstanding as Letters of Credit issued pursuant to subsection 3.1A and
3.7 of this Agreement.
"Facilities" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Company or any of its Subsidiaries or any of
their respective predecessors or Affiliates.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"Financial Plan" has the meaning assigned to that term in subsection
6.1(xiii).
"First Priority" means, with respect to any Lien purported to be created in
any Collateral pursuant to any Collateral Document, that (i) such Lien has
priority over any other Lien on such Collateral (other than Permitted
Encumbrances) and (ii) such Lien is the only Lien (other than Permitted
Encumbrances and Liens permitted pursuant to subsection 7.2) to which such
Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
15
"Fiscal Year" means the fiscal year of Company and its Subsidiaries ending
on the last Friday in March of each calendar year. For purposes of this
Agreement, any particular Fiscal Year shall be designated by reference to the
calendar year in which such Fiscal Year ends.
"Flood Hazard Property" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.
"Foreign Employee Benefit Plan" means any employee benefit plan, agreement,
scheme or arrangement (other than a U.S. Employee Benefit Plan) which is or was
maintained or contributed to by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates for the benefit of any employee or former employee
(or any of their dependents) who is not a citizen or resident of the United
States, including, without limitation, any pension, retirement savings, deferred
compensation, share option or profit sharing scheme (including without
limitation any registered retirement savings plan, deferred profit sharing plan,
or registered pension plan maintained contractually or pursuant to any provision
of the Income Tax Act of Canada or legislation of Canada or any Province thereof
governing any such plan), any health or welfare plan, or any plan, agreement,
scheme or arrangement relating to life, medical or similar benefits (whether
provided through the purchase of insurance or otherwise).
"Foreign Benefit Plan Event" means the occurrence of an event, act or
omission or the existence of facts or circumstances with respect to a Foreign
Employee Benefit Plan resulting in (i) the failure to comply in any material
respect with the terms of any Foreign Employee Benefit Plan or relevant
applicable law, (ii) the failure timely to make all required contributions, and
to pay all required taxes or expenses, to or with respect to any Foreign
Employee Benefit Plan in any material amount, (iii) the acceleration of any
funding requirements with respect to any Foreign Employee Benefit Plan in any
material amount, (iv) the imposition of judgments, damages, awards, liens,
fines, penalties, taxes or similar or related charges on any Loan Party or any
of its Subsidiaries with respect to a Foreign Employee Benefit Plan in any
material amount, or (v) the loss of qualification for beneficial tax treatment
under applicable relevant laws for any Foreign Employee Benefit Plan designed or
intended to qualify for such beneficial tax treatment.
"Foreign Pension Plan" means any Foreign Employee Benefit Plan that
provides, or is designed to provide, pensions, retirement income, retirement
savings or deferred compensation for the benefit of any employee or former
employee or any of their dependents.
"Funded Debt", as applied to any Person, means all Indebtedness of that
Person (including any current portions thereof) which by its terms or by the
terms of any instrument or agreement relating thereto matures more than one year
from, or is directly renewable or extendable at the option of that Person to a
date more than one year from (including an option of that Person under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit over a period of one year or more from), the date of the creation
thereof.
"Funding and Payment Office" means (i) the office of Administrative Agent
and Swing Line Lender located at Main Branch Commerce Court, 7th Floor, Toronto,
16
Ontario or (ii) such other office of Administrative Agent and Swing Line Lender
as may from time to time hereafter be designated as such in a written notice
delivered by Administrative Agent to Company and each Lender.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, at any time, subject to the limitations on the application
thereof set forth in subsection 1.2, accounting principles generally accepted in
Canada as recommended in the Handbook of the Canadian Institute of Chartered
Accountants at the relevant time applied on a consistent basis (except for
changes made with the prior written consent of the Administrative Agent and
approved by Company's independent auditors in accordance with promulgations of
the Canadian Institute of Chartered Accountants).
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any multi-national,
national, regional, federal, provincial, European Union, state, municipal or
local governmental authority, agency or court.
"Guaranties" means, collectively, the U.K. Guarantee and Debenture and the
Subsidiary Guaranties.
"Hazardous Materials" means (i) any chemical, material or substance at any
time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste", "acutely
hazardous waste", "radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous waste", "infectious waste",
"toxic substances", or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) any asbestos-containing
materials; (vii) urea formaldehyde foam insulation; (viii) electrical equipment
which contains any oil or dielectric fluid containing polychlorinated biphenyls;
(ix) pesticides; and (x) any other chemical, material or substance, exposure to
which is prohibited, limited or regulated by any governmental authority or which
may or could pose a hazard to the health and safety of the owners, occupants or
any Persons in the vicinity of any Facility or to the indoor or outdoor
environment.
"Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a Currency Agreement
designed to hedge against fluctuations in interest rates or currency values,
17
respectively.
"Immaterial Subsidiary" means any Subsidiary of Company which is not a
Subsidiary Guarantor, or is not required to become a Subsidiary Guarantor
pursuant to subsection 6.8.
"Indebtedness", as applied to any Person, means (i) all indebtedness for
borrowed money, (ii) that portion of obligations with respect to Capital Leases
that is properly classified as a liability on a balance sheet in conformity with
GAAP, (iii) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money, (iv) any obligation
owed for all or any part of the deferred purchase price of property or services
(excluding any such obligations incurred under ERISA), which purchase price is
(a) due more than six months from the date of incurrence of the obligation in
respect thereof or (b) evidenced by a note or similar written instrument, and
(v) all indebtedness secured by any Lien on any property or asset owned or held
by that Person regardless of whether the indebtedness secured thereby shall have
been assumed by that Person or is nonrecourse to the credit of that Person.
Obligations under Interest Rate Agreements and Currency Agreements constitute
(X) in the case of Hedge Agreements, Contingent Obligations, and (Y) in all
other cases, Investments, and in neither case constitute Indebtedness.
"Indemnitee" has the meaning assigned to that term in subsection 10.3.
"Initial Period" means the period commencing on and including the Closing
Date and ending on (but excluding) the earlier of (i) the date on which
Syndication Agent notifies Company that it has concluded its primary syndication
of the Loans and Commitments and (ii) the date which is 60 days after the
Closing Date.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of Company and its Subsidiaries as currently conducted
that are material to the condition (financial or otherwise), business or
operations of Company and its Subsidiaries, taken as a whole.
"Intercompany Note" has the meaning assigned to that term in subsection 7.1
and includes the Discounted Notes and any notes issued pursuant to the
IntraGroup Loan Agreement.
"Interest Payment Date" means (i) with respect to any Base Rate Loan or
Swing Line Loan, the first calendar day of each month of each year, commencing
on the first such date to occur after the Closing Date, and (ii) with respect to
any Eurodollar Rate Loan, the last day of each Interest Period applicable to
such Loan; provided that in the case of each Interest Period of six months,
"Interest Payment Date" shall also include the date that is three months after
the commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in subsection 2.2B.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar agreement or
arrangement to which Company or any of its Subsidiaries is a party.
18
"Interest Rate Determination Date" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
to the date hereof and from time to time hereafter, and any successor statute.
"IntraGroup Loan Agreement" means the IntraGroup Loan Agreement dated as of
the Closing Date between Mitel Telecom and Company relating to intercompany
loans among the foregoing entities, as such agreement may be amended,
supplemented or otherwise modified from time to time to add additional
Subsidiaries as parties thereto pursuant to subsection 6.8A and otherwise in
accordance with subsection 7.15A.
"Inventory" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which are then
held by such Person for sale or lease, including raw materials and work in
process.
"Investment" means (i) any direct or indirect purchase or other acquisition
by Company or any of its Subsidiaries of, or of a beneficial interest in, any
Securities of any other Person (including any Subsidiary of Company), (ii) any
direct or indirect redemption, retirement, purchase or other acquisition for
value, by any Subsidiary of Company from any Person other than Company or any of
its Subsidiaries, of any equity Securities of such Subsidiary, (iii) any direct
or indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by Company or any of
its Subsidiaries to any other Person, including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business, or (iv)
Interest Rate Agreements or Currency Agreements not constituting Hedge
Agreements. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"IP Collateral" means, collectively, the Collateral under the Company
Patent and Trademark Security Agreement (U.S.), the Subsidiary Patent and
Trademark Security Agreements (U.S.), the Copyright Security Agreement (U.S.)
and any similar Collateral under any of the other Collateral Documents.
"Issuing Lender" means, with respect to any Letter of Credit (including any
Existing Letter of Credit), the Lender which agrees or is otherwise obligated to
issue such Letter of Credit, determined as provided in subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership, limited liability company or
other legal form; provided that in no event shall any corporate Subsidiary of
any Person be considered to be a Joint Venture to which such Person is a party.
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property (other than any Leasehold Property located in the United Kingdom), a
letter, certificate or other instrument in writing from the lessor under the
related lease, satisfactory in form and substance to Administrative Agent,
pursuant to which such lessor agrees, for the benefit of Administrative Agent,
(i) that without any further consent of such lessor or any further action on the
part of the Loan Party holding such Leasehold Property, such Leasehold
19
Property may be encumbered pursuant to a Mortgage and may be assigned to the
purchaser at a foreclosure sale or in a transfer in lieu of such a sale (and to
a subsequent third party assignee if Administrative Agent, any Lender, or an
Affiliate of either so acquires such Leasehold Property), (ii) that such lessor
shall not terminate such lease as a result of a default by such Loan Party
thereunder without first giving Administrative Agent notice of such default and
at least 30 days (or, if such default cannot reasonably be cured by
Administrative Agent within such period, such longer period as may reasonably be
required) to cure such default, (iii) to the matters contained in a collateral
access agreement in a form and substance reasonably satisfactory to
Administrative Agent, and (iv) to such other matters relating to such Leasehold
Property as Administrative Agent may reasonably request.
"Leasehold Property" means any leasehold interest of any Loan Party as
lessee under any lease of real property, other than any such leasehold interest
designated from time to time by Administrative Agent in its sole discretion as
not being required to be included in the Collateral.
"Lender" and "Lenders" means the persons identified as "Lenders" and listed
on the signature pages of this Agreement, together with their successors and
permitted assigns pursuant to subsection 10.1; provided that the term "Lenders",
when used in the context of a particular Commitment, shall mean Lenders having
that Commitment.
"Lender Counterparties" means, collectively, the Lenders party from time to
time to any Hedge Agreement with Company.
"Lender Hedge Agreements" means, collectively, the Hedge Agreements entered
into from time to time by Company and one or more Lenders.
"Letter of Credit" or "Letters of Credit" means Commercial Letters of
Credit and Standby Letters of Credit issued or to be issued by Issuing Lenders
for the account of Company pursuant to subsection 3.1, including the Existing
Letters of Credit.
"Letter of Credit Usage" means, as at any date of determination, the sum of
(i) the maximum aggregate amount which is or at any time thereafter may become
available for drawing under all Letters of Credit then outstanding plus (ii) the
aggregate amount of all drawings under Letters of Credit honored by Issuing
Lenders and not theretofore reimbursed by Company (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to subsection
3.3B). For purposes of this definition, any amount described in clause (i) or
(ii) of the preceding sentence which is denominated in a currency other than
Dollars shall be valued based on the applicable Exchange Rate for such currency
as of the applicable date of determination.
"Lien" means any lien, mortgage, pledge, assignment, security interest,
hypothec charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Loan" or "Loans" means one or more of the Tranche A Term Loans, AXELs
Series B, Revolving Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of Credit
20
(and any applications for, or reimbursement agreements or other documents or
certificates executed by Company in favor of an Issuing Lender relating to, the
Letters of Credit), the Guaranties and the Collateral Documents.
"Loan Party" means each of Company and any of Company's Subsidiaries from
time to time executing a Loan Document, and "Loan Parties" means all such
Persons, collectively; provided that, for purposes of Section 5 hereof, "Loan
Party" and "Loan Parties" shall include the U.K. Plessey Entities.
"Margin Stock" has the meaning assigned to that term in Regulation U of the
Board of Governors of the Federal Reserve System as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company and its Subsidiaries taken as a whole, or (ii) the
impairment of the ability of any Loan Party to perform, or of Administrative
Agent or Lenders to enforce, the Obligations.
"Material Contract" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Loan Documents)
for which breach, nonperformance, cancellation or failure to renew could have a
Material Adverse Effect.
"Material Leasehold Property" means a Leasehold Property reasonably
determined by Administrative Agent to be of material value as Collateral or of
material importance to the operations of Company or any of its Subsidiaries;
provided, however, that, excepting any such Leasehold Properties set forth on
Schedule 4.1H annexed hereto, no Leasehold Property with respect to which the
aggregate amount of all rents payable during any one Fiscal Year does not exceed
$1,000,000 (or its equivalent in any other currency) shall be a "Material
Leasehold Property".
"Material Subsidiary" means Mitel Telecom, Mitel AB, Mitel, Inc., PSL and
any other Subsidiary of Company which, together with its consolidated
Subsidiaries, has (i) revenues which represent more than 10% of the revenues of
Company and its Subsidiaries on a consolidated basis, or (ii) assets which
represent more than 10% of the assets of the Company and its Subsidiaries on a
consolidated basis; provided, however, that "Material Subsidiary" shall not
include Mitel Barbados to the extent that the representation of Company
contained in subsection 5.20 is true and correct.
"MEDL" means Marconi Electronic Devices Limited, a company incorporated
under the laws of England and Wales.
"Mitel AB" means Mitel Semiconductors AB, a corporation organized under the
laws of Sweden.
"Mitel Barbados" means Mitel (Barbados) Ltd., a corporation organized under
the laws of Barbados.
"Mitel Telecom" means Mitel Telecom Limited, a company incorporated under
the laws of England and Wales.
"Mortgage" means (i) a security instrument (whether designated as a deed of
21
trust or a mortgage or by any similar title) executed and delivered by any Loan
Party, substantially in the form of Exhibit XXIII annexed hereto or in such
other form as may be approved by Administrative Agent in its sole discretion, in
each case with such changes thereto as may be recommended by Administrative
Agent's local counsel based on local laws or customary local mortgage or deed of
trust practices, or (ii) at Administrative Agent's option, in the case of an
Additional Mortgaged Property (as defined in subsection 6.9), an amendment to an
existing Mortgage, in form satisfactory to Administrative Agent, adding such
Additional Mortgaged Property to the Real Property Assets encumbered by such
existing Mortgage, in either case as such security instrument or amendment may
be amended, supplemented or otherwise modified from time to time. "Mortgages"
means all such instruments, including the Closing Date Mortgages (as defined in
subsection 4.1H) and any Additional Mortgages (as defined in subsection 6.9),
collectively.
"Mortgaged Property" means a Closing Date Mortgaged Property (as defined in
subsection 4.1H) or an Additional Mortgaged Property (as defined in subsection
6.9).
"Multiemployer Plan" means any U.S. Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset Sale
(ii) value added taxes imposed by applicable law and (iii) payment of the
outstanding principal amount of, premium or penalty, if any, and interest on any
Indebtedness (other than the Loans) that is secured by a Lien on the stock or
assets in question and that is required to be repaid under the terms thereof as
a result of such Asset Sale.
"Net Insurance/Condemnation Proceeds" means any Cash payments or proceeds
received by Company or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Company or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Company or such Subsidiary in respect thereof.
"New York Prime Rate" means the rate that CIBC announces from time to time
as its prime lending rate for Loans in Dollars to United States borrowers, as in
effect from time to time. The New York Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate actually charged to any
customer. CIBC or any other Lender may make commercial loans or other loans at
rates of interest at, above or below the New York Prime Rate.
"Notes" means one or more of the Tranche A Term Notes, AXEL Series B Notes,
Revolving Notes or any combination thereof.
22
"Notice of Borrowing" means a notice substantially in the form of Exhibit I
annexed hereto delivered by Company to Administrative Agent pursuant to
subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially in the
form of Exhibit II annexed hereto delivered by Company to Administrative Agent
pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"Obligations" means all obligations of every nature of each Loan Party from
time to time owed to Agents, Lenders or any of them under the Loan Documents,
whether for principal, interest, reimbursement of amounts drawn under Letters of
Credit, fees, expenses, indemnification or otherwise.
"Officers' Certificate" means, as applied to any corporation, a certificate
executed on behalf of such corporation by its chairman of the board (if an
officer) or its president or one of its vice presidents and by its chief
financial officer or its treasurer; provided that every Officers' Certificate
with respect to the compliance with a condition precedent to the making of any
Loans hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition and any
definitions or other provisions contained in this Agreement relating thereto,
(ii) a statement that, in the opinion of the signers, they have made or have
caused to be made such examination or investigation as is necessary to enable
them to express an informed opinion as to whether or not such condition has been
complied with, and (iii) a statement as to whether, in the opinion of the
signers, such condition has been complied with.
"Operating Lease" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) that is not a Capital Lease other than any
such lease under which that Person is the lessor.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Pension Plan" means any U.S. Pension Plan or any Foreign Pension Plan.
"Permitted Acquisition" means, from and after the Closing Date, any
acquisition by Company or any of its Subsidiaries of an equity interest in, or
all or substantially all of the assets of, or any smaller portion that
constitutes an operating unit, business unit, technology unit or division of,
any Person as permitted pursuant to subsection 7.7(v).
"Permitted Encumbrances" means the following types of Liens (excluding any
such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA, any such Lien relating to or imposed in connection
with any Environmental Claim, and any such Lien expressly prohibited by any
applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or claims the
payment of which is not, at the time, required by subsection 6.3;
23
(ii) statutory Liens of landlords, statutory Liens of banks and rights
of set-off, statutory Liens of carriers, warehousemen, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law, in each
case incurred in the ordinary course of business (a) for amounts not yet
overdue or (b) for amounts that are overdue and that (in the case of any
such amounts overdue for a period in excess of 5 days) are being contested
in good faith by appropriate proceedings, so long as (1) such reserves or
other appropriate provisions, if any, as shall be required by GAAP shall
have been made for any such contested amounts, and (2) in the case of a
Lien with respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money), so long as no foreclosure, sale or similar
proceedings have been commenced with respect to any portion of the
Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event of
Default under subsection 8.8;
(v) leases or subleases granted to third parties in accordance with
any applicable terms of the Collateral Documents and not interfering in any
material respect with the ordinary conduct of the business of Company or
any of its Subsidiaries or resulting in a material diminution in the value
of any Collateral as security for the Obligations;
(vi) easements, rights-of-way, restrictions, encroachments, and other
minor defects or irregularities in title, in each case which do not and
will not interfere in any material respect with the ordinary conduct of the
business of Company or any of its Subsidiaries or result in a material
diminution in the value of any Collateral as security for the Obligations;
(vii) any (a) interest or title of a lessor or sublessor under any
lease permitted by subsection 7.9, (b) restriction or encumbrance that the
interest or title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under such lease
to any restriction or encumbrance referred to in the preceding clause (b),
so long as the holder of such restriction or encumbrance agrees to
recognize the rights of such lessee or sublessee under such lease;
(viii) Liens arising from filing UCC financing statements relating
solely to leases permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(x) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
24
(xi) Liens against owners' or sublessors' interest in any Leasehold
Property;
(xii) Liens securing obligations (other than obligations representing
Indebtedness for borrowed money) under operating, reciprocal easement or
similar agreements entered into in the ordinary course of business of
Company and its Subsidiaries; and
(xiii) licenses of patents, trademarks and other intellectual property
rights granted by Company or any of its Subsidiaries in the ordinary course
of business and not interfering in any material respect with the ordinary
conduct of the business of Company or such Subsidiary.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"Pledged Collateral" means, collectively, the "Pledged Collateral" as
defined in the Company Master Pledge Agreement and the Subsidiary Pledge
Agreements (U.S.) and any other share certificates, promissory notes or under
instruments pledged to Administrative Agent pursuant to the Collateral
Documents.
"Plessey Entities" means, collectively, each of PSL, MEDL, AEI
Semiconductors Limited and GEC Plessey Semiconductors Inc. (to be renamed Mitel
Semiconductor Americas Inc. as of the Closing Date) which companies and their
respective Subsidiaries are to be acquired by Company from Seller pursuant to
the Acquisition Agreement.
"Potential Event of Default" means a condition or event that, after notice
or lapse of time or both, would constitute an Event of Default.
"Pro Rata Share" means (i) with respect to all payments, computations and
other matters relating to the Tranche A Term Loan Commitments or the Tranche A
Term Loan of any Lender, the percentage obtained by dividing (x) the Tranche A
Term Loan Exposure of that Lender by (y) the aggregate Tranche A Term Loan
Exposure of all Lenders, (ii) with respect to all payments, computations and
other matters relating to the AXEL Series B Commitments or the AXEL Series B of
any Lender, the percentage obtained by dividing (x) the AXEL Series B Exposure
of that Lender by (y) the aggregate AXEL Series B Exposure of all Lenders, (iii)
with respect to all payments, computations and other matters relating to the
Revolving Loan Commitment or the Revolving Loans of any Lender or any Letters of
Credit issued or participations therein purchased by any Lender or any
participations in any Swing Line Loans purchased by any Lender, the percentage
obtained by dividing (x) the Revolving Loan Exposure of that Lender by (y) the
aggregate Revolving Loan Exposure of all Lenders, and (iv) for all other
purposes with respect to each Lender, the percentage obtained by dividing (x)
the sum of the Tranche A Term Loan Exposure of that Lender plus the AXEL Series
B Exposure of that Lender plus the Revolving Loan Exposure of that Lender by (y)
the sum of the aggregate Tranche A Term Loan Exposure of all Lenders plus the
aggregate AXEL Series B Exposure of all Lenders plus the aggregate Revolving
Loan Exposure of all Lenders, in any such case as the applicable percentage may
be adjusted
25
by assignments permitted pursuant to subsection 10.1. The initial Pro Rata Share
of each Lender for purposes of each of clauses (i), (ii), (iii) and (iv) of the
preceding sentence is set forth opposite the name of that Lender in Schedule 2.1
annexed hereto.
"PSL" means Plessey Semiconductors Limited, a company incorporated under
the laws of England and Wales.
"PTO" means the United States Patent and Trademark Office or any successor
or substitute office in which filings are necessary or, in the opinion of
Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.
"Recorded Leasehold Interest" means a Leasehold Property with respect to
which a Record Document (as hereinafter defined) has been recorded in all places
necessary or desirable, in Administrative Agent's reasonable judgment, to give
constructive notice of such Leasehold Property to third-party purchasers and
encumbrancers of the affected real property. For purposes of this definition,
the term "Record Document" means, with respect to any Leasehold Property, (a)
the lease evidencing such Leasehold Property or a memorandum thereof, executed
and acknowledged by the owner of the affected real property, as lessor, or (b)
if such Leasehold Property was acquired or subleased from the holder of a
Recorded Leasehold Interest, the applicable assignment or sublease document,
executed and acknowledged by such holder, in each case in form sufficient to
give such constructive notice upon recordation and otherwise in form reasonably
satisfactory to Administrative Agent.
"Real Property Asset" means, at any time of determination, any interest
then owned by any Loan Party in any real property.
"Register" has the meaning assigned to that term in subsection 2.1D.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in subsection
3.3B.
"Refunded Swing Line Loans" has the meaning assigned to that term in
subsection 2.1A(iv).
"Related Agreements" means, collectively, the Acquisition Agreement, the
IntraGroup Loan Agreement and the Discounted Note Documents.
"Release" means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of Hazardous Materials into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Materials), including the movement
of any Hazardous Materials through the air, soil, surface water or groundwater.
"Request for Issuance of Letter of Credit" means a notice substantially in
the form of Exhibit III annexed hereto delivered by Company to Administrative
Agent pursuant to subsection 3.1B(i) with respect to the proposed issuance of a
Letter of Credit.
26
"Requisite Class Lenders" means, at any time of determination (i) for the
Class of Lenders having Tranche A Term Loan Exposure, Lenders having or holding
at least 51% of the aggregate Tranche A Term Loan Exposure of all Lenders, (ii)
for the Class of Lenders having Revolving Loan Exposure, Lenders having or
holding at least 51% of the aggregate Revolving Loan Exposure of all Lenders and
(iii) for the Class of Lenders having AXEL Series B Exposure, Lenders having or
holding at least 51% of the aggregate AXEL Series B Exposure of all Lenders.
"Requisite Lenders" means Lenders having or holding at least 51% of the sum
of the aggregate Tranche A Term Loan Exposure of all Lenders plus the aggregate
AXEL Series B Exposure of all Lenders plus the aggregate Revolving Loan Exposure
of all Lenders; provided, however, that during the period commencing on the
Closing Date and continuing until such time as GSCP and Xxxxxxx Xxxxx Canada
Credit Partners Co., collectively hold less than 51% of the sum of the aggregate
Tranche A Term Loan Exposure of all Lenders plus the aggregate AXEL Series B
Exposure of all Lenders plus the aggregate Revolving Loan Exposure of all
Lenders, "Requisite Lenders" shall mean all Lenders.
"Restricted Junior Payment" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of Company
now or hereafter outstanding, except a dividend payable solely in shares of that
class of stock to the holders of that class, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any shares of any class of stock of Company now or hereafter
outstanding, (iii) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire shares of any class
of stock of Company now or hereafter outstanding, and (iv) any payment or
prepayment of principal of, premium, if any, or interest on, or redemption,
purchase, retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment with respect to, any Subordinated Indebtedness.
"Revolving Loan Commitment" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(iii), and "Revolving Loan
Commitments" means such commitments of all Lenders in the aggregate.
"Revolving Loan Commitment Termination Date" means February 12, 2003.
"Revolving Loan Exposure" means, with respect to any Lender as of any date
of determination (i) prior to the termination of the Revolving Loan Commitments,
that Lender's Revolving Loan Commitment and (ii) after the termination of the
Revolving Loan Commitments, the sum of (a) the aggregate outstanding principal
amount of the Revolving Loans of that Lender plus (b) in the event that Lender
is an Issuing Lender, the aggregate Letter of Credit Usage in respect of all
Letters of Credit issued by that Lender (in each case net of any participations
purchased by other Lenders in such Letters of Credit or any unreimbursed
drawings thereunder) plus (c) the aggregate amount of all participations
purchased by that Lender in any outstanding Letters of Credit or any
unreimbursed drawings under any Letters of Credit plus (d) in the case of Swing
Line Lender, the aggregate outstanding principal amount of all Swing Line Loans
(net of any participations therein purchased by other Lenders) plus (e) the
aggregate amount of all participations purchased by that Lender in any
outstanding Swing Line Loans.
"Revolving Loans" means the Loans made by Lenders to Company pursuant
27
to subsection 2.1A(iii).
"Revolving Notes" means any promissory notes of Company issued pursuant to
subsection 2.1E to evidence the Revolving Loans of any Lenders, substantially in
the form of Exhibit VI annexed hereto, as they may be amended, supplemented or
otherwise modified from time to time.
"Securities" means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as "securities" or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and any successor statute.
"Seller" means The General Electric Company, P.L.C., a company organized
under the laws of England and Wales.
"Solvent" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"Standby Letter of Credit" means any standby letter of credit or similar
instrument issued for the purpose of supporting (i) Indebtedness of Company or
any of its Subsidiaries in respect of industrial revenue or development bonds or
financings, (ii) workers' compensation liabilities of Company or any of its
Subsidiaries, (iii) the obligations of third party insurers of Company or any of
its Subsidiaries arising by virtue of the laws of any jurisdiction requiring
third party insurers, (iv) obligations with respect to Capital Leases or
Operating Leases of Company or any of its Subsidiaries, and (v) performance,
payment, deposit or surety obligations of Company or any of its Subsidiaries, in
any case if required by law or governmental rule or regulation or in accordance
with custom and practice in the industry; provided that Standby Letters of
Credit may not be issued for the purpose of supporting (a) trade payables or (b)
any Indebtedness constituting "antecedent debt" (as that term is used in Section
547 of the Bankruptcy Code).
"Subordinated Indebtedness" means any Indebtedness of Company subordinated
in right of payment to the Obligations pursuant to documentation containing
28
maturities, amortization schedules, covenants, defaults, remedies, subordination
provisions and other material terms in form and substance satisfactory to
Administrative Agent and Requisite Lenders.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"Subsidiary Guarantor" means any Subsidiary of Company that executes and
delivers a counterpart to any Guaranty on the Closing Date or from time to time
thereafter pursuant to subsection 6.8.
"Subsidiary Guaranty" means the Subsidiary Guaranty executed and delivered
by existing Subsidiaries of Company on the Closing Date and to be executed and
delivered by additional Subsidiaries of Company from time to time thereafter in
accordance with subsection 6.8, substantially in the form of Exhibit XIX annexed
hereto.
"Subsidiary Pledge Agreement (U.S.)" means each Subsidiary Pledge Agreement
(U.S.) executed and delivered by an existing Subsidiary Guarantor on the Closing
Date or executed and delivered by any additional Subsidiary Guarantor from time
to time thereafter in accordance with subsection 6.8, in each case substantially
in the form of Exhibit XX annexed hereto, and "Subsidiary Pledge Agreements
(U.S.)" means all such Subsidiary Pledge Agreements, collectively.
"Subsidiary Patent and Trademark Security Agreement (U.S.)" means each
Subsidiary Patent and Trademark Security Agreement (U.S.) executed and delivered
by an existing Subsidiary Guarantor on the Closing Date or executed and
delivered by any additional Subsidiary Guarantor from time to time thereafter in
accordance with subsection 6.8, in each case substantially in the form of
Exhibit XXII annexed hereto, and "Subsidiary Patent and Trademark Security
Agreements (U.S.)" means all such Subsidiary Patent and Trademark Security
Agreements (U.S.), collectively.
"Subsidiary Security Agreement (U.S.)" means each Subsidiary Security
Agreement (U.S.) executed and delivered by an existing Subsidiary Guarantor on
the Closing Date or executed and delivered by any additional Subsidiary
Guarantor from time to time thereafter in accordance with subsection 6.8, in
each case substantially in the form of Exhibit XXI annexed hereto, and
"Subsidiary Security Agreements (U.S.)" means all such Subsidiary Security
Agreements (U.S.), collectively.
"Supplemental Collateral Agent" has the meaning assigned to that term in
subsection 9.1D.
"Swing Line Lender" means CIBC, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.
"Swing Line Loan Commitment" means the commitment of Swing Line
29
Lender to make Swing Line Loans to Company pursuant to subsection 2.1A(iv).
"Swing Line Loans" means the Loans made by Swing Line Lender to Company
pursuant to subsection 2.1A(iv).
"Swing Line Note" means any promissory note of Company issued pursuant to
subsection 2.1E to evidence the Swing Line Loans of Swing Line Lender,
substantially in the form of Exhibit VI-B annexed hereto, as it may be amended,
supplemented or otherwise modified from time to time.
"Syndication Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Tax" or "Taxes" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed and all related liabilities.
"Term Loans" means, collectively, the Tranche A Term Loans and the AXELs
Series B.
"Term Notes" means, collectively, the Tranche A Term Notes and the AXEL
Series B Notes.
"Title Company" means, collectively, Chicago Title Insurance Company, Ticor
Title Insurance Company and/or one or more other title insurance companies
reasonably satisfactory to Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at any date of
determination, the sum of (i) the aggregate principal amount of all outstanding
Revolving Loans (other than Revolving Loans made for the purpose of repaying any
Refunded Swing Line Loans or reimbursing the applicable Issuing Lender for any
amount drawn under any Letter of Credit but not yet so applied) plus (ii) the
Equivalent U.S. $ Amount of the aggregate principal amount of all outstanding
Swing Line Loans plus (iii) the Letter of Credit Usage.
"Tranche A Term Loan Commitment" means the commitment of a Lender to make a
Tranche A Term Loan to Company pursuant to subsection 2.1A(i), and "Tranche A
Term Loan Commitments" means such commitments of all Lenders in the aggregate.
"Tranche A Term Loan Exposure" means, with respect to any Lender as of any
date of determination (i) prior to the funding of the Tranche A Term Loans, that
Lender's Tranche A Term Loan Commitment and (ii) after the funding of the
Tranche A Term Loans, the outstanding principal amount of the Tranche A Term
Loan of that Lender.
"Tranche A Term Loans" means the Loans made by Lenders to Company pursuant
to subsection 2.1A(i).
"Tranche A Term Notes" means any promissory notes of Company issued
pursuant to subsection 2.1E to evidence the Tranche A Term Loans of any Lenders,
substantially in the form of Exhibit IV annexed hereto, as they may be amended,
30
supplemented or otherwise modified from time to time.
"Transaction Costs" means the fees, costs and expenses payable by Company
on or before the Closing Date in connection with the transactions contemplated
by the Loan Documents and the Related Agreements.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"U.K. Guaranty and Debenture" means the Guarantee and Debenture (U.K.)
executed and delivered by Mitel Telecom on the Closing Date and to be executed
and delivered by additional U.K. Subsidiaries of Company from time to time
thereafter in accordance with subsection 6.8, substantially in the form of
Exhibit XXIV annexed hereto.
"U.K. Pledge Agreement" means the Company Pledge Agreement (U.K.) executed
and delivered by Company on the Closing Date, substantially in the form of
Exhibit XXV annexed hereto.
"U.K. Plessey Entities" means PSL, AEI Semiconductors Limited, MEDL, UK
Cablevision Limited and GEC Plessey Semiconductor Overseas Limited, each a U.K.
Subsidiary of Company after giving effect to the Acquisition.
"U.K. Subsidiary" means each Subsidiary of Company incorporated under the
laws of England and Wales, Scotland or Northern Ireland.
"U.S. Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates,
which is not exempted by Section 4(b)(4) of ERISA.
"U.S. GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"U.S. Pension Plan" means any U.S. Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
31
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.
Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Company to Lenders pursuant to clauses (i), (ii), (iii) and (xiii)
of subsection 6.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 6.1(v)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 5.3.
1.3 Other Definitional Provisions and Rules of Construction.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use herein of the word "include" or "including", when following any
general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter.
D. Each reference herein to any Loan Document (including to any such Loan
Document as it may be separately defined herein) shall be deemed to include a
reference to such document as it may be amended, supplemented or otherwise
modified from time to time.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; the Register; Optional Notes.
A. Commitments. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Company herein set forth,
each Lender hereby severally agrees to make the Loans described in subsections
2.1A(i), 2.1A(ii) and 2.1A(iii) and Swing Line Lender hereby agrees to make the
Loans described in subsection 2.1A(iv).
(i) Tranche A Term Loans. Each Lender severally agrees to lend to
Company on the Closing Date an amount not exceeding its Pro Rata Share of
the aggregate amount of the Tranche A Term Loan Commitments to be used for
the purposes identified in subsection 2.5A. The amount of each Lender's
Tranche A
32
Term Loan Commitment is set forth opposite its name on Schedule 2.1 annexed
hereto and the aggregate amount of the Tranche A Term Loan Commitments is
$85,000,000; provided that the Tranche A Term Loan Commitments of Lenders
shall be adjusted to give effect to any assignments of the Tranche A Term
Loan Commitments pursuant to subsection 10.1B. Each Lender's Tranche A Term
Loan Commitment shall expire immediately and without further action on
February 20, 1998 if the Tranche A Term Loans are not made on or before
that date. Company may make only one borrowing under the Tranche A Term
Loan Commitments. Amounts borrowed under this subsection 2.1A(i) and
subsequently repaid or prepaid may not be reborrowed.
(ii) AXELs Series B. Each Lender severally agrees to lend to Company
on the Closing Date an amount not exceeding its Pro Rata Share of the
aggregate amount of the AXEL Series B Commitments to be used for the
purposes identified in subsection 2.5A. The amount of each Lender's AXEL
Series B Commitment is set forth opposite its name on Schedule 2.1 annexed
hereto and the aggregate amount of the AXEL Series B Commitments is
$150,000,000; provided that the AXEL Series B Commitments of Lenders shall
be adjusted to give effect to any assignments of the AXEL Series B
Commitments pursuant to subsection 10.1B. Each Lender's AXEL Series B
Commitment shall expire immediately and without further action on February
20, 1998 if the AXELs Series B are not made on or before that date. Company
may make only one borrowing under the AXEL Series B Commitments. Amounts
borrowed under this subsection 2.1A(i) and subsequently repaid or prepaid
may not be reborrowed.
(iii) Revolving Loans. Each Lender severally agrees, subject to the
limitations set forth below with respect to the maximum amount of Revolving
Loans permitted to be outstanding from time to time, to lend to Company
from time to time during the period from the Closing Date to but excluding
the Revolving Loan Commitment Termination Date an aggregate amount not
exceeding its Pro Rata Share of the aggregate amount of the Revolving Loan
Commitments to be used for the purposes identified in subsection 2.5B. The
original amount of each Lender's Revolving Loan Commitment is set forth
opposite its name on Schedule 2.1 annexed hereto and the aggregate original
amount of the Revolving Loan Commitments is $75,000,000; provided that the
Revolving Loan Commitments of Lenders shall be adjusted to give effect to
any assignments of the Revolving Loan Commitments pursuant to subsection
10.1B; and provided, further that the amount of the Revolving Loan
Commitments shall be reduced from time to time by the amount of any
reductions thereto made pursuant to subsections 2.4B(ii) and 2.4B(iii).
Each Lender's Revolving Loan Commitment shall expire on the Revolving Loan
Commitment Termination Date and all Revolving Loans and all other amounts
owed hereunder with respect to the Revolving Loans and the Revolving Loan
Commitments shall be paid in full no later than that date; provided that
each Lender's Revolving Loan Commitment shall expire immediately and
without further action on February 20, 1998 if the Term Loans are not made
on or before that date. Amounts borrowed under this subsection 2.1A(iii)
may be repaid and reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
33
Anything contained in this Agreement to the contrary notwithstanding,
the Revolving Loans and the Revolving Loan Commitments shall be subject to
the limitation that in no event shall the Total Utilization of Revolving
Loan Commitments at any time exceed the Revolving Loan Commitments then in
effect.
(iv) Swing Line Loans. Swing Line Lender hereby agrees, subject to the
limitations set forth below with respect to the maximum amount of Swing
Line Loans permitted to be outstanding from time to time, to make a portion
of the Revolving Loan Commitments available to Company from time to time
during the period from the Closing Date to but excluding the Revolving Loan
Commitment Termination Date by making Swing Line Loans to Company in an
aggregate amount not exceeding the amount of the Swing Line Loan Commitment
to be used for the purposes identified in subsection 2.5B, notwithstanding
the fact that such Swing Line Loans, when aggregated with Swing Line
Lender's outstanding Revolving Loans and Swing Line Lender's Pro Rata Share
of the Letter of Credit Usage then in effect, may exceed Swing Line
Lender's Revolving Loan Commitment; provided, however, that, upon receipt
by Swing Line Lender of a notice from Administrative Agent that one or more
of the applicable conditions specified in subsection 4.1 or 4.2 are not
then satisfied, no further Swing Line Loans shall be made. The original
amount of the Swing Line Loan Commitment is Cdn. $5,000,000; provided that
any reduction of the Revolving Loan Commitments made pursuant to subsection
2.4B(ii) or 2.4B(iii) which reduces the aggregate Revolving Loan
Commitments to an amount less than the then current amount of the Swing
Line Loan Commitment shall result in an automatic corresponding reduction
of the Swing Line Loan Commitment to the amount of the Revolving Loan
Commitments, as so reduced, without any further action on the part of
Company, any Agent or Swing Line Lender. The Swing Line Loan Commitment
shall expire on the Revolving Loan Commitment Termination Date and all
Swing Line Loans and all other amounts owed hereunder with respect to the
Swing Line Loans shall be paid in full no later than that date; provided
that the Swing Line Loan Commitment shall expire immediately and without
further action on February 20, 1998 if the Term Loans are not made on or
before that date. Amounts borrowed under this subsection 2.1A(iv) may be
repaid and reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
Anything contained in this Agreement to the contrary notwithstanding,
the Swing Line Loans and the Swing Line Loan Commitment shall be subject to
the limitation that in no event shall the Total Utilization of Revolving
Loan Commitments at any time exceed the Revolving Loan Commitments then in
effect.
With respect to any Swing Line Loans which have not been voluntarily
prepaid by Company pursuant to subsection 2.4B(i), Swing Line Lender may,
at any time in its sole and absolute discretion, deliver to Administrative
Agent (with a copy to Company), no later than 10:00 A.M. (Toronto time) on
the first Business Day in advance of the proposed Funding Date, a notice
(which shall be deemed to be a Notice of Borrowing given by Company)
requesting Lenders having Revolving Loan Exposure to make Revolving Loans
that are Base Rate Loans on such Funding Date in an amount equal to the
Equivalent U.S. $ Amount of such Swing Line Loans (the "Refunded Swing Line
Loans") outstanding on the date such notice is given which Swing Line
Lender requests such Lenders to prepay. Anything contained in this
Agreement to the contrary notwithstanding, (i) the proceeds of such
Revolving Loans
34
made by such Lenders other than Swing Line Lender shall be immediately
converted by Administrative Agent to the Equivalent Cdn. $ Amount and
delivered by Administrative Agent to Swing Line Lender (and not to Company)
and applied to repay a corresponding portion of the Refunded Swing Line
Loans and (ii) on the day such Revolving Loans are made, Swing Line
Lender's Pro Rata Share of the Refunded Swing Line Loans shall be deemed to
be paid with the proceeds of a Revolving Loan made by Swing Line Lender,
and such portion of the Swing Line Loans deemed to be so paid shall no
longer be outstanding as Swing Line Loans and shall no longer be due under
the Swing Line Note, if any, of Swing Line Lender but shall instead
constitute part of Swing Line Lender's outstanding Revolving Loans and
shall be due under the Revolving Note, if any, of Swing Line Lender.
Company hereby authorizes Administrative Agent and Swing Line Lender to
charge Company's accounts with Administrative Agent and Swing Line Lender
(up to the amount available in each such account) in order to immediately
pay Swing Line Lender the amount of the Refunded Swing Line Loans to the
extent the proceeds of such Revolving Loans made by Lenders having
Revolving Loan Exposure, including the Revolving Loan deemed to be made by
Swing Line Lender, are not sufficient to repay in full the Refunded Swing
Line Loans. If any portion of any such amount paid (or deemed to be paid)
to Swing Line Lender should be recovered by or on behalf of Company from
Swing Line Lender in bankruptcy, by assignment for the benefit of creditors
or otherwise, the loss of the amount so recovered shall be ratably shared
among all Lenders in the manner contemplated by subsection 10.5.
If for any reason (a) Revolving Loans are not made upon the request of
Swing Line Lender as provided in the immediately preceding paragraph in an
amount sufficient to repay any amounts owed to Swing Line Lender in respect
of any outstanding Swing Line Loans or (b) the Revolving Loan Commitments
are terminated at a time when any Swing Line Loans are outstanding, each
Lender having Revolving Loan Exposure shall be deemed to, and hereby agrees
to, have purchased a participation in Canadian Dollars in such outstanding
Swing Line Loans in an amount equal to its Pro Rata Share (calculated, in
the case of the foregoing clause (b), immediately prior to such termination
of the Revolving Loan Commitments) of the unpaid amount of such Swing Line
Loans together with accrued interest thereon. Upon one Business Day's
notice from Swing Line Lender, each such Lender shall deliver to Swing Line
Lender an amount in Canadian Dollars equal to its respective participation
in same day funds at the Funding and Payment Office. In order to further
evidence such participation (and without prejudice to the effectiveness of
the participation provisions set forth above), each Lender having Revolving
Loan Exposure agrees to enter into a separate participation agreement at
the request of Swing Line Lender in form and substance reasonably
satisfactory to Swing Line Lender. In the event any such Lender fails to
make available to Swing Line Lender the amount of such Lender's
participation as provided in this paragraph, Swing Line Lender shall be
entitled to recover such amount on demand from such Lender together with
interest thereon at the rate customarily used by Swing Line Lender for the
correction of errors among banks for three Business Days and thereafter at
the Base Rate. In the event Swing Line Lender receives a payment of any
amount in which other Lenders having Revolving Loan Exposure have purchased
participations as provided in this paragraph, Swing Line Lender shall
promptly distribute to each such other Lender its Pro Rata Share of such
payment.
Anything contained herein to the contrary notwithstanding, the
obligation of
35
each Lender having Revolving Loan Exposure to make Revolving Loans for the
purpose of repaying any Refunded Swing Line Loans pursuant to the second
preceding paragraph and each such Lender's obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to the immediately
preceding paragraph shall be absolute and unconditional and shall not be
affected by any circumstance, including (a) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against Swing
Line Lender, Company or any other Person for any reason whatsoever; (b) the
occurrence or continuation of an Event of Default or a Potential Event of
Default; (c) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or any
of its Subsidiaries; (d) any breach of this Agreement or any other Loan
Document by any party thereto; or (e) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing; provided
that such obligations of each such Lender are subject to the condition that
(X) Swing Line Lender believed in good faith that all conditions under
Section 4 to the making of the applicable Refunded Swing Line Loans or
other unpaid Swing Line Loans, as the case may be, were satisfied at the
time such Refunded Swing Line Loans or unpaid Swing Line Loans were made or
(Y) the satisfaction of any such condition not satisfied had been waived in
accordance with subsection 10.6 prior to or at the time such Refunded Swing
Line Loans or other unpaid Swing Line Loans were made.
B. Borrowing Mechanics. Tranche A Term Loans or AXELs Series B or Revolving
Loans made on any Funding Date (other than Revolving Loans made pursuant to a
request by Swing Line Lender pursuant to subsection 2.1A(iv) for the purpose of
repaying any Refunded Swing Line Loans or Revolving Loans made pursuant to
subsection 3.3B for the purpose of reimbursing any Issuing Lender for the amount
of a drawing under a Letter of Credit issued by it) shall be in an aggregate
minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of
that amount. Whenever Company desires that Lenders make Term Loans or Revolving
Loans it shall deliver to Administrative Agent a Notice of Borrowing no later
than 10:00 A.M. (Toronto time) at least three Business Days in advance of the
proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least one
Business Day in advance of the proposed Funding Date (in the case of a Base Rate
Loan). The Notice of Borrowing shall specify (i) the proposed Funding Date
(which shall be a Business Day), (ii) the amount and type of Loans requested,
(iii) with respect to any other Loans made during the Initial Period, that such
Loans shall be Base Rate Loans, (iii) in the case of Revolving Loans not made
during the Initial Period, whether such Loans shall be Base Rate Loans or
Eurodollar Rate Loans, (v) in the case of any Loans requested to be made as
Eurodollar Rate Loans, the initial Interest Period requested therefor, and (vi)
in the case of Swing Line Loans that such Loans shall bear interest by reference
to the Canadian Prime Rate. Term Loans and Revolving Loans may be continued as
or converted into Base Rate Loans and Eurodollar Rate Loans in the manner
provided in subsection 2.2D. In lieu of delivering the above-described Notice of
Borrowing, Company may give Administrative Agent telephonic notice by the
required time of any proposed borrowing under this subsection 2.1B; provided
that such notice shall be promptly confirmed in writing by delivery of a Notice
of Borrowing to Administrative Agent on or before the applicable Funding Date.
Whenever Company desires that Swing Line Lender make a Swing Line Loan, it
shall deliver to Agent a Notice of Borrowing no later than 12:00 Noon (Toronto
time); provided that Swing Line Loans (i) may be made on the same day's
telephone request by Company to Administrative Agent, providing the same
information to Administrative Agent as would be contained in a Notice of
Borrowing (which shall be deemed to have been
36
provided); and (ii) shall be made by Administrative Agent without notice from
Company in respect of any overdraft in Company's account with Swing Line Lender
or in connection with Company's "purchase card program" with Swing Line Lender
on Swing Line Lender's customary terms and conditions for such program. All
Swing Line Loans shall be made by Administrative Agent in accordance with the
terms of this Agreement and Swing Line Lender's usual and customary
documentation, if any, for the provision of swing line credit services.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to in this subsection 2.1B
that Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any Loans
in the event that any of the matters to which Company is required to certify in
the applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Company of the proceeds of any
Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.
37
C. Disbursement of Funds. All Term Loans and Revolving Loans under this
Agreement shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice
in lieu thereof), Administrative Agent shall notify each Lender or Swing Line
Lender, as the case may be of the proposed borrowing. Each Lender shall make the
amount of its Loan available to Administrative Agent not later than 12:00 Noon
(Toronto time) on the applicable Funding Date, and (other than with respect to
any Swing Line Loan made without notice from Company pursuant to subsection
2.1B) Swing Line Lender shall make the amount of its Swing Line Loan available
to Administrative Agent not later than 2:00 pm (Toronto time) on the applicable
Funding Date, in each case in same day funds in Dollars, at the Funding and
Payment Office. Except as provided in subsection 2.1A(iv) or subsection 3.3B
with respect to Revolving Loans used to repay Refunded Swing Line Loan or to
reimburse any Issuing Lender for the amount of a drawing under a Letter of
Credit issued by it, upon satisfaction or waiver of the conditions precedent
specified in subsections 4.1 (in the case of Loans made on the Closing Date) and
4.2 (in the case of all Loans), Administrative Agent shall make the proceeds of
such Loans available to Company on the applicable Funding Date by causing an
amount of same day funds in Dollars (or with respect to Swing Line Loans only,
in Canadian Dollars) equal to the proceeds of all such Loans received by
Administrative Agent from Lenders or Swing Line Lender, as the case may be, to
be credited to the account of Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any Lender prior to
the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
38
D. The Register.
(i) Administrative Agent shall maintain, at its address referred to in
subsection 10.8, a register for the recordation of the names and addresses
of Lenders and the Commitments and Loans of each Lender from time to time
(the "Register"). The Register shall be available for inspection by Company
or any Lender at any reasonable time and from time to time upon reasonable
prior notice.
(ii) Administrative Agent shall record in the Register the Tranche A
Term Loan Commitment, AXEL Series B Commitment and Revolving Loan
Commitment and the Tranche A Term Loan, AXEL Series B and Revolving Loans
from time to time of each Lender, the Swing Line Lone Commitment and the
Swing Line Loans from time to time of Swing Line Lender, and each repayment
or prepayment in respect of the principal amount of the Tranche A Term
Loan, AXEL Series B or Revolving Loans of each Lender or the Swing Line
Loans of Swing Line Lender. Any such recordation shall be conclusive and
binding on Company and each Lender, absent manifest error; provided that
failure to make any such recordation, or any error in such recordation,
shall not affect any Lender's Commitments or Company's Obligations in
respect of any applicable Loans.
(iii) Each Lender shall record on its internal records (including any
Notes held by such Lender) the amount of the Tranche A Term Loan, AXEL
Series B and each Revolving Loan made by it and each payment in respect
thereof. Any such recordation shall be conclusive and binding on Company,
absent manifest error; provided that failure to make any such recordation,
or any error in such recordation, shall not affect any Lender's Commitments
or Company's Obligations in respect of any applicable Loans; and provided,
further that in the event of any inconsistency between the Register and any
Lender's records, the recordations in the Register shall govern and be
conclusive and binding on such Lender, absent manifest error.
(iv) Company, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any such Commitment or Loan shall
be effective, in each case unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii). Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and
binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans.
(v) Company hereby designates CIBC to serve as Company's agent solely
for purposes of maintaining the Register as provided in this subsection
2.1D, and Company hereby agrees that, to the extent CIBC serves in such
capacity, CIBC and its officers, directors, employees, agents and
affiliates shall constitute Indemnitees for all purposes under subsection
10.3.
E. Optional Notes. If so requested by any Lender by written notice to
Company
39
(with a copy to Administrative Agent) at least two Business Days prior to the
Closing Date or at any time thereafter, Company shall execute and deliver to
such Lender (and/or, if applicable and if so specified in such notice, to any
Person who is an assignee of such Lender pursuant to subsection 10.1) on the
Closing Date (or, if such notice is delivered after the Closing Date, promptly
after Company's receipt of such notice) a promissory note or promissory notes to
evidence such Lender's Tranche A Term Loan, AXEL Series B, Revolving Loans or
Swing Line Loans, substantially in the form of Exhibit IV, Exhibit V, Exhibit VI
or Exhibit XXXII annexed hereto, respectively, with appropriate insertions.
2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of subsections 2.6 and 2.7,
each Term Loan and each Revolving Loan shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Eurodollar Rate. Subject to the provisions of subsection 2.7, each
Swing Line Loan shall bear interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Canadian Prime Rate. The applicable basis for
determining the rate of interest with respect to any Term Loan or any Revolving
Loan shall be selected by Company initially at the time a Notice of Borrowing is
given with respect to such Loan pursuant to subsection 2.1B, and the basis for
determining the interest rate with respect to any Term Loan or any Revolving
Loan may be changed from time to time pursuant to subsection 2.2D. If on any day
a Term Loan or Revolving Loan is outstanding with respect to which notice has
not been delivered to Administrative Agent in accordance with the terms of this
Agreement specifying the applicable basis for determining the rate of interest,
then for that day that Loan shall bear interest determined by reference to the
Base Rate.
(i) Subject to the provisions of subsections 2.2E and 2.7, Tranche A
Term Loans and Revolving Loans shall bear interest through maturity as
follows:
(a) if a Base Rate Loan, then at the sum of the Base Rate plus
the Applicable Base Rate Margin for Tranche A Term Loans; or
(b) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Eurodollar Rate Margin for Tranche
A Term Loans.
(ii) Subject to the provisions of subsections 2.2E and 2.7, the AXELs
Series B shall bear interest through maturity as follows:
(a) if a Base Rate Loan, then at the sum of the Base Rate plus
the Applicable Base Rate Margin for AXELs Series B; or
(b) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Eurodollar Rate Margin for AXELs
Series B.
(iii) Subject to the provisions of subsections 2.2E and 2.7, the Swing
Line Loans shall bear interest through maturity at the sum of the Canadian
Prime Rate plus the Applicable Base Rate Margin for Tranche A Term Loans.
40
B. Interest Periods. In connection with each Eurodollar Rate Loan, Company
may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"Interest Period") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:
(i) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the Funding Date in respect of such Loan, in the case of a Loan
initially made as a Eurodollar Rate Loan, or on the date specified in the
applicable Notice of Conversion/Continuation, in the case of a Loan
converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods applicable
to a Eurodollar Rate Loan continued as such pursuant to a Notice of
Conversion/Continuation, each successive Interest Period shall commence on
the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall,
subject to clause (v) of this subsection 2.2B, end on the last Business Day
of a calendar month;
(v) no Interest Period with respect to any portion of the Tranche A
Term Loans shall extend beyond February 12, 2003, no Interest Period with
respect to any portion of the AXELs Series B shall extend beyond December
26, 2003, and no Interest Period with respect to any portion of the
Revolving Loans shall extend beyond the Revolving Loan Commitment
Termination Date;
(vi) no Interest Period with respect to any portion of the Tranche A
Term Loans or AXELs Series B shall extend beyond a date on which Company is
required to make a scheduled payment of principal of the Tranche A Term
Loans or AXELs Series B, as the case may be, unless the sum of (a) the
aggregate principal amount of Tranche A Term Loans or AXELs Series B, as
the case may be, that are Base Rate Loans plus (b) the aggregate principal
amount of Tranche A Term Loans or AXELs Series B, as the case may be, that
are Eurodollar Rate Loans with Interest Periods expiring on or before such
date equals or exceeds the principal amount required to be paid on the
Tranche A Term Loans or AXELs Series B, as the case may be, on such date;
(vii) there shall be no more than five Interest Periods outstanding at
any time; and
(viii) in the event Company fails to specify an Interest Period for
any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice of
Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
41
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Swing Line Loans or any Revolving
Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4B(i),
interest accrued on such Swing Line Loans or Revolving Loans through the date of
such prepayment shall be payable on the next succeeding Interest Payment Date
applicable to Swing Line Loans or Base Rate Loans, respectively (or, if earlier,
at final maturity).
D. Conversion or Continuation. Subject to the provisions of subsection 2.6,
Company shall have the option (i) to convert at any time all or any part of its
outstanding Tranche A Term Loans, AXELs Series B or Revolving Loans equal to
$5,000,000 and integral multiples of $1,000,000 in excess of that amount from
Loans bearing interest at a rate determined by reference to one basis to Loans
bearing interest at a rate determined by reference to an alternative basis or
(ii) upon the expiration of any Interest Period applicable to a Eurodollar Rate
Loan, to continue all or any portion of such Loan equal to $5,000,000 and
integral multiples of $1,000,000 in excess of that amount as a Eurodollar Rate
Loan; provided, however, that a Eurodollar Rate Loan may only be converted into
a Base Rate Loan on the expiration date of an Interest Period applicable
thereto; provided further, however, that no Loan may be made as or converted
into a Eurodollar Rate Loan during the Initial Period.
Company shall deliver a Notice of Conversion/Continuation to Administrative
Agent no later than 10:00 A.M. (Toronto time) at least one Business Day in
advance of the proposed conversion date (in the case of a conversion to a Base
Rate Loan) and at least three Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation shall specify
(i) the proposed conversion/continuation date (which shall be a Business Day),
(ii) the amount and type of the Loan to be converted/continued, (iii) the nature
of the proposed conversion/continuation, (iv) in the case of a conversion to, or
a continuation of, a Eurodollar Rate Loan, the requested Interest Period, and
(v) in the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan, that no Potential Event of Default or Event of Default has occurred and is
continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Administrative Agent shall promptly transmit such notice by
telefacsimile or telephone to each Lender.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of
42
Conversion/Continuation for conversion to, or continuation of, a Eurodollar Rate
Loan (or telephonic notice in lieu thereof) shall be irrevocable on and after
the related Interest Rate Determination Date, and Company shall be bound to
effect a conversion or continuation in accordance therewith.
E. Default Rate. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and any interest
payments thereon not paid when due and any fees and other amounts then due and
payable hereunder, shall thereafter bear interest (including post-petition
interest in any proceeding under the Bankruptcy Code or other applicable
bankruptcy laws) payable upon demand (i) at a rate that is, to the extent
permitted by applicable law, 2% per annum in excess of the interest rate
otherwise payable at the time of the occurrence of such Event of Default under
this Agreement with respect to the applicable Loans (or, in the case of any such
fees and other amounts, at a rate which is, to the extent permitted by
applicable law, 2% per annum in excess of the interest rate otherwise payable
under this Agreement for Base Rate Loans) and (ii) to the extent the increased
rate under clause (i) above is not permitted by applicable law, at the interest
rate otherwise payable at the time of the occurrence of such Event of Default
under this Agreement with respect to the applicable Loans (or, in the case of
any such fees and other amounts, at the interest rate otherwise payable under
this Agreement for Base Rate Loans); provided that, in the case of Eurodollar
Rate Loans, upon the expiration of the Interest Period in effect at the time any
Event of Default has occurred and is continuing, such Eurodollar Rate Loans
shall thereupon become Base Rate Loans and shall thereafter bear interest
payable upon demand (a) to the extent permitted by applicable law at a rate
which is 2% per annum in excess of the interest rate otherwise payable under
this Agreement for Base Rate Loans and (b) to the extent the increased rate
under clause (a) above is not permitted by applicable law, at the interest rate
otherwise payable under this Agreement for Base Rate Loans. Payment or
acceptance of the increased rates of interest provided for in this subsection
2.2E is not a permitted alternative to timely payment and shall not constitute a
waiver of any Event of Default or otherwise prejudice or limit any rights or
remedies of Administrative Agent or any Lender.
F. Computation of Interest. Interest on the Loans shall be computed (i) in
the case of Base Rate Loans and Swing Line Loans bearing interest by reference
to the Canadian Prime Rate, on the basis of a 365-day or 366-day year, as the
case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of a
360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided that if a Loan is repaid on the same
day on which it is made, one day's interest shall be paid on that Loan.
For the purposes of the Interest Act (Canada), (i) whenever any interest or
fee under this Agreement is calculated using a rate based on a year of 360 days,
such rate determined pursuant to such calculation, when expressed as an annual
rate, is equivalent to (x) the applicable rate based on a year of 360 days, (y)
multiplied by the actual number of days in the calendar year in which the period
for which such interest or fee is payable (or compounded) ends, and (z) divided
by 360, (ii) the principal of deemed reinvestment of interest does not apply to
any interest calculation under this Agreement, and (iii) the rates of
43
interest stipulated in the Agreement are intended to be nominal rates and not
effective rates or yields.
2.3 Fees.
A. Commitment Fees. Company agrees to pay to Administrative Agent, for
distribution to each Lender having Revolving Loan Exposure in proportion to that
Lender's Pro Rata Share, commitment fees for the period from and including the
Closing Date to and excluding the Revolving Loan Commitment Termination Date
equal to the average of the daily excess of the Revolving Loan Commitments over
the sum of (i) the aggregate principal amount of outstanding Revolving Loans,
(but not any outstanding Swing Line Loans) plus (ii) the Letter of Credit Usage
multiplied by 1/2 of 1% per annum, such commitment fees to be calculated on the
basis of a 360-day year and the actual number of days elapsed and to be payable
quarterly in arrears on March 1, June 1, September 1 and December 1 of each
year, commencing on the first such date to occur after the Closing Date, and on
the Revolving Loan Commitment Termination Date.
B. Other Fees. Company agrees to pay to Syndication Agent and
Administrative Agent such fees in the amounts and at the times separately agreed
upon between Company, Syndication Agent and Administrative Agent.
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments;
General Provisions Regarding Payments; Application of Proceeds of
Collateral and Payments Under Guaranties.
A. Scheduled Payments of Term Loans.
(i) Scheduled Payments of Tranche A Term Loans. Company shall make
principal payments on the Tranche A Term Loans in installments on the dates
and in the amounts set forth below:
================================================================================
Scheduled Repayment
Date of Tranche A Term Loans
--------------------------------------------------------------------------------
June 26, 1998 $2,000,000
--------------------------------------------------------------------------------
September 25, 1998 $2,000,000
--------------------------------------------------------------------------------
December 25, 1998 $2,000,000
--------------------------------------------------------------------------------
March 26, 1999 $4,000,000
--------------------------------------------------------------------------------
June 25, 1999 $4,000,000
--------------------------------------------------------------------------------
September 24, 1999 $4,000,000
--------------------------------------------------------------------------------
December 24, 1999 $4,000,000
--------------------------------------------------------------------------------
March 31, 2000 $4,000,000
--------------------------------------------------------------------------------
June 30, 2000 $4,000,000
--------------------------------------------------------------------------------
September 29, 2000 $4,000,000
44
================================================================================
Scheduled Repayment
Date of Tranche A Term Loans
--------------------------------------------------------------------------------
December 29, 2000 $4,000,000
--------------------------------------------------------------------------------
March 30, 2001 $5,000,000
--------------------------------------------------------------------------------
June 29, 2001 $5,000,000
--------------------------------------------------------------------------------
September 28, 2001 $5,000,000
--------------------------------------------------------------------------------
December 26, 2001 $5,000,000
--------------------------------------------------------------------------------
March 29, 2002 $5,250,000
--------------------------------------------------------------------------------
June 28, 2002 $5,250,000
--------------------------------------------------------------------------------
September 27, 2002 $5,250,000
--------------------------------------------------------------------------------
December 27, 2002 $5,250,000
--------------------------------------------------------------------------------
February 12, 2003 $6,000,000
--------------------------------------------------------------------------------
TOTAL $85,000,000
================================================================================
; provided that the scheduled installments of principal of the Tranche A
Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche A Term Loans in
accordance with subsection 2.4B(iv); and provided, further that the Tranche
A Term Loans and all other amounts owed hereunder with respect to the
Tranche A Term Loans shall be paid in full no later than February 12, 2003,
and the final installment payable by Company in respect of the Tranche A
Term Loans on such date shall be in an amount, if such amount is different
from that specified above, sufficient to repay all amounts owing by Company
under this Agreement with respect to the Tranche A Term Loans.
(ii) Scheduled Payments of AXELs Series B. Company shall make
principal payments on the AXELs Series B in installments on the dates and
in the amounts set forth below:
================================================================================
Scheduled
Repayment
Date of AXELs Series B
--------------------------------------------------------------------------------
June 26, 1998 $750,000
--------------------------------------------------------------------------------
September 25, 1998 $375,000
--------------------------------------------------------------------------------
December 25, 1998 $375,000
--------------------------------------------------------------------------------
March 26, 1999 $375,000
--------------------------------------------------------------------------------
June 25, 1999 $375,000
--------------------------------------------------------------------------------
September 24, 1999 $375,000
--------------------------------------------------------------------------------
December 24, 1999 $375,000
45
================================================================================
Scheduled
Repayment
Date of AXELs Series B
--------------------------------------------------------------------------------
March 31, 2000 $375,000
--------------------------------------------------------------------------------
June 30, 2000 $375,000
--------------------------------------------------------------------------------
September 29, 2000 $375,000
--------------------------------------------------------------------------------
December 29, 2000 $375,000
--------------------------------------------------------------------------------
March 30, 2001 $375,000
--------------------------------------------------------------------------------
June 29, 2001 $375,000
--------------------------------------------------------------------------------
September 28, 2001 $375,000
--------------------------------------------------------------------------------
December 26, 2001 $375,000
--------------------------------------------------------------------------------
March 29, 2002 $375,000
--------------------------------------------------------------------------------
June 28, 2002 $375,000
--------------------------------------------------------------------------------
September 27, 2002 $375,000
--------------------------------------------------------------------------------
December 27, 2002 $375,000
--------------------------------------------------------------------------------
March 28, 2003 $35,625,000
--------------------------------------------------------------------------------
June 27, 2003 $35,625,000
--------------------------------------------------------------------------------
September 26, 2003 $35,625,000
--------------------------------------------------------------------------------
December 26, 2003 $35,625,000
--------------------------------------------------------------------------------
TOTAL $150,000,000
================================================================================
; provided that the scheduled installments of principal of the AXELs Series
B set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the AXELs Series B in accordance with subsection
2.4B(iv); and provided, further that the AXELs Series B and all other
amounts owed hereunder with respect to the AXELs Series B shall be paid in
full no later than December 26, 2003, and the final installment payable by
Company in respect of the AXELs Series B on such date shall be in an
amount, if such amount is different from that specified above, sufficient
to repay all amounts owing by Company under this Agreement with respect to
the AXELs Series B.
46
B. Prepayments and Reductions in Revolving Loan Commitments.
(i) Voluntary Prepayments. Company may, upon written or telephonic
notice to Administrative Agent on or prior to 12:00 Noon (Toronto time) on
the date of prepayment, which notice, if telephonic, shall be promptly
confirmed in writing, at any time and from time to time prepay any Swing
Line Loan on any Business Day in whole or in part in any amount. Company
may, upon not less than one Business Day's prior written or telephonic
notice, in the case of Base Rate Loans, and three Business Days' prior
written or telephonic notice, in the case of Eurodollar Rate Loans, in each
case given to Administrative Agent by 12:00 Noon (New York City time) on
the date required and, if given by telephone, promptly confirmed in writing
to Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or telephone
to each Lender), at any time and from time to time prepay any Term Loans or
Revolving Loans on any Business Day in whole or in part in an aggregate
minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess
of that amount; provided, however, that a Eurodollar Rate Loan may only be
prepaid on the expiration of the Interest Period applicable thereto. Notice
of prepayment having been given as aforesaid, the principal amount of the
Loans specified in such notice shall become due and payable on the
prepayment date specified therein. Any such voluntary prepayment shall be
applied as specified in subsection 2.4B(iv) and shall be accompanied by a
prepayment premium to the extent required pursuant to subsection 2.4B(v).
(ii) Voluntary Reductions of Revolving Loan Commitments. Company may,
upon not less than three Business Days' prior written or telephonic notice
confirmed in writing to Administrative Agent (which original written or
telephonic notice Administrative Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time to
time terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Loan Commitments in an amount up to the amount by
which the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed termination or
reduction; provided that any such partial reduction of the Revolving Loan
Commitments shall be in an aggregate minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess of that amount. Company's notice
to Administrative Agent shall designate the date (which shall be a Business
Day) of such termination or reduction and the amount of any partial
reduction, and such termination or reduction of the Revolving Loan
Commitments shall be effective on the date specified in Company's notice
and shall reduce the Revolving Loan Commitment of each Lender
proportionately to its Pro Rata Share.
(iii) Mandatory Prepayments and Mandatory Reductions of Revolving Loan
Commitments. Subject to the limitations set forth in subsection
2.4B(iv)(e), the Loans shall be prepaid and/or the Revolving Loan
Commitments shall be permanently reduced in the amounts and under the
circumstances set forth below, all such prepayments to be applied as set
forth below or as more specifically provided in subsection 2.4B(iv) and to
be accompanied by a prepayment premium to the extent required pursuant to
subsection 2.4B(v):
(a) Prepayments and Reductions From Net Asset Sale Proceeds. No
later than the first Business Day following the date of receipt by
Company or
47
any of its Subsidiaries of any Net Asset Sale Proceeds in respect of
any Asset Sale, Company shall prepay the Loans and/or the Revolving
Loan Commitments shall be permanently reduced in an aggregate amount
equal to such Net Asset Sale Proceeds; provided, however, that upon
receipt by Company or any of its Subsidiaries of any such Net Asset
Sale Proceeds, so long as no Potential Event of Default or Event of
Default shall have occurred and be continuing and to the extent that
the aggregate amount of Net Asset Sale Proceeds from the Closing Date
through the date of determination does not exceed $5,000,000 in the
aggregate in the 12 month period which commences on the Closing Date
or in any 12 month period which commences on each anniversary thereto,
Company may deliver to Administrative Agent an Officers' Certificate
setting forth (1) that portion of such Net Asset Sale Proceeds (such
portion being the "Proposed Asset Sale Reinvestment Proceeds") that
Company or such Subsidiary intends to reinvest in equipment or other
tangible or intangible productive assets of the general type used in
the business (excluding research and development costs) of Company and
its Subsidiaries (such equipment and other assets being "Eligible
Assets") within 180 days of such date of receipt and (2) the proposed
use of such Proposed Asset Sale Reinvestment Proceeds and such other
information with respect to such reinvestment as Administrative Agent
may reasonably request, and Company shall, or shall cause one or more
of its Subsidiaries to, promptly and diligently apply such Proposed
Asset Sale Reinvestment Proceeds to such reinvestment purposes;
provided, however, that at Company's option, such Proposed Asset Sale
Reinvestment Proceeds may be applied to prepay outstanding Revolving
Loans (without a reduction in Revolving Loan Commitments) to the full
extent thereof. In addition, Company shall, no later than 180 days
after receipt of such Proposed Asset Sale Reinvestment Proceeds that
have not theretofore been applied to the Obligations, make an
additional prepayment of the Loans (and/or the Revolving Loan
Commitments shall be reduced) in the full amount of all such Proposed
Asset Sale Reinvestment Proceeds that have not theretofore been so
reinvested in Eligible Assets; provided that Company shall not be
required to make any prepayment of the Loans to the extent that the
Net Asset Sale Proceeds from the Closing Date through the date of
determination does not exceed $500,000.
(b) Prepayments and Reductions from Net Insurance/ Condemnation
Proceeds. No later than the first Business Day following the date of
receipt by Administrative Agent or by Company or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds that are
required to be applied to prepay the Loans and/or reduce the Revolving
Loan Commitments pursuant to the provisions of subsection 6.4C,
Company shall prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an aggregate amount equal to the
amount of such Net Insurance/Condemnation Proceeds minus (if (1) no
Event of Default shall have occurred and be continuing and (2) Company
shall have delivered to Administrative Agent, on or before such first
Business Day, the Officers' Certificate described in subsection
6.4C(ii)), any Proposed Insurance Reinvestment Proceeds; provided,
however, that at Company's option, such Proposed Insurance
Reinvestment Proceeds may be applied to prepay outstanding Revolving
Loans (without a reduction in Revolving Loan Commitments) to the full
extent thereof. In addition, no later than 180 days after receipt of
any Proposed Insurance Reinvestment Proceeds,
48
Company shall prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an amount equal to the amount of any
such Proposed Insurance Reinvestment Proceeds that have not
theretofore been applied to the costs of repairing, restoring or
replacing the applicable assets of Company or its Subsidiaries or
reinvested in Eligible Assets; provided that Company shall not be
required to make any prepayment of the Loans to the extent that the
Net Insurance/Condemnation Proceeds from the Closing Date through the
date of determination does not exceed $500,000.
(c) Prepayments Due to Issuance of Debt. On the date of receipt
by Company or any of its Subsidiaries of the Cash proceeds of any
Indebtedness, including debt Securities of Company or any of its
Subsidiaries (other than Indebtedness expressly permitted pursuant to
subsections 7.1(i) through 7.1(vi) (such proceeds, net of underwriting
discounts and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses,
being the "Net Indebtedness Proceeds"), Company shall prepay the Loans
in an aggregate amount equal to such Net Indebtedness Proceeds;
provided however that payment or acceptance of amounts provided for in
this subsection 2.4B(iii)(c) shall not constitute a waiver of any
Event of Default resulting from the incurrence of such Indebtedness or
otherwise prejudice any rights or remedies of Agents or Lenders.
(d) Prepayments and Reductions Due to Issuance of Equity
Securities. On the date of receipt by Company of the Cash proceeds
(any such proceeds, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses, being "Net Equity Proceeds") from
the issuance of any equity Securities of Company, Company shall prepay
the Loans and/or the Revolving Loan Commitments shall be permanently
reduced in an aggregate amount equal to (1) with respect to any such
Net Equity Proceeds received during the period commencing on the
Closing Date and continuing through the first anniversary of the
Closing Date, 75% of such Net Equity Proceeds and (2) at any time
following the first anniversary of the Closing Date, either (X) 75% of
such Net Equity Proceeds or, (Y) if the Consolidated Leverage Ratio is
not more than 1.25:1.0 on the date such Net Equity Proceeds are
received, 50% of such Net Equity Proceeds.
(e) Prepayments and Reductions from Consolidated Excess Cash
Flow. In the event that there shall be Consolidated Excess Cash Flow
for any Fiscal Year commencing with Fiscal Year 1999, Company shall,
no later than 90 days after the end of such Fiscal Year, prepay the
Loans and/or the Revolving Loan Commitments shall be permanently
reduced in an aggregate amount equal to (1) with respect to
Consolidated Excess Cash Flow for Fiscal Year 1999, 75% of such
Consolidated Excess Cash Flow and (2) for each subsequent Fiscal Year,
either (X) 75% of such Consolidated Excess Cash Flow or, (Y) if the
Consolidated Leverage Ratio is not more than 1.25:1.0 on the last day
of any such Fiscal Year, 50% of such Consolidated Excess Cash Flow.
(f) Calculations of Net Proceeds Amounts; Additional Prepayments
and Reductions Based on Subsequent Calculations. Concurrently with any
49
prepayment of the Loans and/or reduction of the Revolving Loan
Commitments pursuant to subsections 2.4B(iii)(a)-(e), Company shall
deliver to Administrative Agent an Officers' Certificate demonstrating
the calculation of the amount (the "Net Proceeds Amount") of the
applicable Net Asset Sale Proceeds or Net Insurance/Condemnation
Proceeds, the applicable Net Indebtedness Proceeds or Net Equity
Proceeds (as such terms are defined in subsections 2.4B(iii)(c) and
(d), or the applicable Consolidated Excess Cash Flow, as the case may
be, that gave rise to such prepayment and/or reduction. In the event
that Company shall subsequently determine that the actual Net Proceeds
Amount was greater than the amount set forth in such Officers'
Certificate, Company shall promptly make an additional prepayment of
the Loans (and/or, if applicable, the Revolving Loan Commitments shall
be permanently reduced) in an amount equal to the amount of such
excess, and Company shall concurrently therewith deliver to
Administrative Agent an Officers' Certificate demonstrating the
derivation of the additional Net Proceeds Amount resulting in such
excess.
(g) Prepayments Due to Reductions or Restrictions of Revolving
Loan Commitments. Company shall from time to time prepay first the
Swing Line Loan and second the Revolving Loans to the extent necessary
so that the Total Utilization of Revolving Loan Commitments shall not
at any time exceed the Revolving Loan Commitments then in effect.
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of Loans and
Order of Maturity. Any voluntary prepayments pursuant to subsection
2.4B(i) shall be applied as specified by Company in the applicable
notice of prepayment; provided that in the event Company fails to
specify the Loans to which any such prepayment shall be applied, such
prepayment shall be applied first to repay outstanding Swing Line
Loans to the full extent thereof, second to repay outstanding
Revolving Loans to the full extent thereof, and third to repay
outstanding Term Loans to the full extent thereof. Any voluntary
prepayments of the Term Loans pursuant to subsection 2.4B(i) shall be
applied to prepay the Tranche A Term Loans and the AXELs Series B on a
pro rata basis (in accordance with the respective outstanding
principal amounts thereof) and to reduce the scheduled installments of
principal of the Tranche A Term Loans and AXELs Series B set forth in
subsections 2.4A(i) and 2.4A(ii) on a pro rata basis.
(b) Application of Mandatory Prepayments by Type of Loans. Any
amount (the "Applied Amount") required to be applied as a mandatory
prepayment of the Loans and/or a reduction of the Revolving Loan
Commitments pursuant to subsections 2.4B(iii)(a)-(f) shall be applied
first to prepay the Term Loans to the full extent thereof, second, to
the extent of any remaining portion of the Applied Amount, to prepay
the Swing Line Loans to the full extent thereof and to permanently
reduce the Revolving Loan Commitments by the amount of such
prepayment, third to the extent of any remaining portion of the
Applied Amount, to prepay the Revolving Loans to the full extent
thereof and to further permanently reduce the Revolving Loan
Commitments by the amount of such prepayment, and fourth, to the
extent of
50
any remaining portion of the Applied Amount, to further permanently
reduce the Revolving Loan Commitments to the full extent thereof;
provided, however, that notwithstanding any other provision in this
Agreement to the contrary, to the extent that any such application of
any portion of any Applied Amount to the AXELs Series B would violate
the limitations set forth in subsection 2.4B(iv)(e), then such portion
of the Applied Amount, shall be applied first to prepay the Tranche A
Term Loans to the full extent thereof, second in the order as
otherwise set forth in clauses "second", "third" and "fourth" above
and third to the extent of any remaining portion of any such Applied
Amount, to the payment of any other amounts which may then be due and
owing by Company under any Loan Document (except to the extent any
such payment would violate the limitations set forth in subsection
2.4B(iv)(e)), and fourth, to be returned to Company.
(c) Application of Mandatory Prepayments of Term Loans to Tranche
A Term Loans and AXELs Series B and the Scheduled Installments of
Principal Thereof. Subject to the provisions of subsection
2.4B(iv)(b), any mandatory prepayments of the Term Loans pursuant to
subsection 2.4B(iii) shall be applied to prepay the Tranche A Term
Loans and the AXELs Series B on a pro rata basis in accordance with
the respective outstanding principal amounts thereof. Any mandatory
prepayments applied to the Tranche A Term Loans or the AXELs Series B
pursuant to this subsection 2.4B(iv)(c) shall be applied to reduce the
scheduled installments of principal of the Tranche A Term Loans or the
AXELs Series B, as the case may be, set forth in subsection 2.4A(i) or
2.4A(ii), respectively, as follows:
(1) Net Asset Sale Proceeds, Net Insurance/ Condemnation
Proceeds, Net Indebtedness Proceeds and Net Equity Proceeds. Any
such mandatory prepayments pursuant to subsections 2.4B(iii)(a),
(b), (c) and (d) (and any related such mandatory prepayments
pursuant to subsection 2.4B(iii)(f)) shall be applied on a pro
rata basis (in accordance with the respective outstanding
principal amounts thereof) to each such scheduled installment
that is unpaid at the time of such prepayment.
(2) Consolidated Excess Cash Flow. Any such mandatory
prepayments pursuant to subsections 2.4B(iii)(e) (and any related
such mandatory prepayments pursuant to subsection 2.4B(iii)(f))
shall be applied to reduce such scheduled installments in inverse
order of maturity.
(d) Waiver of Certain Mandatory Prepayments. Anything contained
herein to the contrary notwithstanding, so long as any Tranche A Term
Loans are outstanding, in the event Company is required to make any
mandatory prepayment (a "Waivable Mandatory Prepayment") of the AXELs
Series B pursuant to subsection 2.4B(iii)(e), (X) not less than three
Business Days prior to the date (the "Required Prepayment Date") on
which Company is required to make such Waivable Mandatory Prepayment,
Company shall notify Administrative Agent of the amount of such
prepayment, and Administrative Agent will promptly thereafter notify
each Lender holding an outstanding AXEL Series B of the amount of such
Lender's Pro Rata Share of such
51
Waivable Mandatory Prepayment and such Lender's option to refuse such
amount, (Y) each such Lender may exercise such option by giving
written notice to Company and Administrative Agent of its election to
do so on or before the first Business Day (the "Cutoff Date") prior to
the Required Prepayment Date (it being understood that any Lender
which does not notify Company and Administrative Agent of its election
to exercise such option on or before the Cutoff Date shall be deemed
to have elected, as of the Cutoff Date, not to exercise such option),
and (Z) on the Required Prepayment Date, Company shall pay to
Administrative Agent the amount of the Waivable Mandatory Prepayment,
which amount shall be applied (1) in an amount equal to that portion
of the Waivable Mandatory Prepayment payable to those Lenders that
have elected not to exercise such option, to prepay the AXELs Series B
of such Lenders (which prepayment shall be applied to the scheduled
installments of principal of the AXELs Series B in accordance with
subsection 2.4B(iv)(c)) and (2) in an amount equal to that portion of
the Waivable Mandatory Prepayment otherwise payable to those Lenders
that have elected to exercise such option, to prepay the Tranche A
Term Loans (which prepayment shall be applied to the scheduled
installments of principal of the Tranche A Term Loans in accordance
with subsection 2.4B(iv)(c).
(e) Limitation on Mandatory Prepayments of AXELs Series B.
Anything contained herein to the contrary notwithstanding, during the
period commencing on the Closing Date and continuing through the fifth
anniversary of the Closing Date, in no event shall the sum of (X) the
aggregate amount of all mandatory prepayments of AXELs Series B
pursuant to subsection 2.4B(iii) plus (Y) the aggregate amount of all
scheduled prepayments of AXELs Series B pursuant to subsection
2.4A(ii) exceed an amount equal to 25% of the aggregate principal
amount of the AXELs Series B on the Closing Date, it being understood
and agreed that no such amount shall be payable or required to be paid
under this Agreement.
(f) Application of Prepayments to Base Rate Loans and Eurodollar
Rate Loans. Considering Tranche A Term Loans, AXELs Series B and
Revolving Loans being prepaid separately, any prepayment thereof shall
be applied first to Base Rate Loans to the full extent thereof before
application to Eurodollar Rate Loans, in each case in a manner which
minimizes the amount of any payments required to be made by Company
pursuant to subsection 2.6D.
52
(v) Prepayment Premium.
(a) Concurrently with any voluntary prepayments made pursuant to
subsection 2.4B(i) or any mandatory prepayments made pursuant to
subsection 2.4B(iii)(a), (b) or (c) the proceeds of which voluntary or
mandatory prepayment are applied to the AXELs Series B pursuant to
subsection 2.4B(iv), Company shall pay to Administrative Agent, for
distribution to the AXEL Series B Lenders (i) in the event such
prepayment is made on or prior to the first anniversary of the Closing
Date, a prepayment premium equal to 1.0% of the principal amount of
such prepayment, and (ii) in the event such prepayment is made during
the six month period next succeeding the first anniversary of the
Closing Date, a prepayment premium equal to 0.50% of the principal
amount of such prepayment. The prepayment of any amounts owing to an
AXEL Series B Lender pursuant to subsection 2.10 shall not require the
payment of any prepayment premium pursuant to this subsection 2.4B(v).
(b) Aggregate prepayment premiums received by Administrative
Agent shall be apportioned among all outstanding AXELs Series B to
which such prepayment premiums relate, in each case proportionately to
the AXELs Series B Lenders' respective Pro Rata Shares.
C. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Company of principal,
interest, fees and other Obligations hereunder and under the Notes shall be
made in Dollars in same day funds, without defense, setoff or counterclaim,
free of any restriction or condition, and delivered to Administrative Agent
not later than 12:00 Noon (Toronto time) on the date due at the Funding and
Payment Office for the account of Lenders; funds received by Administrative
Agent after that time on such due date shall be deemed to have been paid by
Company on the next succeeding Business Day. Company shall make each
payment of Swing Line Loans in Canadian Dollars and each payment of
Revolving Loans and Term Loans in Dollars. Company hereby authorizes
Administrative Agent to charge its accounts with Administrative Agent in
order to cause timely payment to be made to Administrative Agent of all
principal, interest, fees and expenses due hereunder (subject to sufficient
funds being available in its accounts for that purpose).
(ii) Application of Payments to Principal and Interest. Except as
provided in subsection 2.2C, all payments in respect of the principal
amount of any Loan shall include payment of accrued interest on the
principal amount being repaid or prepaid, and all such payments (and, in
any event, any payments in respect of any Loan on a date when interest is
due and payable with respect to such Loan) shall be applied to the payment
of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
payments in respect of Term Loans and Revolving Loans shall be apportioned
among all outstanding Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares. Administrative
Agent shall promptly distribute to each Lender, at its primary address set
forth below its name on the appropriate signature page hereof or at such
other address as such Lender may request, its Pro
53
Rata Share of all such payments received by Administrative Agent, any
prepayment premiums payable to such Lender when received by Administrative
Agent pursuant to Section 2.4(v), and the commitment fees of such Lender
when received by Administrative Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4C(iii), if,
pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing of
any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
that the failure to make (or any error in the making of) a notation of any
Loan made under such Note shall not limit or otherwise affect the
obligations of Company hereunder or under such Note with respect to any
Loan or any payments of principal or interest on such Note.
D. Application of Proceeds of Collateral and Payments Under Guaranties.
(i) Application of Proceeds of Collateral. Except as provided in
subsection 2.4B(iii)(a) with respect to prepayments from Net Asset Sale
Proceeds, all proceeds received by Administrative Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral under any Collateral Document may, in the discretion of
Administrative Agent, be held by Administrative Agent as Collateral for,
and/or (then or at any time thereafter) applied in full or in part by
Administrative Agent against, the applicable Secured Obligations (as
defined in such Collateral Document) or Indebtedness (as defined in the
U.K. Guarantee and Debenture and the U.K. Pledge Agreement) in the
following order of priority:
(a) To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Administrative Agent and its agents and counsel, and all other
expenses, liabilities and advances made or incurred by Administrative
Agent in connection therewith, and all amounts for which
Administrative Agent is entitled to indemnification under such
Collateral Document and all advances made by Administrative Agent
thereunder for the account of the applicable Loan Party, and to the
payment of all costs and expenses paid or incurred by Administrative
Agent in connection with the exercise of any right or remedy under
such Collateral Document, all in accordance with the terms of this
Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such proceeds, to the
payment of all other such Secured Obligations or such Indebtedness for
the
54
ratable benefit of the Agents, Lenders and Lender Counterparties; and
(c) thereafter, to the extent of any excess such proceeds, to the
payment to or upon the order of such Loan Party or to whosoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
(ii) Application of Payments Under Guaranties. All payments received
by Administrative Agent under any Guaranty shall be applied promptly from
time to time by Administrative Agent in the following order of priority:
(a) To the payment of the costs and expenses of any collection or
other realization under such Guaranty, including reasonable
compensation to Administrative Agent and its agents and counsel, and
all expenses, liabilities and advances made or incurred by
Administrative Agent in connection therewith, all in accordance with
the terms of this Agreement and such Guaranty;
(b) thereafter, to the extent of any excess such payments, to the
payment of all other Guarantied Obligations (as defined in the
Subsidiary Guaranty) or Indebtedness (as defined in the U.K. Guarantee
and Debenture), as applicable, for the ratable benefit of the Agents,
Lenders and Lender Counterparties; and
(c) thereafter, to the extent of any excess such payments, to the
payment to the applicable Subsidiary Guarantor or to whosoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
2.5 Use of Proceeds.
A. Term Loans. The proceeds of the Term Loans shall be applied by Company
to fund the Acquisition Financing Requirements.
B. Revolving Loans; Swing Line Loans. The proceeds of any Revolving Loans
shall be applied by Company (i) for general corporate purposes, which may
include the making of intercompany loans to any of Company's wholly-owned
Subsidiaries, in accordance with subsection 7.1(iv), for their own general
corporate purposes and (ii) to acquire equity interest or other business assets
and pay related expenses in connection with any Permitted Acquisition. The
proceeds of any Swing Line Loans shall be applied by Company for the purposes
set forth in clause (i) above.
C. Margin Regulations. No portion of the proceeds of any borrowing under
this Agreement shall be used by Company or any of its Subsidiaries in any manner
that might cause the borrowing or the application of such proceeds to violate
Regulation G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board or
to violate the Exchange Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.
55
2.6 Special Provisions Governing Eurodollar Rate Loans.
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable after
10:00 A.M. (Toronto time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by Company.
C. Illegality or Impracticability of Eurodollar Rate Loans. In the event
that on any date any Lender shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto but shall be made only
after consultation with Company and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful
as a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the London interbank market or the position of
such Lender in that market, then, and in any such event, such Lender shall be an
"Affected Lender" and it shall on that day give notice (by telefacsimile or by
telephone confirmed in writing) to Company and Administrative Agent of such
determination (which notice Administrative Agent shall promptly transmit to each
other Lender). Thereafter (a) the obligation of the Affected Lender to make
Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until
such notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "Affected
Loans") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with
56
respect to the Affected Loans or when required by law, and (d) the Affected
Loans shall automatically convert into Base Rate Loans on the date of such
termination. Notwithstanding the foregoing, to the extent a determination by an
Affected Lender as described above relates to a Eurodollar Rate Loan then being
requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, Company shall have the option, subject to the
provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Lenders by giving notice (by telefacsimile or
by telephone confirmed in writing) to Administrative Agent of such rescission on
the date on which the Affected Lender gives notice of its determination as
described above (which notice of rescission Administrative Agent shall promptly
transmit to each other Lender). Except as provided in the immediately preceding
sentence, nothing in this subsection 2.6C shall affect the obligation of any
Lender other than an Affected Lender to make or maintain Loans as, or to convert
Loans to, Eurodollar Rate Loans in accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate
Loans and any loss, expense or liability sustained by that Lender in connection
with the liquidation or re-employment of such funds) which that Lender may
sustain: (i) if for any reason (other than a default by that Lender) a borrowing
of any Eurodollar Rate Loan does not occur on a date specified therefor in a
Notice of Borrowing or a telephonic request for borrowing, or a conversion to or
continuation of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment (including any prepayment
pursuant to subsection 2.4B(i)) or other principal payment or any conversion of
any of its Eurodollar Rate Loans occurs on a date prior to the last day of an
Interest Period applicable to that Loan, (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by Company, or (iv) as a consequence of any other default by
Company in the repayment of its Eurodollar Rate Loans when required by the terms
of this Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or transfer
Eurodollar Rate Loans at, to, or for the account of any of its branch offices or
the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation of
all amounts payable to a Lender under this subsection 2.6 and under subsection
2.7A shall be made as though that Lender had actually funded each of its
relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence of and during
the continuation of a Potential Event of Default or an Event of Default, (i)
Company may not elect to have a Loan be made or maintained as, or converted to,
a Eurodollar Rate Loan after
57
the expiration of any Interest Period then in effect for that Loan and (ii)
subject to the provisions of subsection 2.6D, any Notice of Borrowing or Notice
of Conversion/Continuation given by Company with respect to a requested
borrowing or conversion/continuation that has not yet occurred shall be deemed
to be rescinded by Company.
2.7 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes. Subject to the provisions of
subsection 2.7B (which shall be controlling with respect to the matters covered
thereby), in the event that any Lender shall determine (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto) that any law, treaty or governmental rule, regulation or order,
or any change therein or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by such
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any addition resulting from a higher rate of, or
from a change in the calculation of, income or capital tax relating to such
Lender's income or capital in general) with respect to this Agreement or
any of its obligations hereunder or any payments to such Lender (or its
applicable lending office) of principal, interest, fees or any other amount
payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, CDIC insurance, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in or
for the account of, or advances or loans by, or other credit extended by,
or any other acquisition of funds by, any office of such Lender (other than
any such reserve or other requirements with respect to Eurodollar Rate
Loans that are reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the London interbank market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
58
B. Withholding of Taxes.
(i) All payments by Company hereunder under this Agreement shall be
made free and clear of and without deduction or withholding for any and all
Taxes imposed by Canada (or any political subdivision or taxing authority
thereof), unless such Taxes are required by applicable law to be deducted
or withheld. If Company shall be required by applicable law to deduct or
withhold any such Taxes from or in respect of any amount payable hereunder,
except as provided in the next sentence, (a) the amount payable shall be
increased (and for greater certainty, in the case of interest, the amount
of interest shall be increased) as may be necessary so that after making
all required deductions or withholdings (including deductions or
withholdings applicable to any additional amounts paid under this
subsection 2.7B), the affected Lenders or Administrative Agent, as the case
may be, receive an amount equal to the amount they would have received if
no such deduction or withholding had been made; (b) Company shall make such
deductions or withholdings; and (c) Company shall immediately pay the full
amount deducted or withheld to the relevant governmental entity in
accordance with applicable law. Company will not be required to pay any
such additional amounts to any Lender or Administrative Agent by reason of
that Lender being connected with Canada otherwise than merely by lending
money to the Company pursuant to this Agreement.
(ii) Company agrees to immediately pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges, financial
institutions duties, debits taxes or similar levies (all such taxes,
charges, duties and levies being referred to as "Other Taxes" which arise
from any payment made by Company hereunder or from the execution, delivery
or registration of, or otherwise with respect to this Agreement.
(iii) Company agrees to indemnify Lenders and Administrative Agent for
the full amount of Taxes or Other Taxes not deducted or withheld and paid
by the Company in accordance with subsection 2.7B to the relevant taxation
or other authority and any Taxes or Other Taxes imposed by any jurisdiction
on amounts payable by Company under this subsection 2.7B, paid by Lenders
or Administrative Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not any such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within
15 days from the date Administrative Agent or the relevant Lenders make
written demand therefor. A certificate as to the amount of such Taxes or
Other Taxes, providing reasonable details of the calculation thereof, and
evidence of payment thereof submitted to Company by Administrative Agent or
relevant Lender shall be prima facie evidence of the amount due from
Company to Administrative Agent or such Lender.
(iv) Company shall furnish to Administrative Agent and Lenders the
original or a certified copy of a receipt evidencing payment of Taxes or
Other Taxes made by Company within 30 days after the date of any payment of
Taxes or Other Taxes.
C. Capital Adequacy Adjustment. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the date hereof of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in
59
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its applicable lending
office) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any such governmental authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on the capital of such Lender or any corporation controlling such
Lender as a consequence of, or with reference to, such Lender's Loans or
Commitments or Letters of Credit or participations therein or other obligations
hereunder with respect to the Loans or the Letters of Credit to a level below
that which such Lender or such controlling corporation could have achieved but
for such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five Business Days after receipt by Company from such Lender of the statement
referred to in the next sentence, Company shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver
to Company (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis of the calculation of such additional
amounts, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
2.8 Obligation of Lenders and Issuing Lenders to Mitigate.
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in its
sole discretion, the making, issuing, funding or maintaining of such Commitments
or Loans or Letters of Credit through such other lending or letter of credit
office or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; provided that such
Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Company agrees to
pay all incremental expenses incurred by such Lender or Issuing Lender as a
result of utilizing such other lending or letter of credit office as described
in clause (i) above. A certificate as to the amount of any such expenses payable
by Company pursuant to this subsection 2.8 (setting forth in reasonable detail
the basis for requesting such amount) submitted by such Lender or Issuing Lender
to Company (with a copy to Administrative Agent) shall be conclusive absent
manifest error.
60
2.9 Defaulting Lenders.
Anything contained herein to the contrary notwithstanding, in the event
that any Lender (a "Defaulting Lender") defaults (a "Funding Default") in its
obligation to fund any Revolving Loan (a "Defaulted Revolving Loan") in
accordance with subsection 2.1 as a result of the appointment of a receiver or
conservator with respect to such Lender at the direction or request of any
regulatory agency or authority, then (i) during any Default Period (as defined
below) with respect to such Defaulting Lender, such Defaulting Lender shall be
deemed not to be a "Lender" for purposes of voting on any matters (including the
granting of any consents or waivers) with respect to any of the Loan Documents,
(ii) to the extent permitted by applicable law, until such time as the Default
Excess (as defined below) with respect to such Defaulting Lender shall have been
reduced to zero, (a) any voluntary prepayment of the Revolving Loans pursuant to
subsection 2.4B(i) shall, if Company so directs at the time of making such
voluntary prepayment, be applied to the Revolving Loans of other Lenders as if
such Defaulting Lender had no Revolving Loans outstanding and the Revolving Loan
Exposure of such Defaulting Lender were zero, and (b) any mandatory prepayment
of the Revolving Loans pursuant to subsection 2.4B(iii) shall, if Company so
directs at the time of making such mandatory prepayment, be applied to the
Revolving Loans of other Lenders (but not to the Revolving Loans of such
Defaulting Lender) as if such Defaulting Lender had funded all Defaulted
Revolving Loans of such Defaulting Lender, it being understood and agreed that
Company shall be entitled to retain any portion of any mandatory prepayment of
the Revolving Loans that is not paid to such Defaulting Lender solely as a
result of the operation of the provisions of this clause (b), (iii) such
Defaulting Lender's Revolving Loan Commitment and outstanding Revolving Loans
and such Defaulting Lender's Pro Rata Share of the Letter of Credit Usage shall
be excluded for purposes of calculating the commitment fee payable to Lenders
pursuant to subsection 2.3A in respect of any day during any Default Period with
respect to such Defaulting Lender, and such Defaulting Lender shall not be
entitled to receive any commitment fee pursuant to subsection 2.3A with respect
to such Defaulting Lender's Revolving Loan Commitment in respect of any Default
Period with respect to such Defaulting Lender, and (iv) the Total Utilization of
Revolving Loan Commitments as at any date of determination shall be calculated
as if such Defaulting Lender had funded all Defaulted Revolving Loans of such
Defaulting Lender.
For purposes of this Agreement, (I) "Default Period" means, with respect to
any Defaulting Lender, the period commencing on the date of the applicable
Funding Default and ending on the earliest of the following dates: (A) the date
on which all Revolving Loan Commitments are cancelled or terminated and/or the
Obligations are declared or become immediately due and payable, (B) the date on
which (1) the Default Excess with respect to such Defaulting Lender shall have
been reduced to zero (whether by the funding by such Defaulting Lender of any
Defaulted Revolving Loans of such Defaulting Lender or by the non-pro rata
application of any voluntary or mandatory prepayments of the Revolving Loans in
accordance with the terms of this subsection 2.9 or by a combination thereof)
and (2) such Defaulting Lender shall have delivered to Company and
Administrative Agent a written reaffirmation of its intention to honor its
obligations under this Agreement with respect to its Revolving Loan Commitment,
and (C) the date on which Company, Administrative Agent and Requisite Lenders
waive all Funding Defaults of such Defaulting Lender in writing, and (II)
"Default Excess" means, with respect to any Defaulting Lender, the excess, if
any, of such Defaulting Lender's Pro Rata Share of the aggregate outstanding
principal amount of Revolving Loans of all Lenders (calculated as if all
Defaulting Lenders (other than such Defaulting Lender) had funded all of their
respective Defaulted Revolving Loans) over the
61
aggregate outstanding principal amount of Revolving Loans of such Defaulting
Lender.
No Commitment of any Lender shall be increased or otherwise affected, and,
except as otherwise expressly provided in this subsection 2.9, performance by
Company of its obligations under this Agreement and the other Loan Documents
shall not be excused or otherwise modified, as a result of any Funding Default
or the operation of this subsection 2.9. The rights and remedies against a
Defaulting Lender under this subsection 2.9 are in addition to other rights and
remedies which Company may have against such Defaulting Lender with respect to
any Funding Default and which Administrative Agent or any Lender may have
against such Defaulting Lender with respect to any Funding Default.
2.10 Removal or Replacement of a Lender.
A. Anything contained in this Agreement to the contrary notwithstanding, in
the event that:
(i) (a) any Lender shall give notice to Company that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under
subsection 2.7 or subsection 3.6 (any such Lender, an "Increased-Cost
Lender"), (b) the circumstances which have caused such Lender to be an
Affected Lender or which entitle such Lender to receive such payments shall
remain in effect, and (c) such Lender shall fail to withdraw such notice
within five Business Days after Company's request for such withdrawal; or
(ii) (a) any Lender shall become a Defaulting Lender, (b) the Default
Period for such Defaulting Lender shall remain in effect, and (c) such
Defaulting Lender shall fail to cure the default as a result of which it
has become a Defaulting Lender within five Business Days after Company's
request that it cure such default; or
(iii) (a) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions of
this Agreement as contemplated by clauses (i) through (v) of the first
provision to subsection 10.6A, the consent of Requisite Lenders shall have
been obtained but the consent of one or more of such other Lenders (each a
"Non-Consenting Lender") whose consent is required shall not have been
obtained, and (b) the failure to obtain Non-Consenting Lenders' consents
does not result solely from the exercise of Non-Consenting Lenders' rights
(and the withholding of any required consents by Non-Consenting Lenders)
pursuant to the second provision to subsection 10.6A;
then, and in each such case, Company shall have the right, at its option, to
remove or replace the applicable Increased-Cost Lender, Defaulting Lender or
Non-Consenting Lender (the "Terminated Lender") to the extent permitted by
subsection 2.10B.
B. Company may, by giving written notice to Administrative Agent and any
Terminated Lender of its election to do so:
(i) elect to (a) terminate the Revolving Loan Commitment, if any, of
such Terminated Lender upon receipt by such Terminated Lender of such
notice and (b) prepay on the date of such termination any outstanding Loans
made by such Terminated Lender, together with accrued and unpaid interest
thereon and any other amounts payable to such Terminated Lender hereunder
pursuant to subsection 2.3,
62
subsection 2.6, subsection 2.7 or subsection 3.6 or otherwise; provided
that, in the event such Terminated Lender has any Loans outstanding at the
time of such termination, the written consent of Administrative Agent and
Requisite Lenders (which consent shall not be unreasonably withheld or
delayed) shall be required in order for Company to make the election set
forth in this clause (i); or
(ii) elect to cause such Terminated Lender (and such Terminated Lender
hereby irrevocably agrees) to assign its outstanding Loans and its
Revolving Loan Commitment, if any, in full to one or more Eligible
Assignees (each a "Replacement Lender") in accordance with the provisions
of subsection 10.1B; provided that (a) on the date of such assignment,
Company shall pay any amounts payable to such Terminated Lender pursuant to
subsection 2.3, subsection 2.6, subsection 2.7 or subsection 3.6 or
otherwise as if it were a prepayment and (b) in the event such Terminated
Lender is a Non-Consenting Lender, each Replacement Lender shall consent,
at the time of such assignment, to each matter in respect of which such
Terminated Lender was a Non-Consenting Lender;
provided that (X) Company may not make either of the elections set forth in
clauses (i) or (ii) above with respect to any Non-Consenting Lender unless
Company also makes one of such elections with respect to each other Terminated
Lender which is a Non-Consenting Lender and (Y) Company may not make either of
such elections with respect to any Terminated Lender that is an Issuing Lender
unless, prior to the effectiveness of such election, Company shall have caused
each outstanding Letter of Credit issued by such Issuing Lender to be cancelled.
C. Upon the prepayment of all amounts owing to any Terminated Lender and
the termination of such Terminated Lender's Revolving Loan Commitment, if any,
pursuant to clause (i) of subsection 2.10B, (i) Schedule 2.1 shall be deemed
modified to reflect any corresponding changes in the Revolving Loan Commitments
and (ii) such Terminated Lender shall no longer constitute a "Lender" for
purposes of this Agreement; provided that any rights of such Terminated Lender
to indemnification under this Agreement (including under subsections 2.6D, 2.7,
3.6, 10.2 and 10.3) shall survive as to such Terminated Lender.
2.11 Certain Provisions Regarding Determination of Dollar Equivalent.
A. For purposes of calculating the Total Utilization of Revolving Loan
Commitments, (i) the Equivalent U.S. $ Amount for Canadian Dollars shall be
calculated by Administrative Agent on the second Business Day of each week or,
more frequently, in the discretion of Administrative Agent, and (ii) the
Equivalent U.S. $ Amount for Canadian Dollars shall remain in effect until the
same is recalculated by the Administrative Agent as provided above and notice of
such recalculation is received by Company, it being understood that until such
notice is received, for purposes of calculating the Total Utilization of
Revolving Loan Commitments, the Equivalent U.S. $ Amount shall be that
Equivalent U.S. $ Amount as last reported to Company by the Administrative
Agent. Administrative Agent shall promptly notify Company and the Lenders of
each determination of the Equivalent U.S. $ Amount.
B. For purposes of determining pro rata allocations and "Pro Rata Share"
for purposes of payments or commitment reductions, or determining "Requisite
Class Lenders" or "Required Lenders", all Obligations and Commitments
denominated in Canadian Dollars shall be converted on a hypothetical basis to
Dollars at the Equivalent U.S. $ Amount for
63
such currency as then in effect. Such hypothetical conversion shall be done only
for the purposes described above in this subsection 2.11B and shall not affect
the obligations of Company to repay an Obligation in the currency in which such
obligation is denominated.
C. For purposes of applying amounts received under the Loan Documents,
Administrative Agent receiving amounts under the Credit Documents on behalf of
Lenders may convert currencies so that payments are made in the currency in
which the obligation is denominated hereunder. Such conversion shall be made at
the rate at which Administrative Agent could purchase currency in which the
Obligation is denominated with the currency received by Administrative Agent
hereunder at or about 10:00 am (local time in the city in which such currency is
received) on the date payment to Lenders are to be made. Such right of
Administrative Agent shall not affect the obligations of Company to repay an
Obligation in the currency in which such obligation is denominated.
SECTION 3.
LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.
A. Letters of Credit. In addition to Company requesting that Lenders make
Revolving Loans pursuant to subsection 2.1A(iii) and that Swing Line Lender make
Swing Line Loans pursuant to subsection 2.1A(iv), Company may request, in
accordance with the provisions of this subsection 3.1, from time to time during
the period from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date, that one or more Lenders having Revolving Loan Exposure issue
Letters of Credit for the account of Company for the purposes specified in the
definitions of Commercial Letters of Credit and Standby Letters of Credit;
provided that all such Commercial Letters of Credit shall provide for sight
drawings. Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of Company herein set forth, any one or
more of such Lenders may, but (except as provided in subsection 3.1B(ii)) shall
not be obligated to, issue such Letters of Credit in accordance with the
provisions of this subsection 3.1; provided that Company shall not request that
any such Lender issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such issuance, the
Total Utilization of Revolving Loan Commitments would exceed the Revolving
Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $20,000,000;
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (a) five Business Days prior to the Revolving Loan
Commitment Termination Date and (b) the date which is one year from the
date of issuance of such Standby Letter of Credit; provided that the
immediately preceding clause (b) shall not prevent any Issuing Lender from
agreeing that a Standby Letter of Credit will automatically be extended for
one or more successive periods not to exceed one year each unless such
Issuing Lender elects not to extend for any such additional period; and
provided, further that such Issuing Lender shall elect not to extend such
Standby Letter of Credit if it has knowledge that an Event of Default has
occurred and is continuing (and has not been waived in accordance with
subsection 10.6) at the time
64
such Issuing Lender must elect whether or not to allow such extension; or
(iv) any Commercial Letter of Credit having an expiration date (a)
later than the earlier of (X) the date which is 30 days prior to the
Revolving Loan Commitment Termination Date and (Y) the date which is 180
days from the date of issuance of such Commercial Letter of Credit or (b)
that is otherwise unacceptable to the applicable Issuing Lender in its
reasonable discretion.
B. Mechanics of Issuance.
(i) Request for Issuance. Whenever Company desires the issuance of a
Letter of Credit, it shall deliver to Administrative Agent a Request for
Issuance of Letter of Credit substantially in the form of Exhibit III
annexed hereto no later than 12:00 Noon (Toronto time) at least three
Business Days (in the case of Standby Letters of Credit) or five Business
Days (in the case of Commercial Letters of Credit), or in each case such
shorter period as may be agreed to by the Issuing Lender in any particular
instance, in advance of the proposed date of issuance. The Request for
Issuance of Letter of Credit shall specify (a) the proposed date of
issuance (which shall be a Business Day), (b) whether the Letter of Credit
is to be a Standby Letter of Credit or a Commercial Letter of Credit, (c)
the face amount of the Letter of Credit, (d) in the case of a Letter of
Credit which Company requests to be denominated in a currency other than
Dollars, the currency in which Company requests such Letter of Credit to be
issued, (e) the expiration date of the Letter of Credit, (f) the name and
address of the beneficiary, and (g) either the verbatim text of the
proposed Letter of Credit or the proposed terms and conditions thereof,
including a precise description of any documents to be presented by the
beneficiary which, if presented by the beneficiary prior to the expiration
date of the Letter of Credit, would require the Issuing Lender to make
payment under the Letter of Credit; provided that the Issuing Lender, in
its reasonable discretion, may require changes in the text of the proposed
Letter of Credit or any such documents; and provided, further that no
Letter of Credit shall require payment against a conforming draft to be
made thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to which such draft
is required to be presented is located) that such draft is presented if
such presentation is made after 10:00 A.M. (in the time zone of such office
of the Issuing Lender) on such business day.
Company shall notify the applicable Issuing Lender (and Administrative
Agent, if Administrative Agent is not such Issuing Lender) prior to the
issuance of any Letter of Credit in the event that any of the matters to
which Company is required to certify in the applicable Request for Issuance
of Letter of Credit is no longer true and correct as of the proposed date
of issuance of such Letter of Credit, and upon the issuance of any Letter
of Credit Company shall be deemed to have re-certified, as of the date of
such issuance, as to the matters to which Company is required to certify in
the applicable Request for Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by Administrative
Agent of a Request for Issuance of Letter of Credit pursuant to subsection
3.1B(i) requesting the issuance of a Letter of Credit, in the event
Administrative Agent elects to issue such Letter of Credit, Administrative
Agent shall promptly so notify Company, and Administrative Agent shall be
the Issuing Lender with respect thereto. In the event that Administrative
Agent, in its sole discretion, elects not to issue such
65
Letter of Credit, Administrative Agent shall promptly so notify Company,
whereupon Company may request any other Lender having Revolving Loan
Exposure to issue such Letter of Credit by delivering to such Lender a copy
of the applicable Request for Issuance of Letter of Credit. Any Lender so
requested to issue such Letter of Credit shall promptly notify Company and
Administrative Agent whether or not, in its sole discretion, it has elected
to issue such Letter of Credit, and any such Lender which so elects to
issue such Letter of Credit shall be the Issuing Lender with respect
thereto. In the event that all other Lenders having Revolving Loan Exposure
shall have declined to issue such Letter of Credit, notwithstanding the
prior election of Administrative Agent not to issue such Letter of Credit,
Administrative Agent shall be obligated to issue such Letter of Credit and
shall be the Issuing Lender with respect thereto, notwithstanding the fact
that the Letter of Credit Usage with respect to such Letter of Credit and
with respect to all other Letters of Credit issued by Administrative Agent,
when aggregated with Administrative Agent's outstanding Revolving Loans and
Swing Line Loans, may exceed Administrative Agent's Revolving Loan
Commitment then in effect; provided that Administrative Agent shall not be
obligated to issue any Letter of Credit denominated in a foreign currency
which in the judgment of Administrative Agent is not readily and freely
available.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
accordance with subsection 10.6) of the conditions set forth in subsection
4.3, the Issuing Lender shall issue the requested Letter of Credit in
accordance with the Issuing Lender's standard operating procedures.
(iv) Notification to Lenders. Upon the issuance of any Letter of
Credit the applicable Issuing Lender shall promptly notify Administrative
Agent and each other Lender of such issuance, which notice shall be
accompanied by a copy of such Letter of Credit. Promptly after receipt of
such notice (or, if Administrative Agent is the Issuing Lender, together
with such notice), Administrative Agent shall notify each Lender having
Revolving Loan Exposure of the amount of such Lender's respective
participation in such Letter of Credit, determined in accordance with
subsection 3.1C.
(v) Reports to Lenders. Within 15 days after the end of each calendar
quarter ending after the Closing Date, so long as any Letter of Credit
shall have been outstanding during such calendar quarter, each Issuing
Lender shall deliver to each other Lender having Revolving Loan Exposure a
report setting forth for such calendar quarter the daily aggregate amount
available to be drawn under the Letters of Credit issued by such Issuing
Lender that were outstanding during such calendar quarter.
C. Lenders' Purchase of Participations in Letters of Credit. Immediately
upon the issuance of each Letter of Credit, and as of the Closing Date with
respect to each Existing Letter of Credit, each Lender having Revolving Loan
Exposure shall be deemed to, and hereby agrees to, have irrevocably purchased
from the Issuing Lender a participation in such Letter of Credit and any
drawings honored thereunder in an amount equal to such Lender's Pro Rata Share
of the maximum amount which is or at any time may become available to be drawn
thereunder.
3.2 Letter of Credit Fees.
Company agrees to pay the following amounts with respect to Letters of
Credit issued hereunder:
66
(i) with respect to each Standby Letter of Credit, (a) a fronting fee,
payable directly to the applicable Issuing Lender for its own account,
equal to .125% per annum of the daily amount available to be drawn under
such Standby Letter of Credit and (b) a letter of credit fee, payable to
Administrative Agent for the account of Lenders having Revolving Loan
Exposure, equal to 1.00% per annum of the daily amount available to be
drawn under such Standby Letter of Credit, each such fronting fee or letter
of credit fee to be payable in arrears on and to (but excluding) each March
1, June 1, September 1 and December 1 of each year and computed on the
basis of a 360-day year for the actual number of days elapsed;
(ii) with respect to each Commercial Letter of Credit, (a) a fronting
fee, payable directly to the applicable Issuing Lender for its own account,
equal to .125% per annum of the daily amount available to be drawn under
such Commercial Letter of Credit and (b) a letter of credit fee, payable to
Administrative Agent for the account of Lenders having Revolving Loan
Exposure, equal to 1.00% per annum of the daily amount available to be
drawn under such Commercial Letter of Credit, each such fronting fee or
letter of credit fee to be payable in arrears on and to (but excluding)
each March 1, June 1, September 1 and December 1 of each year and computed
on the basis of a 360-day year for the actual number of days elapsed; and
(iii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clauses (i) and (ii) above),
documentary and processing charges payable directly to the applicable
Issuing Lender for its own account in accordance with such Issuing Lender's
standard schedule for such charges in effect at the time of such issuance,
amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 3.2, (1) the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination and (2) any amount described in such clauses which is denominated
in a currency other than Dollars shall be valued based on the applicable
Exchange Rate for such currency as of the applicable date of determination.
Promptly upon receipt by Administrative Agent of any amount described in clause
(i)(b) or (ii)(b) of this subsection 3.2, Administrative Agent shall distribute
to each such Lender its Pro Rata Share of such amount.
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
A. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. Reimbursement by Company of Amounts Paid Under Letters of Credit. In the
event an Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "Reimbursement Date") in an amount in Dollars (which amount, in the
case of a drawing under a Letter of Credit which is
67
denominated in a currency other than Dollars, shall be calculated by reference
to the applicable Exchange Rate) and in same day funds equal to the amount of
such honored drawing; provided that, anything contained in this Agreement to the
contrary notwithstanding, (i) unless Company shall have notified Administrative
Agent and such Issuing Lender prior to 10:00 A.M. (Toronto time) on the date
such drawing is honored that Company intends to reimburse such Issuing Lender
for the amount of such honored drawing with funds other than the proceeds of
Revolving Loans, Company shall be deemed to have given a timely Notice of
Borrowing to Administrative Agent requesting Lenders to make Revolving Loans
that are Base Rate Loans on the Reimbursement Date in an amount in Dollars
(which amount, in the case of a drawing under a Letter of Credit which is
denominated in a currency other than Dollars, shall be calculated by reference
to the applicable Exchange Rate) equal to the amount of such honored drawing and
(ii) subject to satisfaction or waiver of the conditions specified in subsection
4.2B, Lenders shall, on the Reimbursement Date, make Revolving Loans that are
Base Rate Loans in the amount of such honored drawing, the proceeds of which
shall be applied directly by Administrative Agent to reimburse such Issuing
Lender for the amount of such honored drawing; and provided, further that if for
any reason proceeds of Revolving Loans are not received by such Issuing Lender
on the Reimbursement Date in an amount equal to the amount of such honored
drawing, Company shall reimburse such Issuing Lender, on demand, in an amount in
same day funds equal to the excess of the amount of such honored drawing over
the aggregate amount of such Revolving Loans, if any, which are so received.
Nothing in this subsection 3.3B shall be deemed to relieve any Lender from its
obligation to make Revolving Loans on the terms and conditions set forth in this
Agreement, and Company shall retain any and all rights it may have against any
Lender resulting from the failure of such Lender to make such Revolving Loans
under this subsection 3.3B.
68
C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters of Credit.
(i) Payment by Lenders. In the event that Company shall fail for any
reason to reimburse any Issuing Lender as provided in subsection 3.3B in an
amount (calculated, in the case of a drawing under a Letter of Credit
denominated in a currency other than Dollars, by reference to the
applicable Exchange Rate) equal to the amount of any drawing honored by
such Issuing Lender under a Letter of Credit issued by it, such Issuing
Lender shall promptly notify each other Lender having Revolving Loan
Exposure of the unreimbursed amount of such honored drawing and of such
other Lender's respective participation therein based on such Lender's Pro
Rata Share. Each Lender having Revolving Loan Exposure shall make available
to such Issuing Lender an amount equal to its respective participation, in
Dollars and in same day funds, at the office of such Issuing Lender
specified in such notice, not later than 12:00 Noon (Toronto time) on the
first business day (under the laws of the jurisdiction in which such office
of such Issuing Lender is located) after the date notified by such Issuing
Lender. In the event that any Lender having Revolving Loan Exposure fails
to make available to such Issuing Lender on such business day the amount of
such Lender's participation in such Letter of Credit as provided in this
subsection 3.3C, such Issuing Lender shall be entitled to recover such
amount on demand from such Lender together with interest thereon at the
rate customarily used by such Issuing Lender for the correction of errors
among banks for three Business Days and thereafter at the Base Rate.
Nothing in this subsection 3.3C shall be deemed to prejudice the right of
any such other Lender to recover from any Issuing Lender any amounts made
available by such Lender to such Issuing Lender pursuant to this subsection
3.3C in the event that it is determined by the final judgment of a court of
competent jurisdiction that the payment with respect to a Letter of Credit
by such Issuing Lender in respect of which payment was made by such Lender
constituted gross negligence or willful misconduct on the part of such
Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From Company.
In the event any Issuing Lender shall have been reimbursed by other Lenders
pursuant to subsection 3.3C(i) for all or any portion of any drawing
honored by such Issuing Lender under a Letter of Credit issued by it, such
Issuing Lender shall distribute to each other Lender which has paid all
amounts payable by it under subsection 3.3C(i) with respect to such honored
drawing such other Lender's Pro Rata Share of all payments subsequently
received by such Issuing Lender from Company in reimbursement of such
honored drawing when such payments are received. Any such distribution
shall be made to a Lender at its primary address set forth below its name
on the appropriate signature page hereof or at such other address as such
Lender may request.
69
D. Interest on Amounts Paid Under Letters of Credit.
(i) Payment of Interest by Company. Company agrees to pay to each
Issuing Lender, with respect to drawings honored under any Letters of
Credit issued by it, interest on the amount paid by such Issuing Lender in
respect of each such honored drawing from the date such drawing is honored
to but excluding the date such amount is reimbursed by Company (including
any such reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B) at a rate equal to (a) for the period from the date such
drawing is honored to but excluding the Reimbursement Date, the rate then
in effect under this Agreement with respect to Revolving Loans that are
Base Rate Loans and (b) thereafter, a rate which is (1) to the extent
permitted by applicable law, 2% per annum in excess of the rate of interest
otherwise payable under this Agreement with respect to Revolving Loans that
are Base Rate Loans and (2) to the extent the increased rate under clause
(1) above is not permitted by applicable law, at the interest rate
otherwise payable under this Agreement with respect to Revolving Loans
which are Base Rate Loans. Interest payable pursuant to this subsection
3.3D(i) shall be computed on the basis of a 365-day or 366-day year, as the
case may be, for the actual number of days elapsed in the period during
which it accrues and shall be payable on demand or, if no demand is made,
on the date on which the related drawing under a Letter of Credit is
reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender. Promptly
upon receipt by any Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i) with respect to a drawing honored under a Letter of
Credit issued by it, (a) such Issuing Lender shall distribute to each other
Lender having Revolving Loan Exposure, out of the interest received by such
Issuing Lender in respect of the period from the date such drawing is
honored to but excluding the date on which such Issuing Lender is
reimbursed for the amount of such drawing (including any such reimbursement
out of the proceeds of Revolving Loans pursuant to subsection 3.3B), the
amount that such other Lender would have been entitled to receive in
respect of the letter of credit fee that would have been payable in respect
of such Letter of Credit for such period pursuant to subsection 3.2 if no
drawing had been honored under such Letter of Credit, and (b) in the event
such Issuing Lender shall have been reimbursed by other Lenders pursuant to
subsection 3.3C(i) for all or any portion of such honored drawing, such
Issuing Lender shall distribute to each other Lender which has paid all
amounts payable by it under subsection 3.3C(i) with respect to such honored
drawing such other Lender's Pro Rata Share of any interest received by such
Issuing Lender in respect of that portion of such honored drawing so
reimbursed by other Lenders for the period from the date on which such
Issuing Lender was so reimbursed by other Lenders to but excluding the date
on which such portion of such honored drawing is reimbursed by Company. Any
such distribution shall be made to a Lender at its primary address set
forth below its name on the appropriate signature page hereof or at such
other address as such Lender may request.
70
3.4 Obligations Absolute.
The obligation of Company to reimburse each Issuing Lender for drawings
honored under the Letters of Credit issued by it and to repay any Revolving
Loans made by Lenders pursuant to subsection 3.3B and the obligations of Lenders
under subsection 3.3C(i) shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right which
Company or any Lender may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), any Issuing Lender or other Lender or any other
Person or, in the case of a Lender, against Company, whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Company or one of
its Subsidiaries and the beneficiary for which any Letter of Credit was
procured);
(iii) any draft or other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect;
(iv) payment by the applicable Issuing Lender under any Letter of
Credit against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or any
of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by any
party thereto;
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
71
3.5 Indemnification; Nature of Issuing Lenders' Duties.
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions herein called
"Governmental Acts").
B. Nature of Issuing Lenders' Duties. As between Company and any Issuing
Lender, Company assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by such Issuing Lender by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of such Issuing Lender, including any Governmental Acts, and none of the
above shall affect or impair, or prevent the vesting of, any of such Issuing
Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this subsection 3.5,
Company shall retain any and all rights it may have against any Issuing Lender
for any liability arising solely out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
72
3.6 Increased Costs and Taxes Relating to Letters of Credit.
Subject to the provisions of subsection 2.7B (which shall be controlling
with respect to the matters covered thereby), in the event that any Issuing
Lender or Lender shall determine (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) that any
law, treaty or governmental rule, regulation or order, or any change therein or
in the interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by any Issuing Lender or
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its applicable lending
or letter of credit office) to any additional Tax (other than any addition
resulting from a higher rate of, or from a change in the calculation of,
income or capital tax relating to such Lender's or such Issuing Lender's
income or capital in general) with respect to the issuing or maintaining of
any Letters of Credit or the purchasing or maintaining of any
participations therein or any other obligations under this Section 3,
whether directly or by such being imposed on or suffered by any particular
Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, CDIC insurance, FDIC insurance or similar
requirement in respect of any Letters of Credit issued by any Issuing
Lender or participations therein purchased by any Lender; or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Issuing Lender or Lender (or its applicable
lending or letter of credit office) regarding this Section 3 or any Letter
of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender or
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate such Issuing
Lender or Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall deliver to Company a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Issuing Lender or Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
3.7 Existing Letters of Credit.
Notwithstanding anything to the contrary herein, as of the Closing Date,
all of the Existing Letters of Credit shall be deemed to be Letters of Credit
issued hereunder and shall be subject to all of the terms and provisions of this
Agreement, including all terms and provisions applicable to Letters of Credit
under this Agreement. Each Lender having
73
Revolving Loan Exposure agrees that its obligations with respect to Letters of
Credit pursuant to subsection 3.3C shall include the Existing Letters of Credit
as of the Closing Date. With respect to each Existing Letter of Credit, for the
period commencing on the Closing Date to and including the expiration date of
any such Existing Letter of Credit, Company shall pay all fees and commissions
set forth in subsection 3.2 at the times and in the manner set forth therein.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of Letters of
Credit hereunder are subject to the satisfaction of the following conditions.
4.1 Conditions to Term Loans and Initial Revolving Loans and Swing Line Loans.
The obligations of Lenders to make the Term Loans and any Revolving Loans
to be made on the Closing Date are, in addition to the conditions precedent
specified in subsection 4.2, subject to prior or concurrent satisfaction of the
following conditions:
A. Loan Party Documents. On or before the Closing Date, Company shall, and
shall cause each other Loan Party to, deliver to Lenders (or to Administrative
Agent for Lenders with sufficient originally executed copies, where appropriate,
for each Lender and its counsel) the following with respect to Company or such
Loan Party, as the case may be, each, unless otherwise noted, dated the Closing
Date:
(i) Certified copies of the Certificate or Articles of Incorporation
of such Person, together with a good standing certificate from its
jurisdiction of incorporation and each other state, province or other
jurisdiction in which such Person is qualified as a foreign corporation to
do business and, to the extent requested by Administrative Agent or
Syndication Agent a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the appropriate
taxing authority of each of such jurisdictions, each dated a recent date
prior to the Closing Date;
(ii) Copies of the Bylaws of such Person, Memoranda and Articles of
Association or equivalent governing documents, certified as of the Closing
Date by such Person's corporate secretary or an assistant secretary;
(iii) Resolutions of the Board of Directors (and, where appropriate,
of the shareholders) of such Person approving and authorizing the
execution, delivery and performance of the Loan Documents and Related
Agreements to which it is a party, certified as of the Closing Date by the
corporate secretary or an assistant secretary of such Person as being in
full force and effect without modification or amendment;
(iv) Signature and incumbency certificates of the officers of such
Person executing the Loan Documents to which it is a party;
(v) Executed originals of the Loan Documents to which such Person is a
party; and
74
(vi) Such other documents as Syndication Agent or Administrative Agent
may reasonably request.
B. No Material Adverse Effect. Since September 30, 1997 there shall not
have been (x) any adverse change, or any development involving a prospective
adverse change, in or affecting the general affairs, industry, management,
financial position, or results of operations of Company and its Subsidiaries
taken as a whole or (y) any information submitted to Syndication Agent or
Administrative Agent that proves to have been inaccurate, incomplete or
misleading, and which, in the case of either clause (x) or (y), Syndication
Agent or Administrative Agent, in their reasonable judgment, deem material.
C. Corporate and Capital Structure, Ownership, Management, Etc.
(i) Corporate Structure. The corporate structure of Company, the
Plessey Entities and their respective Subsidiaries after giving effect to
the Acquisition, and all the organizational documents of Company, the
Plessey Entities and their respective Subsidiaries shall be reasonably
satisfactory to Syndication Agent and Administrative Agent.
(ii) Capital Structure and Ownership. The capital structure and
ownership of Company and the Plessey Entities and their respective
Subsidiaries, both before and after giving effect to the Acquisition and
shall be as set forth on Schedule 4.1C annexed hereto.
(iii) Management; Employment Contracts. The management structure of
Company after giving effect to the Acquisition shall be as set forth on
Schedule 4.1C annexed hereto, and Administrative Agent shall have received
copies of, and shall be satisfied with the form and substance of, any and
all employment contracts with senior management of Company.
D. Related Agreements; Certificate of Designations. Syndication Agent and
Administrative Agent shall have received a fully executed or conformed copy of
each Related Agreement and the Certificate of Designations and any documents
executed in connection with the consummation of the transactions contemplated
thereby and each Related Agreement and the Certificate of Designations shall be
in full force and effect and no provision thereof shall have been modified or
waived in any respect reasonably determined by Syndication Agent or
Administrative Agent to be material, in each case without the consent of
Administrative Agent and Syndication Agent.
75
E. Matters Relating to Existing Indebtedness.
(i) Termination of Existing Credit Agreements and Related Liens;
Existing Letters of Credit. On the Closing Date, Company and its
Subsidiaries shall have (a) repaid in full all Indebtedness outstanding
under the Existing Credit Agreements (other than that portion of the
Existing Indebtedness permitted remain outstanding hereunder as reflected
on Schedule 7.1 annexed hereto), (b) terminated any commitments to lend or
make other extensions of credit thereunder, (c) delivered to Administrative
Agent all documents or instruments necessary to release all Liens securing
Indebtedness or other obligations of Company and its Subsidiaries
thereunder, and (d) made arrangements satisfactory to Syndication Agent and
Administrative Agent with respect to the cancellation of any letters of
credit outstanding thereunder unless permitted or the issuance of Letters
of Credit to support the obligations of Company and its Subsidiaries with
respect thereto.
(ii) Existing Indebtedness to Remain Outstanding. Administrative Agent
shall have received an Officers' Certificate of Company stating that, after
giving effect to the transactions described in this subsection 4.1E, the
Indebtedness of Loan Parties and the Plessey Entities (other than
Indebtedness under the Loan Documents) shall consist of (a) approximately
(pound)35,000,000 in aggregate principal amount of outstanding Indebtedness
described in Part I of Schedule 7.1 annexed hereto and (b) Indebtedness in
an aggregate amount not to exceed $60,000,000 in respect of Capital Leases
described in Part II of Schedule 7.1 annexed hereto. The terms and
conditions of all such Indebtedness shall be in form and in substance
satisfactory to Administrative Agent, Syndication Agent and Requisite
Lenders.
F. Necessary Governmental Authorizations and Consents; Expiration of
Waiting Periods, Etc. Company and its Subsidiaries shall have obtained all
Governmental Authorizations and all consents of other Persons, in each case that
are necessary or advisable in connection with the Acquisition, the other
transactions contemplated by the Loan Documents and the Related Agreements, and
the continued operation of the business conducted by Company, the Plessey
Entities and their respective Subsidiaries in substantially the same manner as
conducted prior to the consummation of the Acquisition, and each of the
foregoing shall be in full force and effect, in each case other than those the
failure to obtain or maintain which, either individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect. All
applicable waiting periods shall have expired without any action being taken or
threatened by any competent authority which would restrain, prevent or otherwise
impose adverse conditions on the Acquisition or the financing thereof. No
action, request for stay, petition for review or rehearing, reconsideration, or
appeal with respect to any of the foregoing shall be pending, and the time for
any applicable agency to take action to set aside its consent on its own motion
shall have expired.
G. Consummation of Acquisition.
(i) The structure of the Acquisition shall be reasonably satisfactory
to Syndication Agent and Administrative Agent pursuant to documentation,
including, without limitation, the Acquisition Agreement, reasonably
satisfactory to Syndication Agent and Administrative Agent and all
conditions to the Acquisition contained in such documentation shall have
been satisfied or the fulfillment of such conditions shall have been waived
with the consent of Syndication Agent and Administrative Agent.
76
(ii) the Acquisition Agreement shall be in full force and effect in
all material respects and concurrently with the Closing Date the
Acquisition shall have become effective in accordance with the terms of the
Acquisition Agreement;
(iii) The aggregate cash consideration paid to the holders of equity
interests in the Plessey Entities in respect of such equity interests in
connection with the Acquisition shall not exceed $225,000,000;
(iv) Transaction Costs shall not exceed $15,000,000, and
Administrative Agent shall have received evidence to its satisfaction to
such effect;
(v) Administrative Agent shall have received an Officers' Certificate
of Company to the effect set forth in clauses (i)-(iv) above and stating
that Company will proceed to consummate the Acquisition immediately upon
the making of the initial Loans; and
(vi) all security interests in and Liens on the assets of the Plessey
Entities shall have been terminated and released other than Permitted
Encumbrances and Administrative Agent shall have received all such releases
and evidence thereof as may have been requested by Administrative Agent or
Syndication Agent, which releases shall be in form and substance
satisfactory to Syndication Agent.
H. Closing Date Mortgages; Closing Date Mortgage Policies; Environmental
Indemnity; Etc. Administrative Agent shall have received from Company and each
applicable Subsidiary Guarantor:
(i) Closing Date Mortgages. Fully executed and notarized Mortgages,
debentures or equivalent agreements reasonably satisfactory to
Administrative Agent and Syndication Agent (each a "Closing Date Mortgage"
and, collectively, the "Closing Date Mortgages"), in proper form for
recording in all appropriate places in all applicable jurisdictions,
encumbering each Real Property Asset listed in Schedule 4.1H annexed hereto
(each a "Closing Date Mortgaged Property" and, collectively, the "Closing
Date Mortgaged Properties");
(ii) Opinions of Local Counsel. Subject to the provisions of
subsection 6.10B with respect to the Bromont Property, an opinion of
counsel (which counsel shall be reasonably satisfactory to Administrative
Agent) in each state, province or other jurisdiction in which a Closing
Date Mortgaged Property is located with respect to the enforceability of
the form(s) of Closing Date Mortgages to be recorded in such state,
province or other jurisdiction and such other matters as Administrative
Agent or Syndication Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Administrative Agent and Syndication
Agent;
(iii) Landlord Consents and Estoppels; Recorded Leasehold Interests.
In the case of each Closing Date Mortgaged Property located in the United
States of America consisting of a Leasehold Property, (a) a Landlord
Consent and Estoppel with respect thereto and (b) evidence that such
Leasehold Property is a Recorded Leasehold Interest;
(iv) Title Insurance. With respect to any Closing Date Mortgaged
Property
77
located in the United States of America, (a) ALTA mortgagee title insurance
policies or unconditional commitments therefor or equivalent policies or
commitments reasonably satisfactory to Administrative Agent and Syndication
Agent (the "Closing Date Mortgage Policies") issued by the Title Company
with respect to the Closing Date Mortgaged Properties listed in Part A of
Schedule 4.1H annexed hereto, in amounts not less than the respective
amounts designated therein with respect to any particular Closing Date
Mortgaged Properties, insuring fee simple title to, or a valid leasehold
interest in, as the case may be, each such Closing Date Mortgaged Property
vested in such Loan Party and assuring Administrative Agent that the
applicable Closing Date Mortgages create valid and enforceable First
Priority mortgage Liens on the respective Closing Date Mortgaged Properties
encumbered thereby, subject only to a standard survey exception, which
Closing Date Mortgage Policies (1) shall include an endorsement for
mechanics' liens, for future advances under this Agreement and for any
other matters reasonably requested by Administrative Agent or Syndication
Agent and (2) shall provide for affirmative insurance and such reinsurance
as Administrative Agent or Syndication Agent may reasonably request, all of
the foregoing in form and substance reasonably satisfactory to
Administrative Agent and Syndication Agent; and (b) evidence satisfactory
to Administrative Agent and Syndication Agent that such Loan Party has (i)
delivered to the Title Company all certificates and affidavits required by
the Title Company in connection with the issuance of the Closing Date
Mortgage Policies and (ii) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title Company in
connection with the issuance of the Closing Date Mortgage Policies and all
recording and stamp taxes (including mortgage recording and intangible
taxes) payable in connection with recording the Closing Date Mortgages in
the appropriate real estate records;
(v) Title Reports. With respect to each Closing Date Mortgaged
Property listed in Part B of Schedule 4.1H annexed hereto, a title report
issued by the Title Company with respect thereto (or title certificate,
report on title or equivalent report with respect to any such Closing Date
Mortgaged Property located outside the United States of America), dated not
more than 30 days prior to the Closing Date and satisfactory in form and
substance to Administrative Agent and Syndication Agent;
(vi) Copies of Documents Relating to Title Exceptions. Copies of all
recorded documents listed as exceptions to title in the Closing Date
Mortgage Policies or in the title reports or title certificates delivered
pursuant to subsection 4.1H(v);
(vii) Matters Relating to U.S. Flood Hazard Properties. With respect
to any Closing Date Mortgaged Property located in the United States of
America, (a) evidence, which may be in the form of a letter from an
insurance broker or a municipal engineer, as to whether (1) any Closing
Date Mortgaged Property is a Flood Hazard Property and (2) the community in
which any such Flood Hazard Property is located is participating in the
National Flood Insurance Program, (b) if there are any such Flood Hazard
Properties, such Loan Party's written acknowledgement of receipt of written
notification from Administrative Agent (1) as to the existence of each such
Flood Hazard Property and (2) as to whether the community in which each
such Flood Hazard Property is located is participating in the National
Flood Insurance Program, and (c) in the event any such Flood Hazard
Property is located in a community that participates in the National Flood
Insurance Program, evidence that Company has obtained flood insurance in
respect of such Flood Hazard Property to the extent
78
required under the applicable regulations of the Board of Governors of the
Federal Reserve System;
(viii) Real Property Taxes. Evidence satisfactory to the
Administrative Agent and Syndication Agent of the payment by Company of all
unpaid real property taxes due and payable as of the Closing Date in
respect of Closing Date Mortgaged Properties in which Company or any of its
Subsidiaries has a fee simple title or a freehold interest;
(ix) Special U.K. Matters. Delivery to Administrative Agent of (i) the
results of H.M. Land Registry clear priority searches in form 94B in favor
of the Administrative Agent giving a priority period of not less than 28
days relating to Real Property Assets located in the United Kingdom owned
by any Loan Party or Plessey Entity or Subsidiary thereof or (in the case
of unregistered property) H.M. Land Charges Registry searches having an
unexpired priority period of not less than 28 days in respect of all estate
owners since the date of the root of title with any entries thereon
certified as not affecting, (ii) a duly completed and signed Land Registry
application form A4 for the registration of the U.K. Guarantee and
Debenture together with a cheque made payable to H.M. Land Registry in
respect of the registration fee, (iii) all title deeds to the property
located in Wales and identified on Schedule 4.1H annexed hereto, and (iv)
signed but undated Notices of Charge addressed to the landlord of each
Leasehold Property of Mitel Telecom together with a duplicate thereof; and
(x) Environmental Indemnity . If requested by Administrative Agent or
Syndication Agent, an environmental indemnity agreement, satisfactory in
form and substance to Administrative Agent, Syndication Agent and their
respective counsel, with respect to the indemnification of Administrative
Agent and Lenders for any liabilities that may be imposed on or incurred by
any of them as a result of any Hazardous Materials Activity.
I. Security Interests in Collateral. To the extent not otherwise satisfied
pursuant to subsection 4.1H, each of Syndication Agent and Administrative Agent
shall have received evidence satisfactory to it that Company and Subsidiary
Guarantors shall have taken or caused to be taken all such actions, executed and
delivered or caused to be executed and delivered all such agreements, documents
and instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clauses (iii), (iv)
and (v) below) that may be necessary or, in the opinion of Administrative Agent
and Syndication Agent, desirable in order to charge or create in favor of
Administrative Agent, for the benefit of Lenders, a valid and (upon such filing
and recording) perfected First Priority security interest in or first ranking
mortgage, hypothec or charge on the entire Collateral, subject only to Permitted
Encumbrances. Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to Administrative
Agent of accurate and complete schedules to all of the applicable
Collateral Documents.
(ii) Stock Certificates and Instruments. Delivery to Administrative
Agent of (a) certificates (which certificates shall be accompanied by
irrevocable undated stock powers, duly endorsed in blank and otherwise
satisfactory in form and substance to Administrative Agent) representing
all capital stock pledged pursuant to the Company Master Pledge Agreement,
the Subsidiary Pledge Agreements (U.S.), the U.K. Guarantee and Debenture
and (b) all promissory notes (including any Intercompany
79
Notes) or, to the extent required to be delivered to Administrative Agent
pursuant to the terms of the Collateral Documents, other instruments (in
each case duly endorsed, where appropriate, in a manner satisfactory to
Administrative Agent) evidencing any Collateral;
(iii) Lien Searches and Termination Statements. Delivery to
Administrative Agent of (a) the results of a recent search by a Person
satisfactory to Administrative Agent, of all effective personal property
financing statements, fixture filings or other similar filings and all
judgment and tax lien filings which may have been made with respect to any
personal or mixed property of any Loan Party, together with copies of all
such filings disclosed by such search, and (b) termination statements or
other discharges, as applicable, duly executed by all applicable Persons
for filing in all applicable jurisdictions as may be necessary to terminate
any effective personal property financing statements, fixture filings or
other similar filings disclosed in such search (other than any such
personal property financing statements, fixture filings or other similar
flings in respect of Liens permitted to remain outstanding pursuant to the
terms of this Agreement);
(iv) Financing Statements and Fixture Filings. Delivery to
Administrative Agent of personal property financing statements and, where
appropriate, fixture filings, and other similar filings duly executed by
each applicable Loan Party with respect to all personal and mixed property
Collateral of such Loan Party, for filing in all jurisdictions as may be
necessary or, in the opinion of Syndication Agent and Administrative Agent,
desirable to perfect the security interests created in such Collateral
pursuant to the Collateral Documents;
(v) IP Collateral Filings. Delivery to Administrative Agent of all
cover sheets or other documents or instruments required to be filed with
the PTO, the United States Copyright Office or equivalent authorities in
order to create or perfect Liens in respect of any IP Collateral; and
(vi) Opinions of Local Counsel. Delivery to Administrative Agent of an
opinion of counsel (which counsel shall be reasonably satisfactory to
Syndication Agent and Administrative Agent) under the laws of each
jurisdiction in which any Loan Party or any personal or mixed property
Collateral is located with respect to the creation and perfection of the
security interests in favor of Administrative Agent in such Collateral and
such other matters governed by the laws of such jurisdiction regarding such
security interests as Syndication Agent and Administrative Agent may
reasonably request, in each case in form and substance reasonably
satisfactory to Syndication Agent and Administrative Agent.
J. Certificates of Title. Administrative Agent shall have received a
Certificate of Title produced by Xxxxxxxxx and May or a Report on Title produced
by Xxxxxx Xxxxx relating to any interest owned by any of the Plessey Entities or
any of their respective Subsidiaries in any real property located in the United
Kingdom and in relation to the property located in Wales and identified on
Schedule 4.1H annexed hereto in a form reasonably satisfactory to the
Administrative Agent and Syndication Agent.
K. Environmental Reports. Administrative Agent shall have received reports
and other information, in form, scope and substance satisfactory to Syndication
Agent and Administrative Agent, regarding environmental matters relating to
Company, the Plessey
80
Entities and their respective Subsidiaries and the Facilities, which reports
shall include (i) a Phase I environmental assessment for each of the Facilities
listed in Schedule 4.1K annexed hereto (collectively, the "Phase I Report")
which (a) conforms to the ASTM Standard Practice for Environmental Site
Assessments: Phase I Environmental Site Assessment Process, E 1527, (b) was
conducted by one or more environmental consulting firms reasonably satisfactory
to Administrative Agent, (c) includes an assessment of asbestos-containing
materials at such Facilities, and (d) includes an estimate of the reasonable
worst-case cost of investigating and remediating any Hazardous Materials
Activity identified in the Phase I Report as giving rise to an actual or
potential violation of any Environmental Law or as presenting a material risk of
giving rise to a material Environmental Claim, and (ii) a current compliance
audit setting forth an assessment of Company's, each Plessey Entity's and their
respective Subsidiaries' and such Facilities' current and past compliance with
Environmental Laws and an estimate of the cost of rectifying any non-compliance
with current Environmental Laws identified therein and the cost of compliance
with reasonably anticipated future Environmental Laws identified therein.
L. Financial Statements; Pro Forma Balance Sheet. On or before the Closing
Date, Lenders shall have received from Company (i) each of the financial
statements listed in clauses (i) through (iv) of subsection 5.3 and, with
respect to the items listed in clauses (i) and (ii) of subsection 5.3, certified
by the chief financial officer of Company that they fairly present the financial
condition of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments, and
(ii) pro forma consolidated balance sheets of Company and its Subsidiaries as at
the Closing Date, reflecting the consummation of the Acquisition, the related
financings and the other transactions contemplated by the Loan Documents and the
Related Agreements, which pro forma financial statements shall be in form and
substance satisfactory to Lenders.
M. Financial Projections. Lenders shall have received from Company
financial projections for Company and its Subsidiaries after giving effect to
the Acquisition for a period of not less than six years following the Closing
Date, which financial projections shall be in form and substance satisfactory to
Syndication Agent and Administrative Agent.
N. Material Contracts. All Material Contracts, licenses, permits,
franchises, insurance policies and other intangible rights of Company, the
Plessey Entities and their respective Subsidiaries shall be reasonably
satisfactory to Syndication Agent and Administrative Agent.
O. Solvency Assurances. On the Closing Date, Administrative Agent,
Syndication Agent and Lenders shall have received (i) a letter from Houlihan,
Lokey, Xxxxxx & Xxxxx, dated the Closing Date and addressed to Syndication
Agent, Administrative Agent and Lenders, in form and substance satisfactory to
Syndication Agent and Administrative Agent and with appropriate attachments, and
(ii) a Financial Condition Certificate dated the Closing Date, substantially in
the form of Exhibit XII annexed hereto and with appropriate attachments, in each
case demonstrating that, after giving effect to the consummation of the
Acquisition, the related financings and the other transactions contemplated by
the Loan Documents and the Related Agreements, Company will be Solvent.
P. Evidence of Insurance. Syndication Agent and Administrative Agent shall
have received a certificate from Company's insurance broker or other evidence
satisfactory to Syndication Agent and Administrative Agent that all insurance
required to be maintained
81
pursuant to subsection 6.4 is in full force and effect and that Administrative
Agent on behalf of Lenders has been named as additional insured and/or loss
payee thereunder to the extent required under subsection 6.4.
Q. Opinions of Counsel to Loan Parties. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of Xxxxx Xxxx Xxxxx Constant & Xxxxxxxx, special
United States counsel for Loan Parties, XxXxxxxx Xxxxxxxx, special Canadian
counsel for Loan Parties, Xxxxxx Xxxxx, special British counsel for Loan
Parties, Xxxxxxxx & Xxxxx, special Swedish counsel for Loan Parties, Lang
Xxxxxxxx, special Ontario counsel for the Loan Parties, Xxxxx Xxxxxx, special
Barbadian counsel for the Loan Parties, Xxxxxx X. XxXxxxxx, general counsel to
Company, and Xxxxxx X. Xxxxxxxxxx, general counsel to the U.S. Loan Parties, in
form and substance reasonably satisfactory to Syndication Agent, Administrative
Agent and their respective counsel, dated as of the Closing Date and setting
forth substantially the matters in the opinions designated in Exhibits VIII-A,
VIII-B, VIII-C, VIII-D, VIII-E, VIII-F, VIII-G, and VIII-H, respectively,
annexed hereto and as to such other matters as Syndication Agent and
Administrative Agent acting on behalf of Lenders may reasonably request and (ii)
evidence satisfactory to Syndication Agent and Administrative Agent that Company
has requested such counsel to deliver such opinions to Lenders.
R. Opinions of Syndication Agents' Counsel. Lenders shall have received
originally executed copies of one or more favorable written opinions of
O'Melveny & Xxxxx LLP, counsel to Syndication Agent, dated as of the Closing
Date, substantially in the form of Exhibit IX annexed hereto and as to such
other matters as Syndication Agent acting on behalf of Lenders may reasonably
request.
S. Opinions of Counsel Delivered Under Related Agreements. Syndication
Agent and Administrative Agent and their respective counsel shall have received
copies of each of the opinions of counsel delivered to the parties under the
Related Agreements, together with a letter from each such counsel (to the extent
not inconsistent with such counsel's established internal policies) authorizing
Lenders to rely upon such opinion to the same extent as though it were addressed
to Lenders.
T. Auditor's Letter. Administrative Agent shall have received an executed
Auditor's Letter.
U. Actuary's Letter. Administrative Agent shall have received a certified
copy of the executed Actuary's Letter referred to in Schedule 5 of the
Acquisition Agreement and a letter addressed to the Agents and Lenders from
Company's actuary confirming the adequacy of the basis of the calculation of the
Transfer Amount as provided in such Actuary's Letter, which letter shall be
satisfactory to Administrative Agent and Syndication Agent.
V. Mitel AB. Mitel AB shall have filed an application for exemption from
the relevant Swedish tax authority requesting permission for Mitel AB to become
a Subsidiary Guarantor and grant a charge on all its assets to Administrative
Agent for the benefit of Lenders, which application shall be in form and
substance reasonably satisfactory to Administrative Agent and Syndication Agent.
W. Intercompany Notes. Administrative Agent and Syndication Agent shall
have received original executed copies of the Discounted Note Documents and the
Intergroup Loan Agreement, in each case including all Intercompany Notes issued
thereunder to be pledged to
82
the Administrative Agent pursuant to the Collateral Documents, which documents
shall be in form and substance satisfactory to Administrative Agent and
Syndication Agent.
X. Fees. Company shall have paid to Administrative Agent and Syndication
Agent the fees payable on the Closing Date referred to in subsection 2.3.
Y. Representations and Warranties; Performance of Agreements. Company shall
have delivered to Administrative Agent an Officers' Certificate, in form and
substance satisfactory to Syndication Agent and Administrative Agent, to the
effect that the representations and warranties in Section 5 hereof are true,
correct and complete in all material respects on and as of the Closing Date to
the same extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete in all material
respects on and as of such earlier date) and that Company shall have performed
in all material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before the
Closing Date except as otherwise disclosed to and agreed to in writing by
Administrative Agent, Syndication Agent and Requisite Lenders.
Z. Completion of Proceedings. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Syndication
Agent or Administrative Agent, acting on behalf of Lenders, and their respective
counsel shall be satisfactory in form and substance to Syndication Agent and
Administrative Agent and such counsel, and Syndication Agent and Administrative
Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Syndication Agent and Administrative Agent
may reasonably request.
4.2 Conditions to All Loans.
The obligations of Lenders to make Loans on each Funding Date are subject
to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding Date,
in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by the chief executive
officer, the chief financial officer or the treasurer of Company or by any
executive officer of Company designated by any of the above-described
officers on behalf of Company in a writing delivered to Administrative
Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in
the other Loan Documents shall be true, correct and complete in all
material respects on and as of that Funding Date to the same extent as
though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall have been
true, correct and complete in all material respects on and as of such
earlier date;
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Borrowing that
83
would constitute an Event of Default or a Potential Event of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender
from making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding Date shall
not violate any law including Regulation G, Regulation T, Regulation U
or Regulation X of the Board of Governors of the Federal Reserve
System; and
(vi) There shall not be pending or, to the knowledge of Company,
threatened, any action, suit, proceeding, governmental investigation
or arbitration against or affecting Company or any of its Subsidiaries
or any property of Company or any of its Subsidiaries that has not
been disclosed by Company in writing pursuant to subsection 5.6 or
6.1(x) prior to the making of the last preceding Loans (or, in the
case of the initial Loans, prior to the execution of this Agreement),
and there shall have occurred no development not so disclosed in any
such action, suit, proceeding, governmental investigation or
arbitration so disclosed, that, in either event, in the opinion of
Administrative Agent, Syndication Agent or of Requisite Lenders, would
reasonably be expected to have a Material Adverse Effect; and no
injunction or other restraining order shall have been issued and no
hearing to cause an injunction or other restraining order to be issued
shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated by this Agreement or the making of Loans
hereunder.
4.3 Conditions to Letters of Credit.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Request for Issuance of Letter of
Credit, in each case signed by the chief executive officer, the chief financial
officer or the treasurer of Company or by any executive officer of Company
designated by any of the above-described officers on behalf of Company in a
writing delivered to Administrative Agent, together with all other information
specified in subsection 3.1B(i) and such other documents or information as the
applicable Issuing Lender may reasonably require in connection with the issuance
of such Letter of Credit.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same extent as
if the issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit
84
were a Funding Date.
SECTION 5.
COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans, to induce Issuing Lenders to issue Letters of Credit and to induce other
Lenders to purchase participations therein, Company represents and warrants to
each Lender, on the date of this Agreement, on each Funding Date and on the date
of issuance of each Letter of Credit, that the following statements are true,
correct and complete:
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. Each Loan Party is a corporation or limited
liability company duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation as specified in Schedule 5.1
annexed hereto. Each Loan Party has all requisite corporate power and authority
to own and operate its properties, to carry on its business as now conducted and
as proposed to be conducted, to enter into the Loan Documents and Related
Agreements to which it is a party and to carry out the transactions contemplated
thereby.
B. Qualification and Good Standing. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and will not have a Material Adverse Effect.
C. Conduct of Business. Company and its Subsidiaries are, and after giving
effect to the Acquisition on the Closing Date will be, engaged only in the
businesses permitted to be engaged in pursuant to subsection 7.14.
D. Subsidiaries. The Plessey Entities and their respective Subsidiaries and
the Subsidiaries of Company are each identified in Schedule 5.1 annexed hereto.
The capital stock of each Plessey Entity, each Subsidiary thereof and each
Subsidiary of Company identified in Schedule 5.1 annexed hereto is duly
authorized, validly issued, fully paid and nonassessable and none of such
capital stock constitutes Margin Stock. Each Plessey Entity, each Subsidiary
thereof and each Subsidiary of Company identified in Schedule 5.1 annexed hereto
is a corporation or limited liability company duly organized, validly existing
and in good standing under the laws of its respective jurisdiction of
incorporation set forth therein, has all requisite corporate power and authority
to own and operate its properties and to carry on its business as now conducted
and as proposed to be conducted, and is qualified to do business and in good
standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, in each case except where
failure to be so qualified or in good standing or a lack of such corporate power
and authority has not had and will not have a Material Adverse Effect. Schedule
5.1 annexed hereto correctly sets forth the ownership interest of the Plessey
Entities, their respective Subsidiaries and each Subsidiary of Company
identified therein, both before and after giving effect to the Acquisition.
E. Permitted Acquisitions. Company and each Subsidiary making any Permitted
Acquisition shall have the corporate power to consummate such Permitted
Acquisition upon the consummation thereof, on the terms set forth in any
applicable purchase agreement,
85
agreement of merger or other operative agreement. Upon the consummation of any
Permitted Acquisition, such Permitted Acquisition shall have been duly
authorized by all necessary action of Company and any of its Subsidiaries
participating therein.
5.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents and the Related Agreements have been duly authorized by all
necessary corporate action on the part of each Loan Party that is a party
thereto.
B. No Conflict. The execution, delivery and performance by Loan Parties of
the Loan Documents and the Related Agreements to which they are parties and the
consummation of the transactions contemplated by the Loan Documents and such
Related Agreements and the consummation of any Permitted Acquisition do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to Company or any of its Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws (or comparable organizational documents) of
Company or any of its Subsidiaries or any order, judgment or decree of any court
or other agency of government binding on Company or any of its Subsidiaries,
(ii) conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any Contractual Obligation of Company or
any of its Subsidiaries (other than, with respect to the exercise of certain
remedies under the U.K. Guarantee and Debenture, as such exercise may be
affected by certain government contracts in the United Kingdom), (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of Company or any of its Subsidiaries (other than any Liens created under
any of the Loan Documents in favor of Administrative Agent on behalf of
Lenders), or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of Company or any of its
Subsidiaries, except for such approvals or consents which will be or have been
obtained on or before the Closing Date and disclosed in writing to Lenders.
C. Governmental Consents. The execution, delivery and performance by Loan
Parties of the Loan Documents and the Related Agreements to which they are
parties and the application of the proceeds of the Loans and the consummation of
the transactions contemplated by the Loan Documents and such Related Agreements
do not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any multi-national, federal,
provincial, state, municipal, local or other governmental authority or
regulatory body except for such consents and approvals that have been obtained
on or prior to the Closing Date. As of the Closing Date, all consents or
approvals from or notice to or filing with any multi-national, federal,
provincial, state, municipal, local or other (domestic or foreign) regulatory
authority required to be obtained on or before such date in connection with the
Acquisition or documents referred to in the previous sentence and the
transactions contemplated thereby will have been accomplished in compliance in
all material respects with applicable laws and regulations.
D. Binding Obligation. Each of the Loan Documents and Related Agreements
has been duly executed and delivered by each Loan Party that is a party thereto
and is the legally valid and binding obligation of such Loan Party, enforceable
against such Loan Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
86
5.3 Financial Condition.
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheets of Company and its Subsidiaries (other than the Plessey Entities
and their respective Subsidiaries) as at March 28, 1997 and the related
consolidated statements of income, stockholders equity and cash flows of Company
and its Subsidiaries (other than the Plessey Entities and their respective
Subsidiaries) for the Fiscal Year then ended, (ii) the unaudited consolidated
balance sheets of Company and its Subsidiaries (other than the Plessey Entities
and their respective Subsidiaries) for the period from March 28, 1997 to
December 31, 1997 and the related unaudited consolidated statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries (other than
the Plessey Entities and their respective Subsidiaries) for the nine months then
ended, (iii) pursuant to Schedule 4.1L annexed hereto, the financial statements
and financial schedules of the Plessey Entities and their respective
Subsidiaries with the exception of the dormant companies set forth on such
Schedule, and (iv) pursuant to Schedule 4.1L annexed hereto, the unaudited
financial statements of the Plessey Entities and their respective Subsidiaries
for the period from March 31, 1997 to December 31, 1997. All such statements set
forth in clauses (i) and (ii) above were prepared in conformity with GAAP and
all such statements set forth in clauses (iii) and (iv) above were prepared in
conformity with accounting principles generally accepted in the United Kingdom
or the applicable country, as the case may be, and all such statements set forth
in clauses (i) and (ii) fairly present, in all material respects, the financial
position of the entities described in such financial statements taken as a whole
as at the respective dates thereof and the results of operations and cash flows
of the entities described therein taken as a whole for each of the periods then
ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year-end adjustments. All such
statements set forth in clauses (iii) and (iv) above fairly present, in all
material respects, the financial position of the entities described therein in
such financial statements as at the respective dates thereof and the results of
operations and cash flows of the entities described therein for each of the
periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments.
Company does not (and will not following the funding of the initial Loans and
the consummation of the Acquisition) have any Contingent Obligation (except as
set forth on Schedule 7.4 annexed hereto), contingent liability or liability for
taxes, long-term lease or unusual forward or long-term commitment that is not
reflected in the foregoing financial statements or the notes thereto and which
in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company
or any of its Subsidiaries taken as a whole.
5.4 No Material Adverse Change; No Restricted Junior Payments.
Since September 30, 1997 and assuming consummation of the Acquisition, no
event or change has occurred that has caused or evidences, either in any case or
in the aggregate, a Material Adverse Effect. Neither Company nor any of its
Subsidiaries has directly or indirectly declared, ordered, paid or made, or set
apart any sum or property for, any Restricted Junior Payment or agreed to do so
except as permitted by subsection 7.5.
87
5.5 Title to Properties; Liens; Real Property.
A. Title to Properties; Liens. Each Loan Party and each Subsidiary thereof
has (i) good, sufficient and legal title to (in the case of fee interests in
real property), (ii) valid leasehold interests in (in the case of leasehold
interests in real or personal property), or (iii) good title to (in the case of
all other personal property), all of their respective properties and assets
reflected in the financial statements referred to in subsection 5.3 or in the
most recent financial statements delivered pursuant to subsection 6.1, in each
case except for assets disposed of since the date of such financial statements
in the ordinary course of business or as otherwise permitted under subsection
7.7. Except as permitted by this Agreement, all such properties and assets are
free and clear of Liens.
B. Real Property. As of the Closing Date, Schedule 5.5 annexed hereto
contains a true, accurate and complete list of (i) all fee and freehold
properties of each Loan Party and its Subsidiaries and (ii) all leases,
subleases or assignments of leases (together with all amendments, modifications,
supplements, renewals or extensions of any thereof) affecting each Real Property
Asset of any Loan Party, regardless of whether such Loan Party is the landlord
or tenant (whether directly or as an assignee or successor in interest) under
such lease, sublease or assignment. Except as specified in Schedule 5.5 annexed
hereto, each agreement listed in clause (ii) of the immediately preceding
sentence is in full force and effect and Company does not have knowledge of any
default that has occurred and is continuing thereunder, and each such agreement
constitutes the legally valid and binding obligation of each applicable Loan
Party, enforceable against such Loan Party in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles.
5.6 Litigation; Adverse Facts.
Except as set forth in Schedule 5.6 annexed hereto, there are no actions,
suits, proceedings, arbitrations or governmental investigations (whether or not
purportedly on behalf of Company, any Plessey Entity or any of their respective
Subsidiaries) at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (including any Environmental Claims) that
are pending or, to the knowledge of Company, threatened against or affecting
Company, any Plessey Entity or any of their respective Subsidiaries or any
property of Company, any Plessey Entity or their respective Subsidiaries and
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. None of Company, any Plessey Entity or any of
their respective Subsidiaries (i) is in violation of any applicable laws
(including Environmental Laws) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect, or (ii) is
subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.
88
5.7 Payment of Taxes.
Except to the extent permitted by subsection 6.3, (i) all tax returns and
reports of Company and its Subsidiaries and of the Plessey Entities listed on
Part A of Schedule 4.1L required to be filed by any of them have been timely
filed, and all taxes shown on such tax returns to be due and payable and all
assessments, fees and other governmental charges upon Company and its
Subsidiaries and such Plessey Entities and upon their respective properties,
assets, income, businesses and franchises which are due and payable have been
paid when due and payable and (ii) to the best knowledge of Company, all tax
returns and reports of the Plessey Entities listed on Part B of Schedule 4.1L
required to be filed by any of them have been timely filed, and all taxes shown
on such tax returns to be due and payable and all assessments, fees and other
governmental charges upon such Plessey Entities and upon their respective
properties, assets, income, businesses and franchises which are due and payable
have been paid when due and payable. Company knows of no proposed tax assessment
against Company, any Plessey Entity or any of their respective Subsidiaries
which is not being actively contested by Company, such Plessey Entity or such
Subsidiary in good faith and by appropriate proceedings; provided that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements; Material
Contracts.
A. None of Company, any Plessey Entity or any of their respective
Subsidiaries is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any of its Contractual
Obligations, and no condition exists that, with the giving of notice or the
lapse of time or both, would constitute such a default, except where the
consequences, direct or indirect, of such default or defaults, if any, would not
have a Material Adverse Effect.
B. None of Company, any Plessey Entity or any of their respective
Subsidiaries is a party to or is otherwise subject to any agreements or
instruments or any charter or other internal restrictions which, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect.
C. Schedule 5.8 contains a true, correct and complete list of all the
Material Contracts in effect on the Closing Date. Except as described on
Schedule 5.8, all such Material Contracts are in full force and effect and no
material defaults currently exist thereunder.
5.9 Governmental Regulation.
None of Company, any Plessey Entity or any of their respective Subsidiaries
is subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act, the Interstate Commerce Act or the Investment Company Act
of 1940 or under any other federal or state statute or regulation which may
limit its ability to incur Indebtedness or which may otherwise render all or any
portion of the Obligations unenforceable.
89
5.10 Securities Activities.
A. None of Company, any Plessey Entity or any of their respective
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
Margin Stock.
B. Following application of the proceeds of each Loan, not more than 25% of
the value of the assets (either of Company only or of Company and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 Employee Benefit Plans.
A. Except as set forth in Schedule 5.11, each Loan Party and each of their
respective ERISA Affiliates are in material compliance with all applicable
provisions and requirements of ERISA and the regulations and published
interpretations thereunder with respect to each U.S. Employee Benefit Plan, and
have performed all of their obligations under each U.S. Employee Benefit Plan,
except where noncompliance or failure to perform could not reasonably be
expected to have a Material Adverse Effect. Each Loan Party and each Subsidiary
is in material compliance with all applicable provisions and requirements of
relevant law with respect to each Foreign Benefit Plan, and have performed all
of their obligations under each Foreign Benefit Plan, except where noncompliance
or failure to perform could not reasonably be expected to have a Material
Adverse Effect.
B. Except as set forth in Schedule 5.11, (i) each U.S. Employee Benefit
Plan which is intended to qualify under Section 401(a) of the Internal Revenue
Code is so qualified and (ii) each Foreign Benefit Plan which is intended to
qualify for beneficial tax treatment under the laws of the relevant country is
so qualified.
C. Except as set forth in Schedule 5.11, no ERISA Event and no Foreign
Benefit Plan Event has occurred or is continuing in respect of which there is
any outstanding liability of any Loan Party, any of its Subsidiaries or any of
their respective ERISA Affiliates, except where such ERISA Event or Foreign
Benefit Plan Event could not reasonably be expected to have a Material Adverse
Effect. No ERISA Event or Foreign Benefit Plan Event is reasonably expected to
occur.
D. Except to the extent required under Section 4980B of the Internal
Revenue Code or except as set forth in Schedule 5.11 annexed hereto, no Employee
Benefit Plan provides health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employee of any Loan Party,
any of its Subsidiaries or any of their respective ERISA Affiliates.
E. Except as set forth on Schedule 5.11 annexed hereto, all Pension Plan
contributions required under applicable law have been made, and each Pension
Plan is fully funded on an ongoing basis (including, where applicable, the
making of adequate contributions to a pension insurance scheme in respect of
employees covered by a Foreign Pension Plan). As of the most recent valuation
date for any U.S. Pension Plan, the amount of unfunded benefit liabilities (as
defined in Section 4001(a)(18) of ERISA), individually or in
90
the aggregate for all U.S. Pension Plans (excluding for purposes of such
computation any U.S. Pension Plans with respect to which assets exceed benefit
liabilities), does not exceed $1,000,000. Except as set forth on Schedule 5.11
annexed hereto, no Loan Party and no Subsidiary would incur any material
liability upon the termination of any Foreign Pension Plan.
F. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of the Loan
Parties, their respective Subsidiaries and their respective ERISA Affiliates for
a complete withdrawal from such Multiemployer Plan (within the meaning of
Section 4203 of ERISA), when aggregated with such potential liability for a
complete withdrawal from all Multiemployer Plans, based on information available
pursuant to Section 4221(e) of ERISA, does not exceed $1,000,000.
5.12 Certain Fees.
No broker's or finder's fee or commission will be payable with respect to
this Agreement or any of the transactions contemplated hereby, and Company
hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.
5.13 Environmental Protection.
Except as set forth in Schedule 5.13 annexed hereto:
(i) no Loan Party nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to
(a) any Environmental Law, (b) any Environmental Claim, or (c) any
Hazardous Materials Activity;
(ii) no Loan Party nor any of its Subsidiaries has received any letter
or request for information from an environmental regulatory agency with
jurisdiction over any Facility investigating the potential for or existence
of Releases either at the Facility or at a related off-site location.
(iii) there are and, to Company's knowledge, have been no conditions,
occurrences, or Hazardous Materials Activities which could reasonably be
expected to form the basis of an Environmental Claim against any Loan Party
or any of its Subsidiaries;
(iv) Company maintains an environmental management system for its and
each of its Subsidiaries' operations that demonstrates a commitment to
environmental compliance and includes procedures for (a) preparing and
updating written compliance manuals covering pertinent regulatory areas,
(b) tracking changes in applicable Environmental Laws and modifying
operations to comply with new requirements thereunder, (c) training
employees to comply with applicable environmental requirements and updating
such training as necessary, (d) performing regular internal compliance
audits of each Facility and ensuring correction of any incidents of
non-compliance detected by means of such audits, and (e) reviewing the
compliance status of off-site waste disposal facilities; and
91
(v) compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws will not, individually
or in the aggregate, have a reasonable possibility of giving rise to a
Material Adverse Effect.
Notwithstanding anything in this subsection 5.13 to the contrary, no event
or condition has occurred or is occurring with respect to any Loan Party or any
of its Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity, including any matter disclosed
on Schedule 5.13 annexed hereto, any Loan Party which individually or in the
aggregate has had or could reasonably be expected to have a Material Adverse
Effect.
5.14 Employee Matters.
There is no strike or work stoppage in existence or threatened involving
Company, any Plessey Entity or any of their respective Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.
5.15 Solvency.
Each Loan Party is and, upon the incurrence of any Obligations by such Loan
Party on any date on which this representation is made, will be, Solvent.
5.16 Matters Relating to Collateral.
A. Creation, Perfection and Priority of Liens. The execution and delivery
of the Collateral Documents by Loan Parties, together with (i) the actions taken
on or prior to the date hereof pursuant to subsections 4.1H, 4.1I, 6.8 and 6.9
and (ii) the delivery to Administrative Agent of any Pledged Collateral not
delivered to Administrative Agent at the time of execution and delivery of the
applicable Collateral Document (all of which Pledged Collateral has been so
delivered) are effective to create in favor of Administrative Agent for the
benefit of Lenders, as security for the respective Secured Obligations (as
defined in the applicable Collateral Document in respect of any Collateral), a
valid and (except as expressly provided in the U.K. Guarantee and Debenture)
perfected First Priority Lien on all of the Collateral, and all filings and
other actions necessary or desirable to perfect and maintain the perfection and
First Priority status of such Liens have been duly made or taken and remain in
full force and effect, other than (a) the filing of any UCC financing
statements or similar personal property or real property filings delivered to
Administrative Agent for filing (but not yet filed), (b) the periodic filing
of UCC or similar continuation statements in respect of UCC financing
statements or similar filings filed by or on behalf of Administrative Agent and
(c) the actions taken after the date hereof referred to in Part A of Schedule
5.16 in respect of Collateral located in the United Kingdom.
B. Governmental Authorizations. No authorization, approval or other action
by, and no notice to or filing with, any governmental authority or regulatory
body is required for either (i) the pledge or grant by any Loan Party of the
Liens purported to be created in favor of Administrative Agent pursuant to any
of the Collateral Documents or (ii) the exercise by Administrative Agent of any
rights or remedies in respect of any Collateral (whether specifically granted or
created pursuant to any of the Collateral Documents or created or provided for
by applicable law), except (a) for filings or recordings contemplated by
subsection 5.16A, (b) the foregoing does not apply with respect to remedies as
they may be affected by certain government contracts in the United Kingdom and
(c) as may be required, in connection with the disposition of any Pledged
Collateral, by laws generally affecting the
92
offering and sale of securities.
C. Absence of Third-Party Filings. Except such as may have been filed in
favor of Administrative Agent as contemplated by subsection 5.16A, (i) no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO or the United States Copyright Office or any
equivalent office or central registry in any other country.
D. Margin Regulations. The pledge of the Pledged Collateral pursuant to the
Collateral Documents does not violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
E. Information Regarding Collateral. All information supplied to
Administrative Agent by or on behalf of any Loan Party with respect to any of
the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
F. Intellectual Property. Each Loan Party and its Subsidiaries own, or are
licensed to use, all Intellectual Property. Schedule 5.16 annexed hereto, as
such Schedule may be modified by Company to include any patent, trademark,
copyright registration and application therefor acquired or held by any such
Person, lists all patents, trademark and copyright registration and applications
therefor of each Loan Party and its Subsidiaries (including, each Plessey Entity
and its Subsidiaries). No claim has been asserted by any Person with respect to
the use of any Intellectual Property, or challenging or questioning the validity
or effectiveness of any Intellectual Property and neither Company knows of any
valid basis for any such claim which, in either case, could reasonably be
expected to result in a Material Adverse Effect. The use of the Intellectual
Property by each Loan Party and its Subsidiaries does not infringe on the rights
of any Person, subject to such claims and infringements as do not, in the
aggregate, give rise to any liability on the part of any Loan Party or any of
its Subsidiaries that could reasonably be expected to result in a Material
Adverse Effect. The consummation of the transactions contemplated by this
Agreement will not in any material manner or to any material extent impair the
ownership of (or the license to use, as the case may be) any Intellectual
Property by any Loan Party or any of its Subsidiaries.
5.17 Related Agreements.
A. Delivery of Related Agreements. Company has delivered to Lenders
complete and correct copies of each Related Agreement and of all exhibits and
schedules thereto.
B. Seller's Warranties. Except to the extent otherwise set forth herein or
in the schedules hereto, each of the representations and warranties given by
Seller to Company or any of its Subsidiaries in the Acquisition Agreement is
true and correct in all material respects as of the date hereof (or as of any
earlier date to which such representation and warranty specifically relates) and
will be true and correct in all material respects as of the Closing Date (or as
of such earlier date, as the case may be), in each case subject to the
qualifications set forth in the schedules to the Acquisition Agreement.
C. Warranties of Company. Subject to the qualifications set forth therein,
each of the representations and warranties given by Company and any of its
93
Subsidiaries to Seller in the Acquisition Agreement is true and correct in all
material respects as of the date hereof and will be true and correct in all
material respects as of the Closing Date.
D. Survival. Notwithstanding anything in the Acquisition Agreement to the
contrary, the representations and warranties of Company set forth in subsections
5.17B and 5.17C shall, solely for purposes of this Agreement, survive the
Closing Date for the benefit of Lenders.
5.18 Employment and Labor Agreements
Except as disclosed on Schedule 5.18, there are no employment agreements
covering management employees of any Loan Party or any of its Subsidiaries and
there are no collective labor agreements covering any employees of any Loan
Party or any of its Subsidiaries. Each Loan Party and each of its Subsidiaries
is in compliance with the terms and conditions of all such collective bargaining
agreements except where failure to so comply could not reasonably be expected to
have a Material Adverse Effect.
5.19 Disclosure.
No representation or warranty of any Loan Party or any of its Subsidiaries
contained in the Confidential Information Memorandum or in any Loan Document or
Related Agreement or in any other document, certificate or written statement
furnished to Lenders by or on behalf of any Loan Party or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement (including any Permitted Acquisition) contains any untrue statement of
a material fact or omits to state a material fact (known to Company, in the case
of any document not furnished by it) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed to be reasonable at the time made, it being recognized by Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There are no facts known (or which should
upon the reasonable exercise of diligence be known) to Company (other than
matters of a general economic nature) that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect and that
have not been disclosed herein or in such other documents, certificates and
statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
5.20 Subsidiary Guarantors.
A. Closing Date Subsidiary Guarantors. As of the Closing Date, each
Subsidiary of Company (other than Mitel AB, Mitel Barbados, Plessey GmbH,
Plessey France SA, Marconi Electronic Devices SA, PSL and MEDL) which owns
assets (including receivables) with an aggregate fair market value (without
netting such fair market value against any liability of such Subsidiary) in
excess of $10,000,000 is party to a Guaranty.
B. Mitel Barbados. Mitel Barbados has no assets (including receivables)
other than the Discounted Notes.
94
SECTION 6.
COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
6.1 Financial Statements and Other Reports.
Company will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Syndication Agent, Administrative Agent and
Lenders:
(i) Monthly Financials: as soon as available and in any event within
(x) 25 days after the end of each of the first two months in any Fiscal
Quarter commencing with February, 1998, (y) 45 days after the end of the
last month in each of the first three Fiscal Quarters in any Fiscal Year
and (z) 55 days after the last month in any Fiscal Year, (a) the financial
report prepared for presentation to senior management of Company and
including the consolidated balance sheets of Company and its Subsidiaries
as at the end of such month and the related consolidated statements of
income, stockholders' equity and cash flows of Company and its Subsidiaries
for such month and for the period from the beginning of the then current
Fiscal Year to the end of such month, setting forth in each case in
comparative form the corresponding figures for the corresponding periods of
the previous Fiscal Year and the corresponding figures from the Financial
Plan for the current Fiscal Year to the extent prepared on a monthly basis,
and the combined statements of revenue and cash flows for the Plessey
Entities and their respective Subsidiaries, all in reasonable detail and
certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company and
its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, in each case on
a consolidated basis subject to changes resulting from audit and normal
year-end adjustments, and (b) a narrative report describing the operations
of Company and its Subsidiaries in the form prepared for presentation to
senior management for such month and for the period from the beginning of
the then current Fiscal Year to the end of such month;
(ii) Quarterly Financials: as soon as available and in any event
within (x) 45 days after the end of each of the first three Fiscal Quarters
in any Fiscal Year and (z) 90 days after the end of the fourth Fiscal
Quarter in any Fiscal Year, (a) the consolidated balance sheets of Company
and its Subsidiaries and the balance sheets of the Material Subsidiaries as
at the end of such Fiscal Quarter and the related consolidated statements
of income, stockholders' equity and cash flows of Company and its
Subsidiaries and the statements of income and stockholders' equity of the
Material Subsidiaries for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year, all in
reasonable detail and certified by the chief financial
95
officer of Company that they fairly present, in all material respects, the
consolidated financial condition of Company and its Subsidiaries and the
financial condition of the Material Subsidiaries as at the dates indicated
and the consolidated results of its operations and consolidated cash flows
of Company and its Subsidiaries and the results of operations of the
Material Subsidiaries for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments, and (b) a narrative
report describing the operations of Company and its Subsidiaries in the
form prepared for presentation to senior management for such Fiscal Quarter
and for the period from the beginning of the then current Fiscal Year to
the end of such Fiscal Quarter;
(iii) Year-End Financials: as soon as available and in any event
within 90 days after the end of each Fiscal Year, (a) the consolidated
balance sheets of Company and its Subsidiaries and the balance sheets of
the Material Subsidiaries as at the end of such Fiscal Year and the related
consolidated statements of income, stockholders' equity and cash flows of
Company and its Subsidiaries for such Fiscal Year and the statements of
income and stockholders' equity of the Material Subsidiaries, setting forth
in each case in comparative form the corresponding figures for the previous
Fiscal Year covered by such financial statements, all in reasonable detail
and certified by the chief financial officer of Company that they fairly
present, in all material respects, the consolidated financial condition of
Company and its Subsidiaries and the financial condition of the Material
Subsidiaries as at the dates indicated and the consolidated results of
operations and consolidated cash flows of Company and its Subsidiaries and
the results of operations of the Material Subsidiaries for the periods
indicated, (b) a narrative report describing the operations of Company and
its Subsidiaries in the form prepared for presentation to senior management
for such Fiscal Year, and (c) in the case of such consolidated financial
statements, a report thereon of Ernst & Young or other independent
certified public accountants of recognized national standing selected by
Company and satisfactory to Syndication Agent and Administrative Agent,
which report shall be unqualified, shall not express any doubts about the
ability of Company and its Subsidiaries to continue as a going concern, and
shall state that such consolidated financial statements fairly present, in
all material respects, the consolidated financial position of Company and
its Subsidiaries as at the dates indicated and the consolidated results of
their operations and their consolidated cash flows for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years (except as otherwise disclosed in such financial statements) and that
the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards;
(iv) Officers' and Compliance Certificates; U.S. GAAP Reconciliation:
together with each delivery of financial statements of Company and its
Subsidiaries pursuant to subdivisions (i), (ii) and (iii) above, (a) an
Officers' Certificate of Company stating that the signers have reviewed the
terms of this Agreement and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and
condition of Company and its Subsidiaries during the accounting period
covered by such financial statements and that such review has not disclosed
the existence during or at the end of such accounting period, and that the
signers do not have knowledge of the existence as at the date of such
Officers' Certificate, of any condition or event that constitutes an Event
of Default or Potential Event of Default, or, if any such condition or
event existed or exists, specifying the nature and period of existence
thereof and what action Company has taken, is taking and proposes to take
96
with respect thereto; (b) a Compliance Certificate demonstrating in
reasonable detail compliance during and at the end of the applicable
accounting periods with the restrictions contained in Section 7; and
(c)with respect to subdivisions (ii) and (iii) only, a written statement of
the chief accounting officer or chief financial officer of Company setting
forth a reconciliation of the differences between GAAP and U.S. GAAP as
applicable to such financial statements.
(v) Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Company and its Subsidiaries delivered
pursuant to subdivisions (ii), (iii) or (xiii) of this subsection 6.1 will
differ in any material respect from the consolidated financial statements
that would have been delivered pursuant to such subdivisions had no such
change in accounting principles and policies been made, then together with
the first delivery of financial statements pursuant to subdivision (i),
(ii), (iii) or (xiii) of this subsection 6.1 following such change, (a)
consolidated financial statements of Company and its Subsidiaries for (y)
the current Fiscal Year to the effective date of such change and (z) the
two full Fiscal Years immediately preceding the Fiscal Year in which such
change is made, in each case prepared on a pro forma basis as if such
change had been in effect during such periods, and (b) a written statement
of the chief accounting officer or chief financial officer of Company
setting forth the differences (including any differences that would affect
any calculations relating to the financial covenants set forth in
subsection 7.6) which would have resulted if such financial statements had
been prepared without giving effect to such change;
(vi) Accountants' Certification: together with each delivery of
consolidated financial statements of Company and its Subsidiaries pursuant
to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that
their audit examination has included a review of the terms of this
Agreement and the other Loan Documents as they relate to accounting
matters, (b) stating whether, in connection with their audit examination,
any condition or event that constitutes an Event of Default or Potential
Event of Default has come to their attention and, if such a condition or
event has come to their attention, specifying the nature and period of
existence thereof; provided that such accountants shall not be liable by
reason of any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course of
their audit examination, and (c) stating that based on their audit
examination nothing has come to their attention that causes them to believe
either or both that the information contained in the certificates delivered
therewith pursuant to subdivision (iv) above is not correct or that the
matters set forth in the Compliance Certificates delivered therewith
pursuant to clause (b) of subdivision (iv) above for the applicable Fiscal
Year are not stated in accordance with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Company and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their becoming
97
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Company to its
security holders or by any Subsidiary of Company to its security holders
other than Company or another Subsidiary of Company, (b) all regular and
periodic reports and all registration statements (other than on Form S-8 or
a similar form) and prospectuses, if any, filed by Company or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority,
and (c) all press releases and other statements made available generally by
Company or any of its Subsidiaries to the public concerning material
developments in the business of Company or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of Company
obtaining knowledge (a) of any condition or event that constitutes an Event
of Default or Potential Event of Default, or becoming aware that any Lender
has given any notice (other than to Administrative Agent) or taken any
other action with respect to a claimed Event of Default or Potential Event
of Default, (b) that any Person has given any notice to Company or any of
its Subsidiaries or taken any other action with respect to a claimed
default or event or condition of the type referred to in subsection 8.2,
(c) of any condition or event that would be required to be disclosed in a
current report filed by Company with the Securities and Exchange Commission
on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the date
hereof) if Company were required to file such reports under the Exchange
Act, or (d) of the occurrence of any event or change that has caused or
evidences, either in any case or in the aggregate, a Material Adverse
Effect, an Officers' Certificate specifying the nature and period of
existence of such condition, event or change, or specifying the notice
given or action taken by any such Person and the nature of such claimed
Event of Default, Potential Event of Default, default, event or condition,
and what action Company has taken, is taking and proposes to take with
respect thereto;
(x) Litigation or Other Proceedings: promptly upon any officer of
Company obtaining knowledge of (X) the institution of, or non-frivolous
threat of, any action, suit, proceeding (whether administrative, judicial
or otherwise), governmental investigation or arbitration against or
affecting Company or any of its Subsidiaries or any property of Company or
any of its Subsidiaries (collectively, "Proceedings") not previously
disclosed in writing by Company to Lenders or (Y) any material development
in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters;
(xi) ERISA Events: promptly upon becoming aware of the occurrence of
or forthcoming occurrence of any ERISA Event or any Foreign Benefit Plan
Event, a written notice specifying the nature thereof, what action Company,
any of its Subsidiaries or any of their respective ERISA Affiliates has
taken, is taking or
98
proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor, the
PBGC or any other government or governmental agency with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a) each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each U.S.
Pension Plan; (b) all notices received by Company, any of its Subsidiaries
or any of their respective ERISA Affiliates from a Multiemployer Plan
sponsor concerning an ERISA Event; (c) copies of any notices received from
a court, government or governmental agency with respect to a Foreign
Benefit Plan Event; and (d) copies of such other documents or governmental
reports or filings relating to any Employee Benefit Plan as Syndication
Agent or Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any event no
later than 55 days following the beginning of the 1999 Fiscal Year and no
later than the beginning of each Fiscal Year thereafter, (a) a consolidated
plan and financial forecast for such Fiscal Year (the "Financial Plan" for
such Fiscal Year), including (x) a forecasted consolidated balance sheet
and forecasted consolidated statements of income and cash flows of Company
and its Subsidiaries for such Fiscal Year, together with a pro forma
Compliance Certificate for such Fiscal Year and an explanation of the
assumptions on which such forecasts are based, (y) forecasted consolidated
statements of income and cash flows of Company and its Subsidiaries for
each month of such Fiscal Year, together with an explanation of the
assumptions on which such forecasts are based, and (z) such other
information and projections as any Lender may reasonably request, and (b) a
consolidated plan and financial forecast for the period commencing with
such Fiscal Year and continuing through and including the 2004 Fiscal Year
including annual forecasted consolidated balance sheet and forecasted
consolidated statements of income and cash flows of Company and its
Subsidiaries for such period.
(xiv) Insurance: as soon as practicable and in any event by the last
day of each Fiscal Year, a report in form and substance satisfactory to
Syndication Agent and Administrative Agent outlining all material insurance
coverage maintained as of the date of such report by Company and its
Subsidiaries and all material insurance coverage planned to be maintained
by Company and its Subsidiaries in the immediately succeeding Fiscal Year;
(xv) Board of Directors: with reasonable promptness, written notice of
any change in the Board of Directors of Company;
(xvi) New Subsidiaries: promptly upon any Person becoming a Subsidiary
of Company, a written notice setting forth with respect to such Person (a)
the date on which such Person became a Subsidiary of Company, (b) the
capitalization of such Subsidiary and ownership interest of Company and its
Subsidiaries in such Subsidiary and (c) the jurisdiction of organization of
such Subsidiary;
(xvii) Material Contracts: promptly, and in any event within ten
Business Days after any Material Contract of Company or any of its
Subsidiaries is terminated or amended in a manner that is materially
adverse to Company or such Subsidiary, as the case may be, or any new
Material Contract is entered into, a written statement
99
describing such event with copies of such material amendments or new
contracts, and an explanation of any actions being taken with respect
thereto;
(xviii) Personal Property Filing Search Report: As promptly as
practicable after the date of delivery to Administrative Agent of any
personal property financing statement or similar filing executed by any
Loan Party pursuant to subsection 4.1I(iv) or 6.8A, copies of completed
personal property filing or similar filing searches evidencing the proper
filing, recording and indexing of all such personal property financing
statements and similar filings and listing all other effective financing
statements that name such Loan Party as debtor, together with copies of all
such other financing statements not previously delivered to Administrative
Agent by or on behalf of Company or such Loan Party; and
(xix) Permitted Acquisitions: As soon as practicable but in no event
less than five Business Days prior to the date on which any Permitted
Acquisition is consummated, (a) financial statements of the target
(including any Person whose assets are to be acquired) of such Permitted
Acquisition and its Subsidiaries, if any, on a consolidated or combined
basis (or, if any such Permitted Acquisition is of assets, financial
statements of the business operation to be acquired), in each case, to the
extent available, for the most recently completed fiscal year of such
target, (b) copies of all other consolidated balance sheets and
consolidating balance sheets (to the extent consolidating balance sheets
are available) and related statements of operations and statements of cash
flows of such target and its Subsidiaries, if any, acquired in such
Permitted Acquisition, that are to be delivered to Company or any of its
Subsidiaries in connection with such Permitted Acquisition, (c) to the
extent then available, copies of all purchase agreements, agreements of
merger, letters of intent or other operative agreements entered into by
Company or any of its Subsidiaries in connection with such Permitted
Acquisition (it being understood and agreed that, to the extent such
agreements or letters of intent have not been entered into at such time,
copies of such agreements and letters of intent shall be delivered
reasonably promptly after the execution thereof), (d) a consolidated
balance sheet of Company and its Subsidiaries giving pro forma effect to
such Permitted Acquisition, (e) a Compliance Certificate of Company and its
Subsidiaries demonstrating pro forma compliance with the covenants
contained in Section 7 after giving effect to such Permitted Acquisition,
(f) any other information relating to such Permitted Acquisition reasonably
requested by Syndication Agent or Administrative Agent.
(xx) Other Information: with reasonable promptness, such other
information and data with respect to Company or any of its Subsidiaries as
from time to time may be reasonably requested by any Lender.
6.2 Corporate Existence, etc.
Except as permitted under subsection 7.7, Company will, and will cause each
of its Subsidiaries to, at all times preserve and keep in full force and effect
its corporate existence and all rights and franchises material to its business;
provided, however that neither Company nor any of its Subsidiaries shall be
required to preserve any such right or franchise if the Board of Directors of
Company or such Subsidiary shall determine that the preservation thereof is no
longer desirable in the conduct of the business of Company or such Subsidiary,
as the case may be, and that the loss thereof is not disadvantageous in any
material respect to Company, such Subsidiary or Lenders.
100
6.3 Payment of Taxes and Claims; Tax Consolidation.
A. Company will, and will cause each of its Subsidiaries to, pay all taxes,
assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided that no such charge or claim need be paid if it is
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, so long as (1) such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor and (2) in the case of a charge or claim which has or may become a
Lien against any of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral to satisfy such charge
or claim.
B. Company will not, nor will it permit any of its Subsidiaries to, file or
consent to the filing of any consolidated income tax return with any Person
(other than Company or any of its Subsidiaries).
6.4 Maintenance of Properties; Insurance; Application of Net Insurance/
Condemnation Proceeds.
A. Maintenance of Properties. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of Company and its Subsidiaries (including all
Intellectual Property) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof. The Company shall cause
each of its U.K. Subsidiaries to comply with the covenants set out clause 8 of
the U.K. Guarantee and Debenture, whether or not such Subsidiary is party to
such document.
B. Insurance. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Company will maintain or cause to be maintained (i) flood
insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory to Syndication Agent and Administrative Agent in their commercially
reasonable judgment. Each such policy of insurance shall (a) name Administrative
Agent for the benefit of Lenders as an additional insured thereunder as its
interests may appear and (b) in the case of each business interruption and
casualty insurance policy, contain a loss payable clause or
101
endorsement, satisfactory in form and substance to Syndication Agent and
Administrative Agent, that names Administrative Agent for the benefit of Lenders
as the loss payee thereunder for any covered loss in excess of $1,000,000 and
provides for at least 30 days prior written notice to Administrative Agent of
any modification or cancellation of such policy (other than any such
modification in respect of an insurance policy issued in the United Kingdom).
C. Application of Net Insurance/Condemnation Proceeds.
(i) Business Interruption Insurance. Upon receipt by Company or any of
its Subsidiaries of any business interruption insurance proceeds
constituting Net Insurance/Condemnation Proceeds, (a) so long as no Event
of Default or Potential Event of Default shall have occurred and be
continuing, Company or such Subsidiary may retain and apply such Net
Insurance/Condemnation Proceeds for working capital purposes, and (b) if an
Event of Default or Potential Event of Default shall have occurred and be
continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving
Loan Commitments shall be reduced) as provided in subsection 2.4B(iii)(b);
(ii) Casualty Insurance/Condemnation Proceeds. Upon receipt by Company
or any of its Subsidiaries of any Net Insurance/Condemnation Proceeds other
than from business interruption insurance, (a) so long as no Event of
Default or Potential Event of Default shall have occurred and be continuing
and so long as the aggregate amount of Net Insurance/Condemnation Proceeds
received from the Closing Date to the date of determination does not exceed
$15,000,000, Company may deliver to Administrative Agent an Officers'
Certificate setting forth (1) that portion of such Net
Insurance/Condemnation Proceeds (the "Proposed Insurance Reinvestment
Proceeds") that Company or such Subsidiary intends to use (or enter into a
contract to use) within 180 days of such date of receipt to pay or
reimburse the costs of repairing, restoring or replacing the assets in
respect of which such Net Insurance/Condemnation Proceeds were received or
to reinvest in Eligible Assets and (2) the proposed use of the Proposed
Insurance Reinvestment Proceeds and such other information with respect to
such proposed use as Syndication Agent or Administrative Agent may
reasonably request, and Company shall, or shall cause one or more of its
Subsidiaries to, promptly and diligently apply such Proposed Insurance
Reinvestment Proceeds to pay or reimburse the costs of repairing, restoring
or replacing the assets in respect of which such Proposed Insurance
Reinvestment Proceeds were received or to reinvestment in Eligible Assets
or, to the extent the Net Insurance/Condemnation Proceeds received from the
Closing Date to the date of determination exceed $500,000 and are not so
applied, to prepay the Loans (and/or the Revolving Loan Commitments shall
be reduced) as provided in subsection 2.4B(iii)(b), and (b) if an Event of
Default shall have occurred and be continuing, Company shall apply an
amount equal to such Net Insurance/ Condemnation Proceeds to prepay the
Loans (and/or the Revolving Loan Commitments shall be reduced) as provided
in subsection 2.4B(iii)(b).
(iii) Net Insurance/Condemnation Proceeds Received by Administrative
Agent. Upon receipt by Administrative Agent of any Net
Insurance/Condemnation Proceeds as loss payee, if and to the extent Company
would have been required to apply such Net Insurance/Condemnation Proceeds
(if it had received them directly) to prepay the Loans and/or reduce the
Revolving Loan Commitments, Administrative Agent shall, and Company hereby
authorizes Administrative Agent to, apply such Net
102
Insurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving
Loan Commitments shall be reduced) as provided in subsection 2.4B(iii)(b),
and (b) to the extent the foregoing clause (a) does not apply,
Administrative Agent shall deliver such Net Insurance/Condemnation Proceeds
to Company, and Company shall, or shall cause one or more of its
Subsidiaries to, promptly apply such Net Insurance/Condemnation Proceeds to
the costs of repairing, restoring, or replacing the assets in respect of
which such Net Insurance/Condemnation Proceeds were received or to
reinvestment in Eligible Assets; provided, however, that if at any time
Syndication Agent or Administrative Agent reasonably determines (A) that
Company or such Subsidiary is not proceeding diligently with such repair,
restoration or replacement or (B) that such repair, restoration or
replacement cannot be completed with the Net Insurance/Condemnation
Proceeds then held by Administrative Agent for such purpose, together with
funds otherwise available to Company for such purpose, or that such repair,
restoration or replacement cannot be completed within 180 days after the
receipt by Administrative Agent of such Net Insurance/Condemnation
Proceeds, Administrative Agent shall, and Company hereby authorizes
Administrative Agent to, apply such Net Insurance/ Condemnation Proceeds to
prepay the Loans (and/or the Revolving Loan Commitments shall be reduced)
as provided in subsection 2.4B(iii)(b).
6.5 Inspection Rights; Lender Meeting.
A. Inspection Rights. Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Company or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested.
B. Lender Meeting. Company will, upon the request of Syndication Agent,
Administrative Agent or Requisite Lenders, participate in a meeting of Agent and
Lenders once during each Fiscal Year to be held at Company's corporate offices
(or at such other location as may be agreed to by Company and Administrative
Agent) at such time as may be agreed to by Company and Administrative Agent.
6.6 Compliance with Laws, etc.
Company shall comply, and shall cause each of its Subsidiaries and all
other Persons on or occupying any Facilities to comply, with the requirements of
all applicable laws, rules, regulations and orders of any governmental authority
(including all Environmental Laws), noncompliance with which could reasonably be
expected to cause, individually or in the aggregate, a Material Adverse Effect.
103
6.7 Environmental Review and Investigation, Disclosure, Etc.; Company's Actions
Regarding Hazardous Materials Activities, Environmental Claims and
Violations of Environmental Laws.
A. Environmental Review and Investigation. Company agrees that
Administrative Agent may, from time to time and in its reasonable discretion,
(i) retain, at Company's expense, an independent professional consultant to
review any environmental audits, investigations, analyses and reports relating
to Hazardous Materials prepared by or for Company and (ii) in the event (a)
Administrative Agent reasonably believes that Company has breached any
representation, warranty or covenant contained in subsection 5.6, 5.13, 6.6 or
6.7 or that there has been a material violation of (or is or may be a material
liability under) Environmental Laws at any Facility or by Company or any of its
Subsidiaries at any other location or (b) an Event of Default has occurred and
is continuing, conduct its own investigation of any Facility; provided that, in
the case of any Facility no longer owned, leased, operated or used by Company or
any of its Subsidiaries, Company shall only be obligated to use its best efforts
to obtain permission for Administrative Agent's professional consultant to
conduct an investigation of such Facility. For purposes of conducting such a
review and/or investigation, Company hereby grants to Administrative Agent and
its agents, employees, consultants and contractors the right to enter into or
onto any Facilities currently owned, leased, operated or used by Company or any
of its Subsidiaries and to perform such tests on such property (including taking
samples of soil, groundwater and suspected asbestos-containing materials) as are
reasonably necessary in connection therewith. Any such investigation of any
Facility shall be conducted, unless otherwise agreed to by Company and
Administrative Agent, during normal business hours and, to the extent reasonably
practicable, shall be conducted so as not to interfere with the ongoing
operations at such Facility or to cause any damage or loss to any property at
such Facility. Company and Administrative Agent hereby acknowledge and agree
that any report of any investigation conducted at the request of Administrative
Agent pursuant to this subsection 6.7A will be obtained and shall be used by
Administrative Agent and Lenders for the purposes of Lenders' internal credit
decisions, to monitor and police the Loans and to protect Lenders' security
interests, if any, created by the Loan Documents. Administrative Agent agrees to
deliver a copy of any such report to Company with the understanding that Company
acknowledges and agrees that (x) it will indemnify and hold harmless
Administrative Agent and each Lender from any costs, losses or liabilities
relating to Company's use of or reliance on such report, (y) neither
Administrative Agent nor any Lender makes any representation or warranty with
respect to such report, and (z) by delivering such report to Company, neither
Administrative Agent nor any Lender is requiring or recommending the
implementation of any suggestions or recommendations contained in such report.
B. Environmental Disclosure. Company will deliver to Syndication Agent,
Administrative Agent and Lenders:
(i) Environmental Audits and Reports. As soon as practicable following
receipt thereof, copies of all environmental audits, investigations,
analyses and reports of any kind or character, whether prepared by
personnel of Company or any of its Subsidiaries or by independent
consultants, governmental authorities or any other Persons, with respect to
significant environmental matters at any Facility which, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect or with respect to any Environmental Claims which, individually or
in the aggregate, could reasonably be expected to result in a Material
Adverse Effect;
104
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly upon
the occurrence thereof, written notice describing in reasonable detail (a)
any Release required to be reported to any national, regional, federal,
European Union, state or local governmental or regulatory agency under any
applicable Environmental Laws, (b) any remedial action taken by Company or
any other Person in response to (1) any Hazardous Materials Activities the
existence of which has a reasonable possibility of resulting in one or more
Environmental Claims having, individually or in the aggregate, a Material
Adverse Effect, or (2) any Environmental Claims that, individually or in
the aggregate, have a reasonable possibility of resulting in a Material
Adverse Effect, and (c) Company's discovery of any occurrence or condition
on any real property adjoining or in the vicinity of any Facility that
could cause such Facility or any part thereof to be subject to any material
restrictions on the ownership, occupancy, transferability or use thereof
under any Environmental Laws.
(iii) Written Communications Regarding Environmental Claims, Releases,
Etc. As soon as practicable following the sending or receipt thereof by
Company or any of its Subsidiaries, a copy of any and all written
communications with respect to (a) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of giving
rise to a Material Adverse Effect, (b) any Release required to be reported
to any national, regional, federal, European Union, state or local
governmental or regulatory agency, and (c) any request for information from
any governmental agency that suggests such agency is investigating whether
Company or any of its Subsidiaries may be potentially responsible for any
Hazardous Materials Activity.
(iv) Notice of Certain Proposed Actions Having Environmental Impact.
Prompt written notice describing in reasonable detail (a) any proposed
acquisition of stock, assets, or property by Company or any of its
Subsidiaries that could reasonably be expected to (1) expose Company or any
of its Subsidiaries to, or result in, Environmental Claims that could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or (2) affect the ability of Company or any of its
Subsidiaries to maintain in full force and effect all material Governmental
Authorizations required under any Environmental Laws for their respective
operations and (b) any proposed action to be taken by Company or any of its
Subsidiaries to commence manufacturing or other industrial operations or to
modify current operations in a manner that could reasonably be expected to
subject Company or any of its Subsidiaries to any additional obligations or
requirements under any Environmental Laws that could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.
(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be reasonably requested
by Syndication Agent or Administrative Agent in relation to any matters
disclosed pursuant to this subsection 6.7.
105
C. Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials Activities.
Company shall promptly undertake, and shall cause each of its Subsidiaries
promptly to undertake, any and all investigations, studies, sampling,
testing, abatement, cleanup, removal, remediation or other response actions
necessary to remove, remediate, clean up or xxxxx any Hazardous Materials
Activity on, under or about any Facility that is in violation of any
Environmental Laws or that presents a material risk of giving rise to an
Environmental Claim. In the event Company or any of its Subsidiaries
undertakes any such action with respect to any Hazardous Materials, Company
or such Subsidiary shall conduct and complete such action in compliance
with all applicable Environmental Laws and in accordance with the policies,
orders and directives of all national, regional, federal, European Union,
state and local governmental authorities except when, and only to the
extent that, Company's or such Subsidiary's liability with respect to such
Hazardous Materials Activity is being contested in good faith by Company or
such Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations of
Environmental Laws. Company shall promptly take, and shall cause each of
its Subsidiaries promptly to take, any and all actions necessary to (i)
cure any material violation of (or liability under) applicable
Environmental Laws by Company or its Subsidiaries and (ii) make an
appropriate response to any Environmental Claim against Company or any of
its Subsidiaries and discharge any obligations it may have to any Person
thereunder.
6.8 Execution of Guaranties and Personal Property Collateral Documents by
Certain Subsidiaries and Future Subsidiaries.
A. U.K. Plessey Entities. Within 60 days following the Closing Date,
Company shall cause each of PSL and MEDL to (i) become a Subsidiary Guarantor
and execute and deliver to Administrative Agent an accession undertaking to the
U.K. Guarantee and Debenture and become a lender under the IntraGroup Loan
Agreement, (ii) deliver evidence satisfactory to the Administrative Agent and
Syndication Agent that such Subsidiary has complied with the provisions and
procedures required by sections 155 to 158 of the Companies Xxx 0000 in relation
thereto (including an auditor's letter addressed to the Agents and Lender in
form and substance reasonably satisfactory to Administrative Agent and
Syndication Agent) and (iii) take all such further actions and execute all such
further documents and instruments (including actions, documents and instruments
comparable to those described in subsections 4.1I and 6.9) as may be necessary
or, in the opinion of Administrative Agent or Syndication Agent, desirable to
create in favor of Administrative Agent, for the benefit of Lenders, a valid and
(except to the extent expressly provided in the U.K. Guarantee and Debenture)
perfected First Priority Lien on all of the personal and mixed property assets
of such Subsidiary described in the applicable forms of Collateral Documents;
provided, however, that Company shall not be required to cause MEDL to comply
with this subsection 6.8A in the event that, within 30 days of the Closing Date,
either (a) MEDL is merged with PSL or Mitel Telecom with PSL or Mitel Telecom,
as the case may be, being the surviving company or (b) MEDL is dissolved, its
business wound-up and all of its assets distributed to Mitel Telecom.
106
B. Mitel AB. Company shall, and shall cause Mitel AB, to (i) use its best
efforts to obtain an exemption from the relevant Swedish tax authority to permit
Mitel AB to become a Subsidiary Guarantor and grant a charge on all its assets
to Administrative Agent for the benefit of Lenders and (ii) notify
Administrative Agent and Syndication Agreement of any notices received by Mitel
AB or its advisors in connection with such application. In the event such an
exemption is granted Administrative Agent and Syndication Agent may at any time
thereafter (so long as Administrative Agent and Syndication Agent shall have
received the real estate appraisals pursuant to subsection 6.10A) notify Company
that Mitel AB must become a Subsidiary Guarantor and execute and deliver a
Subsidiary Security Agreement (Sweden) substantially in the form of Exhibit
XXVII annexed hereto and must otherwise comply with the requirements set forth
in subsections 6.8C and 6.9 (including paying any applicable stamp taxes in
connection with the execution of any relevant Loan Documents) and Company shall
thereupon cause Mitel AB to take all such actions within ten Business Days of
such notice.
C. Execution of Subsidiary Guaranty and Personal Property Collateral
Documents. In addition to the provisions set forth above in subsections 6.8A and
6.8B, in the event that any Subsidiary of Company existing on the Closing Date
(other than Plessey GmbH, Plessey France SA and Marconi Electronic Devices SA)
that has not previously executed a Guaranty hereafter owns or acquires assets
(including receivables) on a consolidated basis with an aggregate fair market
value (without netting such fair market value against any liability of such
Subsidiary) exceeding $10,000,000, or in the event that any Person becomes a
Subsidiary of Company after the date hereof, Company will promptly notify
Administrative Agent of that fact and, subject to clause (iii) below, cause such
Subsidiary (i) to execute and deliver to Administrative Agent a counterpart of
the Subsidiary Guaranty or, in the case such Subsidiary is a U.K. Subsidiary, an
accession undertaking to the U.K. Guarantee and Debenture, in each case with
such modifications thereto as may be reasonably requested by Administrative
Agent or Syndication Agent (including any such changes required to comply with
local law), (ii) to execute and deliver to Administrative Agent such pledge and
security agreements as Administrative Agent or Syndication Agent may reasonably
request and to take all such further actions and execute all such further
documents and instruments (including actions, documents and instruments
comparable to those described in subsection 4.1I) as may be necessary or, in the
opinion of Administrative Agent or Syndication Agent, desirable to create in
favor of Administrative Agent, for the benefit of Lenders, a valid and (except
to the extent expressly provided in the U.K. Guarantee and Debenture) perfected
First Priority Lien on all of the personal and mixed property assets of such
Subsidiary described in the applicable forms of Collateral Documents and (iii)
in the case of any such Subsidiary which is a U.K. Subsidiary, cause such
Subsidiary to comply with the provisions of subsection 6.8A within 60 days of
such Subsidiary's becoming subject to this subsection 6.8C.
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real
Property Collateral.
A. Conforming Leasehold Interests. If Company or any of its Subsidiaries
acquires any Material Leasehold Property, Company shall, or shall cause such
Subsidiary to, use its best efforts to cause such Leasehold Property to be a
Conforming Leasehold Interest.
B. Additional Mortgages, Etc. From and after the Closing Date, in the event
that (i) Company or any Subsidiary Guarantor acquires any fee or freehold
interest in
107
real property or any Material Leasehold Property or (ii) at the time any Person
becomes a Subsidiary Guarantor, such Person owns or holds any fee or freehold
interest in real property or any Material Leasehold Property, in either case
excluding any such Real Property Asset the encumbrancing of which requires the
consent of any applicable lessor or (in the case of clause (ii) above)
then-existing senior lienholder, where Company and its Subsidiaries are unable
to obtain such lessor's or senior lienholder's consent (any such non-excluded
Real Property Asset described in the foregoing clause (i) or (ii) being an
"Additional Mortgaged Property"), Company or such Subsidiary Guarantor shall
deliver to Administrative Agent, as soon as practicable after such Person
acquires such Additional Mortgaged Property or becomes a Subsidiary Guarantor,
as the case may be, the following:
(i) Additional Mortgage. A fully executed and notarized Mortgage or
equivalent document reasonably acceptable to Administrative Agent and
Syndication Agent (an "Additional Mortgage"), in proper form for recording
in all appropriate places in all applicable jurisdictions, encumbering the
interest of such Loan Party in such Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to such
Loan Party, in form and substance satisfactory to Administrative Agent and
Syndication Agent and their respected counsel, as to the due authorization,
execution and delivery by such Loan Party of such Additional Mortgage and
such other matters as Administrative Agent or Syndication Agent may
reasonably request, and (b) if required by Administrative Agent or
Syndication Agent, an opinion of counsel (which counsel shall be reasonably
satisfactory to Administrative Agent and Syndication Agent) in the state,
province or other relevant jurisdiction in which such Additional Mortgaged
Property is located with respect to the enforceability of the form of
Additional Mortgage to be recorded in such state, province or other
relevant jurisdiction and such other matters (including any matters
governed by the laws of such state, province or other relevant jurisdiction
regarding personal property security interests in respect of any
Collateral) as Administrative Agent or Syndication Agent may reasonably
request, in each case in form and substance reasonably satisfactory to
Administrative Agent and Syndication Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold Interest. In
the case of an Additional Mortgaged Property consisting of a Leasehold
Property, (a) a Landlord Consent and Estoppel and (b) evidence that such
Leasehold Property is a Recorded Leasehold Interest;
(iv) Title Insurance. With respect to such Additional Mortgaged
Property located in the United States of America, (a) if required by
Administrative Agent or Syndication Agent, an ALTA mortgagee title
insurance policy or an unconditional commitment therefor or an equivalent
policy or commitment therefor satisfactory to Administrative Agent and
Syndication Agent) (an "Additional Mortgage Policy") issued by the Title
Company with respect to such Additional Mortgaged Property, in an amount
satisfactory to Administrative Agent and Syndication Agent, insuring fee
simple title to, or a valid leasehold interest in, such Additional
Mortgaged Property vested in such Loan Party and assuring Administrative
Agent and Syndication Agent that such Additional Mortgage creates a valid
and enforceable First Priority mortgage Lien on such Additional Mortgaged
Property, subject only to a standard survey exception, which Additional
Mortgage Policy (1) shall include an endorsement for mechanics' liens, for
future advances under this Agreement and for any other matters
108
reasonably requested by Administrative Agent or Syndication Agent and (2)
shall provide for affirmative insurance and such reinsurance as
Administrative Agent or Syndication Agent may reasonably request, all of
the foregoing in form and substance reasonably satisfactory to
Administrative Agent and Syndication Agent; and (b) evidence satisfactory
to Administrative Agent and Syndication Agent that such Loan Party has (i)
delivered to the Title Company all certificates and affidavits required by
the Title Company in connection with the issuance of the Additional
Mortgage Policy and (ii) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title Company in
connection with the issuance of the Additional Mortgage Policy and all
recording and stamp taxes (including mortgage recording and intangible
taxes) payable in connection with recording the Additional Mortgage in the
appropriate real estate records;
(v) Title Report. If no Additional Mortgage Policy is required with
respect to such Additional Mortgaged Property, a title report issued by the
Title Company or (or title certificate, report on title or equivalent
report with respect to any Additional Mortgaged Property located outside
the United States of America) thereto, dated not more than 30 days prior to
the date such Additional Mortgage is to be recorded and satisfactory in
form and substance to Administrative Agent and Syndication Agent;
(vi) Copies of Documents Relating to Title Exceptions. Copies of all
recorded documents listed as exceptions to title or otherwise referred to
in the Additional Mortgage Policy or title report delivered pursuant to
clause (v) or (vi) above;
(vii) Matters Relating to U.S. Flood Hazard Properties. To the extent
such Additional Mortgaged Property is located in the United States of
America, (a) evidence, which may be in the form of a letter from an
insurance broker or a municipal engineer, as to (1) whether such Additional
Mortgaged Property is a Flood Hazard Property and (2) if so, whether the
community in which such Flood Hazard Property is located is participating
in the National Flood Insurance Program, (b) if such Additional Mortgaged
Property is a Flood Hazard Property, such Loan Party's written
acknowledgement of receipt of written notification from Administrative
Agent and Syndication Agent (1) that such Additional Mortgaged Property is
a Flood Hazard Property and (2) as to whether the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, and (c) in the event such Additional Mortgaged Property
is a Flood Hazard Property that is located in a community that participates
in the National Flood Insurance Program, evidence that Company has obtained
flood insurance in respect of such Flood Hazard Property to the extent
required under the applicable regulations of the Board of Governors of the
Federal Reserve System;
(viii) Real Property Taxes. Evidence satisfactory to the
Administrative Agent and Syndication Agent of the payment by such
Subsidiary Guarantor with respect to such Additional Mortgaged Property of
all unpaid real property taxes due and payable as of the date of the
applicable Additional Mortgage;
109
(ix) Special U.K. Matters. Delivery to Administrative Agent of (i) the
results of H.M. Land Registry clear priority searches in form 94D in favor
of the Administrative Agent giving a priority period of not less than 28
days relating to Real Property Assets of any such Subsidiary Guarantor
located in the United Kingdom or (in the case of unregistered property)
H.M. Land Charges Registry searches having an unexpired priority period of
not less than 18 days in respect of all estate owners since the date of the
root of title with any entries thereon certified as not affecting, (ii) a
duly completed and signed Land Registry application form A4 for the
registration of the U.K. Guarantee and Debenture together with a cheque
made payable to H.M. Land Registry in respect of the registration fee,
(iii) all title deeds to any Additional Mortgaged Property located in the
United Kingdom, (iv) signed but undated Notices of Charge addressed to the
landlord of each Leasehold Property of any such Subsidiary Guarantor
located in the United Kingdom, together with a duplicate thereof; and
(x) Environmental Audit. If required by Administrative Agent or
Syndication Agent, reports and other information, in form, scope and
substance satisfactory to Administrative Agent and Syndication Agent and
prepared by environmental consultants satisfactory to Administrative Agent
and Syndication Agent, concerning any environmental hazards or liabilities
to which Company or any of its Subsidiaries may be subject with respect to
such Additional Mortgaged Property.
C. Real Estate Appraisals. Company shall, and shall cause each of its
Subsidiaries to, permit an independent real estate appraiser satisfactory to
Administrative Agent and Syndication Agent, upon reasonable notice, to visit and
inspect any Additional Mortgaged Property for the purpose of preparing an
appraisal of such Additional Mortgaged Property satisfying the requirements of
any applicable laws and regulations (in each case to the extent required under
such laws and regulations as determined by Administrative Agent and Syndication
Agent in its discretion).
6.10 Certain Post-Closing Matters.
A. Real Estate Appraisals. Within 60 days following the Closing Date,
Administrative Agent shall have received appraisals concerning the Closing Date
Mortgaged Properties, the properties located at Swindon (England), and
Plymouth (England) as more particularly described on Schedule 5.5 and any other
Real Estate Assets of Company or any of its Subsidiaries reasonably
requested by Administrative Agent or Syndication Agent on or before the Closing
Date, in each case from one or more independent real estate appraisers
reasonably satisfactory to Syndication Agent and Administrative Agent, in
form, scope and substance satisfactory to Syndication Agent and
Administrative Agent and satisfying the requirements of any applicable laws and
regulations, in each case to the extent required under such laws and regulations
as determined by Administrative Agent in its discretion.
B. Bromont. Within 30 days following the Closing Date, Company shall take
such actions and deliver to Administrative Agent such items as Administrative
Agent or Syndication Agent may reasonably request to ensure that Administrative
Agent has a First Priority Lien on all immovable property of Company located in
the Province of Quebec including the delivery to Administrative Agent of (i) a
title opinion from XxXxxxxx Xxxxxxxx with respect to the Bromont property
located in the Province of Quebec as identified on Schedule 4.1H annexed hereto
(the "Bromont Property") (such title opinion to indicate that
110
Company is the owner of the Bromont Property free and clear of any Liens (other
than Permitted Encumbrances) and that the Deed of Hypothec executed and
delivered by Company on the Closing Date substantially in the form of Exhibit
XVI annexed hereto is a valid First Priority Lien on the Bromont Property) and
(ii) a complete certificate of location, in each case in form and substance
satisfactory to Administrative Agent and Syndication Agent.
X. Xxxxxxx. Within 30 days following the Closing Date, Company shall cause
legal and beneficial ownership of the property located at Lincoln, England, as
more specifically described on Schedule 5.5 annexed hereto, to vest in PSL.
D. Scotts Valley. Within 60 days following the Closing Date, Administrative
Agent shall have received each of the items described in subsection 4.1H with
respect to the property of Mitel Semiconductor Americas Inc. (formerly known as
GEC Plessey Semiconductors Inc.) located in Scotts Valley as identified on
Schedule 4.1H annexed hereto.
E. Discounted Notes. In the event Mitel Barbados receives any payments on
redemption of any Discounted Note, Company shall ensure that Mitel Barbados
applies the total amount of such payments (net of costs and applicable taxes) to
either (i) subscribe for additional Discounted Notes within 24 hours of such
repayment or (ii) make a dividend payment to Company within two Business Days of
such receipt; it being understood that such net payments may be applied under
clauses (i) and (ii) in such proportions as Mitel Barbados may determine.
F. NatWest Letter of Credit. Within ten Business Days of the Closing Date,
(i) Company shall have terminated any commitment to lend under, and repaid all
outstanding Indebtedness under, the credit facility between National Westminster
Bank and PSL and (ii) the CIBC Letter of Credit shall have expired or been
terminated and all Liens on any collateral securing Company's repayment
obligations with respect thereto shall have been released and terminated.
6.11 Interest Rate Protection.
At all times after the date which is 30 days after the Closing Date,
Company shall maintain in effect one or more Interest Rate Agreements with
respect to the Loans, each such Interest Rate Agreement to be for a term and in
form and substance reasonably satisfactory to Syndication Agent and
Administrative Agent, which Interest Rate Agreements shall effectively limit the
Unadjusted Eurodollar Rate Component (as hereinafter defined) of the interest
costs to Company with respect to an aggregate notional principal amount of not
less than 50% of the aggregate principal amount of the Term Loans outstanding
from time to time (based on the assumption that such notional principal amount
was a Eurodollar Rate Loan with an Interest Period of three months) to a rate
equal to not more than 7.5% per annum. For purposes of this subsection 6.10, the
term "Unadjusted Eurodollar Rate Component" means that component of the interest
costs to Company in respect of a Eurodollar Rate Loan that is based upon the
rate obtained pursuant to the first two paragraphs of the definition of Adjusted
Eurodollar Rate.
111
SECTION 7.
COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 7.
7.1 Indebtedness.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4 and, upon any
matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(iii) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness in respect of Capital Leases in an aggregate amount
not to exceed $60,000,000 at any time outstanding; provided that such
maximum amount shall be increased by $5,000,000 on each anniversary of the
Closing Date;
(iv) Company may become and remain liable with respect to Indebtedness
to any of its wholly-owned Subsidiaries, and any wholly-owned Subsidiary of
Company may become and remain liable with respect to Indebtedness to
Company or any other wholly-owned Subsidiary of Company; provided that (a)
all such intercompany Indebtedness shall be evidenced by promissory notes
(each, an "Intercompany Note"), (b) all such intercompany Indebtedness owed
by Company to any of its Subsidiaries shall be subordinated in right of
payment to the payment in full of the Obligations pursuant to the terms of
the applicable promissory notes or an intercompany subordination agreement,
and (c) any payment by any Subsidiary of Company under any guaranty of the
Obligations shall result in a pro tanto reduction of the amount of any
intercompany Indebtedness owed by such Subsidiary to Company or to any of
its Subsidiaries for whose benefit such payment is made;
(v) Company and its Subsidiaries, as applicable, may remain liable
with respect to Indebtedness described in Schedule 7.1 annexed hereto;
(vi) Company and its Subsidiaries may become and remain liable with
respect to other Indebtedness in an aggregate principal amount not to
exceed $20,000,000 at any time outstanding.
112
7.2 Liens and Related Matters.
A. Prohibition on Liens. Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens described in Schedule 7.2 annexed hereto;
(iv) Liens on cash deposits at CIBC securing the Company's obligations
under the CIBC Letter of Credit pursuant to subsection 7.4(x);
and
(v) Other Liens securing Indebtedness in an aggregate amount not to
exceed $10,000,000 at any time outstanding.
B. Equitable Lien in Favor of Lenders. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. No Further Negative Pledges. Except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an Asset Sale, neither Company nor any
of its Subsidiaries shall enter into any agreement (other than any agreement
prohibiting only the creation of Liens securing Subordinated Indebtedness)
prohibiting the creation or assumption of any Lien upon any of its properties or
assets, whether now owned or hereafter acquired.
D. No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Except as provided herein, Company will not, and will not permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Company or any
other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or
advances to Company or any other Subsidiary of Company, or (iv) transfer any of
its property or assets to Company or any other Subsidiary of Company.
113
7.3 Investments; Joint Ventures.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Company and its Subsidiaries may make and own Investments in Cash
Equivalents;
(ii) Company and its Subsidiaries may (a) continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries of
Company, (b) make and maintain Investments in any Subsidiary Guarantor from
and after the Closing Date and (c) make Investments in Immaterial
Subsidiaries from and after the Closing Date in an aggregate cumulative
amount not to exceed $5,000,000; provided, however, that to the extent any
such Immaterial Subsidiary becomes a Subsidiary Guarantor after or as a
result of any such Investment under this clause (c), the amount of all
Investments in such Immaterial Subsidiary pursuant to this subsection
7.3(ii) shall not then be counted towards the foregoing $5,000,000
limitation;
(iii) Company and its Subsidiaries may make intercompany loans to the
extent permitted under subsection 7.1(iv);
(iv) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted by subsection 7.8;
(v) Company and its Subsidiaries may continue to own the Investments
owned by them and described in Schedule 7.3 annexed hereto; and
(vi) Company and its Subsidiaries may make and own other Investments
in an aggregate amount not to exceed at any time $10,000,000.
7.4 Contingent Obligations.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable with respect
to Contingent Obligations in respect of the Guaranties;
(ii) Company may become and remain liable with respect to Contingent
Obligations in respect of Letters of Credit;
(iii) Company may become and remain liable with respect to Contingent
Obligations under Interest Rate Agreements required under subsection 6.11
in an aggregate notional amount not to exceed the principal amount of the
Term Loans at any time outstanding; provided that Company shall not enter
into any Interest Rate Agreement for the purposes of arbitrage or
speculation;
(iv) Company may become and remain liable with respect to Contingent
Obligations under Currency Agreements entered into in the ordinary course
of
114
Company's business and designed to hedge against fluctuations in currency
values; provided that (a) Company shall not enter into any such Currency
Agreement with a term in excess of 24 months and (b) the aggregate notional
principal amount outstanding at any date of determination under all such
Currency Agreements shall not exceed $500,000,000; it being understood and
agreed that Company shall not enter into any Currency Agreement for the
purposes of arbitrage or speculation;
(v) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of customary indemnification
and purchase price adjustment obligations incurred in connection with Asset
Sales or other sales of assets;
(vi) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations under guarantees in the ordinary course
of business of the obligations of suppliers, customers, franchisees and
licensees of Company and its Subsidiaries in an aggregate amount not to
exceed at any time $10,000,000;
(vii) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of any Indebtedness of Company
or any of its Subsidiaries permitted by subsection 7.1(vi);
(viii) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of surety bonds for business
communications systems bids to install PBX systems in an aggregate amount
not to exceed at any time $30,000,000;
(ix) Company and its Subsidiaries, as applicable, may remain liable
with respect to Contingent Obligations described in Schedule 7.4 annexed
hereto, it being understood and agreed that any Interest Rate Agreements or
Currency Agreements listed on such Schedule shall be included in the
calculations contained in subsections 7.4(iii) and 7.4(iv), as applicable;
(x) during the 14-day period next succeeding the Closing Date, Company
may become and remain liable with respect to the Contingent Obligations in
respect of the CIBC Letter of Credit;
(xi) Company may become and remain liable with respect to a guaranty
of the obligations of PSL pursuant to that certain Capital Lease in respect
of the property located at Plymouth, England; provided that Company's
aggregate liability under such guaranty at any time outstanding shall not
exceed $17,000,000; and
(xii) Company and its Subsidiaries may become and remain liable with
respect to other Contingent Obligations; provided that the maximum
aggregate liability, contingent or otherwise, of Company and its
Subsidiaries in respect of all such Contingent Obligations shall at no time
exceed $10,000,000.
115
7.5 Restricted Junior Payments.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that so long as no Event of Default or
Potential Event of Default shall have occurred and be continuing or shall be
caused thereby, Company may (a) make scheduled dividend payments to the holders
of the Company Preferred Stock pursuant to the terms of the Company Certificate
of Designations in an aggregate amount not to exceed Cdn$3,250,000 in any Fiscal
Year (b) make scheduled repurchases of shares of Company Preferred Stock
pursuant to the Company Certificate of Designations for an aggregate
consideration not to exceed Cdn$2,250,000 in any Fiscal Year, and (c) may redeem
or repurchase options to purchase shares of Company's common stock granted to
Company's employees in lieu of such employees exercising such options.
7.6 Financial Covenants.
A. Minimum Interest Coverage Ratio. Company shall not permit the ratio of
(i) Consolidated Adjusted EBITDA to (ii) Consolidated Interest Expense as
measured on the last day of each Fiscal Quarter (the "Reference Date"),
commencing with the last day of the first Fiscal Quarter of Fiscal Year 1999,
for any four Fiscal Quarter period ending on any Reference Date, to be less than
the correlative ratio applicable below:
116
================================================================================
Minimum
Interest
Reference Date Coverage Ratio
================================================================================
First Fiscal Quarter 1999 4.50:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 1999 4.75:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 1999 5.00:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 1999 5.00:1.00
--------------------------------------------------------------------------------
First Fiscal Quarter 2000 7.00:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 2000 7.00:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 2000 7.00:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 2000 7.00:1.00
--------------------------------------------------------------------------------
First Fiscal Quarter 2001 10.00:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 2001 10.00:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 2001 10.00:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 2001 10.00:1.00
--------------------------------------------------------------------------------
First Fiscal Quarter 2002 10.00:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 2002 10.00:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 2002 10.00:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 2002 10.00:1.00
--------------------------------------------------------------------------------
First Fiscal Quarter 2003 10.00:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 2003 10.00:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 2003 10.00:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 2003 10.00:1.00
--------------------------------------------------------------------------------
First Fiscal Quarter 2004 10.00:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 2004 10.00:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 2004 10.00:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 2004 10.00:1.00
================================================================================
B. Minimum Fixed Charge Coverage Ratio. Company shall not permit the ratio
of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Fixed Charges as
measured on the last day of each Fiscal Quarter (the "Reference Date"),
commencing with the last day of the
117
first Fiscal Quarter of Fiscal Year 1999, for any four Fiscal Quarter period
ending on any Reference Date, to be less than the correlative ratio applicable
below:
118
================================================================================
Minimum
Fixed Charge
Reference Date Coverage Ratio
================================================================================
First Fiscal Quarter 1999 1.05:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 1999 1.05:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 1999 1.05:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 1999 1.05:1.00
--------------------------------------------------------------------------------
First Fiscal Quarter 2000 1.10:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 2000 1.10:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 2000 1.10:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 2000 1.10:1.00
--------------------------------------------------------------------------------
First Fiscal Quarter 2001 1.20:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 2001 1.20:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 2001 1.20:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 2001 1.20:1.00
--------------------------------------------------------------------------------
First Fiscal Quarter 2002 1.25:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 2002 1.25:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 2002 1.25:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 2002 1.25:1.00
--------------------------------------------------------------------------------
First Fiscal Quarter 2003 1.25:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 2003 1.25:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 2003 1.25:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 2003 1.25:1.00
--------------------------------------------------------------------------------
First Fiscal Quarter 2004 1.25:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 2004 1.25:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 2004 1.25:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 2004 1.25:1.00
================================================================================
119
C. Maximum Leverage Ratio. Company shall not permit the Consolidated
Leverage Ratio as measured on the last day of each Fiscal Quarter (the
"Reference Date"), commencing with the last day of the first Fiscal Quarter of
Fiscal Year 1999, for any four Fiscal Quarter period ending on any Reference
Date, to exceed the correlative ratio applicable below:
120
================================================================================
Maximum
Reference Date Leverage Ratio
================================================================================
First Fiscal Quarter 1999 2.60:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 1999 2.40:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 1999 2.30:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 1999 2.10:1.00
--------------------------------------------------------------------------------
First Fiscal Quarter 2000 1.50:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 2000 1.50:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 2000 1.50:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 2000 1.50:1.00
--------------------------------------------------------------------------------
First Fiscal Quarter 2001 1.00:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 2001 1.00:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 2001 1.00:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 2001 1.00:1.00
--------------------------------------------------------------------------------
First Fiscal Quarter 2002 1.00:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 2002 1.00:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 2002 1.00:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 2002 1.00:1.00
--------------------------------------------------------------------------------
First Fiscal Quarter 2003 1.00:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 2003 1.00:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 2003 1.00:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 2003 1.00:1.00
--------------------------------------------------------------------------------
First Fiscal Quarter 2004 1.00:1.00
--------------------------------------------------------------------------------
Second Fiscal Quarter 2004 1.00:1.00
--------------------------------------------------------------------------------
Third Fiscal Quarter 2004 1.00:1.00
--------------------------------------------------------------------------------
Fourth Fiscal Quarter 2004 1.00:1.00
================================================================================
D. Minimum Consolidated Net Worth. Company shall not permit Consolidated
Net Worth at any time during any Fiscal Quarter commencing with the first Fiscal
Quarter of the 1999 Fiscal Year to be less than the sum of (i) Consolidated Net
Worth as of the last day of the next preceding Fiscal Quarter plus (ii) 75% of
Consolidated Net Income during such Fiscal Quarter.
121
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.
Company shall not, and shall not permit any of its Subsidiaries to, alter
the corporate, capital or legal structure of Company or any of its Subsidiaries,
or enter into any transaction of merger or consolidation, or liquidate, wind-up
or dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sub-lease (as lessor or sublessor), transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any part of its business,
property or assets, whether now owned or hereafter acquired, or acquire by
purchase or otherwise all or substantially all the business, property or fixed
assets of, or stock or other evidence of beneficial ownership of, any Person or
any division or line of business of, or operating unit, business unit or
technology unit of any Person, except:
(i) (a) any Subsidiary of Company may be merged with or into Company
or any wholly-owned Subsidiary Guarantor, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Company or any wholly-owned
Subsidiary Guarantor; provided that, in the case of such a merger, Company
or such wholly-owned Subsidiary Guarantor shall be the continuing or
surviving corporation and (b) any Immaterial Subsidiary of Company may be
merged with or into any wholly-owned Immaterial Subsidiary of Company, or
be liquidated, wound up or dissolved, or all or any part of its business,
property or assets may be conveyed, sold, leased, transferred or otherwise
disposed of, in one transaction or a series of transactions, to any
wholly-owned Immaterial Subsidiary;
(ii) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted under subsection 7.8;
(iii) Company and its Subsidiaries may dispose of obsolete, worn out
or surplus property in the ordinary course of business;
(iv) Company and its Subsidiaries may sell or otherwise dispose of
assets in transactions that do not constitute Asset Sales; provided that
the consideration received for such assets shall be in an amount at least
equal to the fair market value thereof;
(v) so long as no Event of Default has occurred and is continuing or
would be caused thereby, Company and its Subsidiaries may consummate the
Acquisition and may make Permitted Acquisitions; provided that Company
shall comply with any requirements set forth herein (including under
subsection 6.1(xviii)) and, to the extent such Permitted Acquisition is of
the equity interest of any Person, such Person shall be a Subsidiary of
Company upon giving effect to such Permitted Acquisition or shall be merged
with and into Company or one of its Subsidiaries within two days of the
consummation of such Permitted Acquisition; provided further that,
notwithstanding anything in the foregoing to the contrary, (a) during the
180 day period following the Closing Date, Company and its Subsidiaries may
not make (1) more than two Permitted Acquisitions and (2) any Permitted
Acquisition in one or a series of related transactions if (x) the aggregate
purchase price of such Permitted Acquisition exceeds $50,000,000 or (y) the
aggregate purchase price of all such Permitted Acquisitions during such 180
day period exceeds $75,000,000; and (b) from and after the 181st day
following the Closing Date, Company and its Subsidiaries shall not make any
Permitted Acquisition in one or a series of related transactions if (A) the
aggregate
122
purchase price of such Permitted Acquisition exceeds $25,000,000 or (B) the
aggregate purchase price of all such Permitted Acquisitions since such
181st day exceeds $35,000,000; and
(vi) subject to subsection 7.13 and so long as no Event of Default has
occurred and is continuing or would be caused thereby, (a) PSL may make
Asset Sales in respect of the property and business located in Lincoln,
England as more fully described on Schedule 5.5 annexed hereto, (b) Company
and its Subsidiaries may make Asset Sales in connection with the closing of
offices of Company and its Subsidiaries which offices were made redundant
to the business of Company and its Subsidiaries as a result of the
Acquisition as determined by the Board of Directors of Company and (c)
Company and its Subsidiaries may make other Asset Sales of assets having a
fair market value not in excess of $25,000,000; provided that (x) the
consideration received for any assets in the foregoing clauses (a) through
(c) above shall be in an amount at least equal to the fair market value
thereof; (y) the sole consideration received shall be cash; and (z) the
proceeds of such Asset Sales shall be applied as required by subsection
2.4B(iii)(a).
7.8 Consolidated Capital Expenditures.
Company shall not, and shall not permit its Subsidiaries to, make or incur
Consolidated Capital Expenditures, in any Fiscal Year indicated below, in an
aggregate amount in excess of the corresponding amount set forth below opposite
such Fiscal Year (the "Target Amount"); provided that if the aggregate amount of
Consolidated Capital Expenditures for the immediately preceding Fiscal Year
(commencing with the 1999 Fiscal Year) is less than the Target Amount for such
immediately preceding Fiscal Year, then 50% of the sum of (i) the Target Amount
for such immediately preceding Fiscal Year (as adjusted pursuant to this
subsection 7.8) minus (ii) the Consolidated Capital Expenditures for such
immediately preceding Fiscal Year, shall be added to the Target Amount for the
current Fiscal Year:
===========================================================
Maximum
Fiscal Year Consolidated
Capital
Expenditures
===========================================================
1999 $110,000,000
-----------------------------------------------------------
2000 $130,000,000
-----------------------------------------------------------
2001 $135,000,000
-----------------------------------------------------------
2002 $145,000,000
-----------------------------------------------------------
2003 $160,000,000
-----------------------------------------------------------
2004 $175,000,000
===========================================================
123
7.9 Restriction on Operating Leases.
Company shall not, and shall not permit any of its Subsidiaries to, become
liable in any way, whether directly or by assignment or as a guarantor or other
surety, for the obligations of the lessee under any Operating Lease (other than
intercompany leases between Company and its wholly owned Subsidiaries), unless,
immediately after giving effect to the incurrence of liability with respect to
such Operating Lease, the Consolidated Rental Payments at the time in effect
during the then current Fiscal Year shall not exceed $20,000,000.
7.10 Sales and Lease-Backs.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Company or
any of its Subsidiaries) or (ii) which Company or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Company or any of its Subsidiaries
to any Person (other than Company or any of its Subsidiaries) in connection with
such lease; provided, however, that Mitel Telecom may become and remain liable
as lessee with respect to (a) sales and lease-back transactions with respect to
assets with a fair market value not to exceed (pound)2,500,000 in the aggregate
for any Fiscal Year for the purpose of acquiring such assets and (b) sales and
lease-back transactions in existence on the Closing Date and set forth on
Schedule 7.10 annexed hereto.
7.11 Sale or Discount of Receivables.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable.
7.12 Transactions with Shareholders and Affiliates.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Company or with any Affiliate of Company or of any such holder, on terms that
are less favorable to Company or that Subsidiary, as the case may be, than those
that might be obtained at the time from Persons who are not such a holder or
Affiliate; provided that the foregoing restriction shall not apply to (i) any
transaction between Company and any of its wholly-owned Subsidiaries or between
any of its wholly-owned Subsidiaries or (ii) reasonable and customary fees paid
to members of the Boards of Directors of Company and its Subsidiaries.
7.13 Disposal of Subsidiary Stock.
Except for any sale of 100% of the capital stock or other equity Securities
of any of its Subsidiaries in compliance with the provisions of subsection
7.7(v), Company shall not:
124
(i) directly or indirectly sell, assign, pledge or otherwise encumber
or dispose of any shares of capital stock or other equity Securities of any
of its Subsidiaries, except to qualify directors if required by applicable
law; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital
stock or other equity Securities of any of its Subsidiaries (including such
Subsidiary), except to Company, another Subsidiary of Company, or to
qualify directors if required by applicable law.
7.14 Conduct of Business.
From and after the Closing Date, Company shall not, and shall not permit
any of its Subsidiaries to, engage in any business other than the businesses
engaged in by Company and its Subsidiaries on the Closing Date and similar or
related businesses.
7.15 Amendments or Waivers of Related Agreements; Amendments of Documents
Relating to Subordinated Indebtedness.
A. Amendments or Waivers of Related Agreements. Neither Company nor any of
its Subsidiaries will agree to any material amendment to, or waive any of its
material rights under, any Related Agreement or the Company Certificate of
Designation after the Closing Date without in each case obtaining the prior
written consent of Requisite Lenders to such amendment or waiver.
B. Amendments of Documents Relating to Subordinated Indebtedness. Company
shall not, and shall not permit any of its Subsidiaries to, amend or otherwise
change the terms of any Subordinated Indebtedness, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions thereof (or of any guaranty thereof), or change any
collateral therefor (other than to release such collateral), or if the effect of
such amendment or change, together with all other amendments or changes made, is
to increase materially the obligations of the obligor thereunder or to confer
any additional rights on the holders of such Subordinated Indebtedness (or a
trustee or other representative on their behalf) which would be adverse to
Company or Lenders.
125
7.16 Fiscal Year
Company shall not change its Fiscal Year-end from the last Friday in March.
SECTION 8.
EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default") shall
occur:
8.1 Failure to Make Payments When Due.
Failure by Company to pay any installment of principal of any Loan when
due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; failure by Company to pay any interest on any Loan or
any fee or any other amount due under this Agreement within three days after the
date due; or failure by Company to pay any amount when due under any Lender
Hedge Agreement; or
8.2 Default in Other Agreements.
(i) Failure of Company or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in an individual principal amount of $500,000 or
more or with an aggregate principal amount of $750,000 or more, in each case
beyond the end of any grace period provided therefor; or (ii) breach or default
by Company or any of its Subsidiaries with respect to any other material term of
(a) one or more items of Indebtedness or Contingent Obligations in the
individual or aggregate principal amounts referred to in clause (i) above or (b)
any loan agreement, mortgage, indenture or other agreement relating to such
item(s) of Indebtedness or Contingent Obligation(s), if the effect of such
breach or default is to cause, or to permit the holder or holders of that
Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such holder
or holders) to cause, that Indebtedness or Contingent Obligation(s) to become or
be declared due and payable prior to its stated maturity or the stated maturity
of any underlying obligation, as the case may be (upon the giving or receiving
of notice, lapse of time, both, or otherwise); or
8.3 Breach of Certain Covenants.
Failure of Company to perform or comply with any term or condition
contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 Breach of Warranty.
Any representation, warranty, certification or other statement made by
Company or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Company or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or
126
8.5 Other Defaults Under Loan Documents.
Any Loan Party shall default in the performance of or compliance with any
term contained in this Agreement or any of the other Loan Documents, other than
any such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within 30 days after the earlier
of (i) an officer of Company or such Loan Party becoming aware of such default
or (ii) receipt by Company and such Loan Party of notice from Syndication Agent,
Administrative Agent or any Lender of such default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Company or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against Company or any of its Subsidiaries under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Company or any of its Subsidiaries, or
over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of Company or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Subsidiaries, and any such event described in
this clause (ii) shall continue for 60 days unless dismissed, bonded or
discharged; or (iii) a petition is presented or meeting convened or application
made for the purpose of appointing an administrator or for the making of an
administration order in respect of any U.K. Subsidiary; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) Company or any of its Subsidiaries shall have an order for relief
entered with respect to it or commence a voluntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property (or, in the case of any U.K. Subsidiary, shall be deemed to
be unable to pay its debts as they fall due for the purpose of section 123(1) of
the Insolvency Xxx 0000 of the United Kingdom as in effect from time to time (on
the basis that the words (a) "in a sum exceeding (pounds)750" are deemed
replaced in section 123(1) by the words "in a sum exceeding $500,000" and (b)
"proved to the satisfaction of the court" are deemed omitted from section
123(1)(e)); or Company or any of its Subsidiaries shall make any assignment
for the benefit of creditors; or (ii) Company or any of its Subsidiaries shall
be unable, or shall fail generally, or shall admit in writing its inability, to
pay its debts as such debts become due; or the Board of Directors of
Company or any of its Subsidiaries (or any committee thereof) shall adopt any
resolution or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or
127
8.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $1,000,000 or (ii)
in the aggregate at any time an amount in excess of $2,500,000 (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Company or any of its Subsidiaries or any of their respective assets and shall
remain undischarged, undisputed (in the case of a writ in the United Kingdom),
unvacated, unbonded or unstayed for a period of 60 days (or in any event later
than five days prior to the date of any proposed sale thereunder); or
8.9 Dissolution.
Any order, judgment or decree shall be entered against Company or any of
its Subsidiaries decreeing the dissolution or split up of Company or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
8.10 Employee Benefit Plans.
There shall occur one or more ERISA Events or Foreign Benefit Plan Events
which individually or in the aggregate results in liability of Company, any of
its Subsidiaries or any of their respective ERISA Affiliates in excess of
$1,000,000 during the term of this Agreement; or there shall exist, as of any
valuation date for a Pension Plan, an excess of the actuarial present value
(determined on the basis of reasonable assumptions employed by the independent
actuary for such Pension Plan for funding purposes) of benefit liabilities,
whether or not vested, over the fair market value of the assets of such Pension
Plan (for a U.S. Pension Plan, the "amount of unfunded benefit liabilities" as
defined in Section 4001(a)(18) of ERISA); for a Foreign Pension Plan, the amount
of benefit liabilities for which assets have not been placed in trust or
adequate contributions made to a pension insurance scheme in respect of
employees covered by such Foreign Pension Plan), individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans with respect to which there is no such excess) which exceeds
$5,000,000; or
8.11 Material Adverse Effect.
Any event or change shall occur that has caused or evidences, either in any
case or in the aggregate a Material Adverse Effect; or
128
8.12 Change in Control.
Either (i) any Person or any two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Exchange Act), directly or
indirectly, of Securities of Company (or other Securities convertible into such
Securities) representing 35% or more of the combined voting power of all
Securities of Company entitled to vote in the election of directors, other than
Securities having such power only by reason of the happening of a contingency,
or (ii) at any point during any period of two consecutive years, individuals who
at the beginning of such period constituted Company's Board of Directors
(together with any new member of the Board of Directors whose election by
Company's Board of Directors or whose nomination for election by Company's
stockholders was approved by a vote of a majority of the directors then still in
office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors then in office; or
8.13 Invalidity of Guaranties; Failure of Security; Repudiation of Obligations.
At any time after the execution and delivery thereof, (i) any Guaranty for
any reason, other than the satisfaction in full of all Obligations, shall cease
to be in full force and effect (other than in accordance with its terms) or
shall be declared to be null and void, (ii) any Collateral Document shall cease
to be in full force and effect (other than by reason of a release of Collateral
thereunder in accordance with the terms hereof or thereof, the satisfaction in
full of the Obligations or any other termination of such Collateral Document in
accordance with the terms hereof or thereof) or shall be declared null and void,
or Administrative Agent shall not have or shall cease to have a valid and
perfected First Priority Lien in any Collateral purported to be covered thereby,
in each case for any reason other than the failure of Administrative Agent or
any Lender to take any action within its control, or (iii) any Loan Party shall
contest the validity or enforceability of any Loan Document in writing or deny
in writing that it has any further liability, including with respect to future
advances by Lenders, under any Loan Document to which it is a party; or
8.14 Failure to Consummate Acquisition.
The Acquisition shall not be consummated in accordance with this Agreement
and the applicable Related Agreements concurrently with the making of the
initial Loans, or the Acquisition shall be unwound, reversed or otherwise
rescinded in whole or in part for any reason; or
8.15 Amendment of Certain Documents of Company.
Company shall agree to any material amendment to, or waive any of its
material rights under, or otherwise change any material terms of, any of the
Acquisition Agreement or the Company Certificate of Designations, in each case
as in effect on the Closing Date, in a manner adverse to Company or any of its
Subsidiaries or to Lenders without the prior written consent of Syndication
Agent, Administrative Agent and Requisite Lenders.
129
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan, the
obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Company, declare all
or any portion of the amounts described in clauses (a) through (c) above to be,
and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; provided that the
foregoing shall not affect in any way the obligations of Lenders under
subsection 3.3C(i) or the obligations of Lenders to purchase participations in
any unpaid Swing Line Loans as provided in subsection 2.1A(iv).
Notwithstanding anything contained in the second preceding paragraph, if at
any time within 60 days after an acceleration of the Loans pursuant to clause
(ii) of such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than
non-payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended,
directly or indirectly, to benefit Company, and such provisions shall not at any
time be construed so as to grant Company the right to require Lenders to rescind
or annul any acceleration hereunder or to preclude Administrative Agent or
Lenders from exercising any of the rights or remedies available to them under
any of the Loan Documents, even if the conditions set forth in this paragraph
are met.
Notwithstanding anything herein to the contrary, upon the occurrence of an
Event of Default, Company hereby acknowledges that it shall then be indebted to,
and shall be obligated to pay to Administrative Agent, as a separate and
absolute obligation, (i) all unpaid principal amount of and accrued interest on
the Loans, (ii) an amount equal to the maximum amount that may at any time be
drawn under all Letters of Credit then outstanding, (iii) all other Obligations
and (iv) all amounts owing under or in respect of any Lender Hedge Agreement.
Administrative Agent shall distribute such proceeds among the Lenders and the
Lender Counterparties in accordance with the provisions of subsection 2.4D.
130
Upon the payment in full of all Obligations, Administrative Agent shall
exercise, or refrain from exercising, any remedies provided for in this Section
8 with respect to the Guaranties and Collateral Documents in accordance with the
instructions of the holders of a majority of the aggregate notional amount (or,
with respect to any Lender Hedge Agreement that has been terminated in
accordance with its terms, the amount then due and payable (exclusive of
expenses and similar payments but including any early termination payments then
due) under such Lender Hedge Agreement) under all Lender Hedge Agreements with
all Lenders.
SECTION 9.
AGENTS
9.1 Appointment.
A. Appointment of Agents. GSCP is hereby appointed Syndication Agent
hereunder, and each Lender hereby authorizes Syndication Agent to act as its
agent in accordance with the terms of this Agreement and the other Loan
Documents. CIBC is hereby appointed Administrative Agent hereunder and under the
other Loan Documents and each Lender hereby authorizes Administrative Agent to
act as its agent in accordance with the terms of this Agreement and the other
Loan Documents. Each Lender Counterparty hereby appoints Administrative Agent to
act as its agent under the Guaranties and Collateral Documents. Each Agent
hereby agrees to act upon the express conditions contained in this Agreement and
the other Loan Documents, as applicable. The provisions of this Section 9 are
solely for the benefit of Agents and Lenders and Company shall have no rights as
a third party beneficiary of any of the provisions thereof. In performing its
functions and duties under this Agreement, each Agent shall act solely as an
agent of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Company or any
of its Subsidiaries. Syndication Agent, without consent of or notice to any
party hereto, may assign any and all of its rights or obligations hereunder to
any of its Affiliates.
B. Appointment of Supplemental Collateral Agents. It is the purpose of this
Agreement and the other Loan Documents that there shall be no violation of any
law of any jurisdiction denying or restricting the right of banking corporations
or associations to transact business as agent or trustee in such jurisdiction.
It is recognized that in case of litigation under this Agreement or any of the
other Loan Documents, and in particular in case of the enforcement of any of the
Loan Documents, or in case Administrative Agent deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the rights,
powers or remedies granted herein or in any of the other Loan Documents or take
any other action which may be desirable or necessary in connection therewith, it
may be necessary that Administrative Agent appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent or collateral
co-agent (any such additional individual or institution being referred to herein
individually as a "Supplemental Collateral Agent" and collectively as
"Supplemental Collateral Agents").
In the event that Administrative Agent appoints a Supplemental Collateral
Agent with respect to any Collateral, (i) each and every right, power, privilege
or duty expressed or intended by this Agreement or any of the other Loan
Documents to be exercised by or vested in or conveyed to Administrative Agent
with respect to such Collateral shall be
131
exercisable by and vest in such Supplemental Collateral Agent to the extent, and
only to the extent, necessary to enable such Supplemental Collateral Agent to
exercise such rights, powers and privileges with respect to such Collateral and
to perform such duties with respect to such Collateral, and every covenant and
obligation contained in the Loan Documents and necessary to the exercise or
performance thereof by such Supplemental Collateral Agent shall run to and be
enforceable by either Administrative Agent or such Supplemental Collateral
Agent, and (ii) the provisions of this Section 9 and of subsections 10.2 and
10.3 that refer to Administrative Agent shall inure to the benefit of such
Supplemental Collateral Agent and all references therein to Administrative Agent
shall be deemed to be references to Administrative Agent and/or such
Supplemental Collateral Agent, as the context may require.
Should any instrument in writing from Company or any other Loan Party be
required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.
9.2 Powers and Duties; General Immunity.
X. Xxxxxx; Duties Specified. Each Lender irrevocably authorizes each Agent
to take such action on such Lender's behalf and to exercise such powers, rights
and remedies hereunder and under the other Loan Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified in this Agreement and the other Loan Documents. Each Agent may
exercise such powers, rights and remedies and perform such duties by or through
its agents or employees. No Agent shall have, by reason of this Agreement or any
of the other Loan Documents, a fiduciary relationship in respect of any Lender;
and nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon any Agent any
obligations in respect of this Agreement or any of the other Loan Documents
except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. No Agent shall be responsible to
any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any Agent to Lenders or by or on behalf of
Company to any Agent or any Lender in connection with the Loan Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of Company or any other Person liable for the payment of any
Obligations, nor shall any Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or as to the existence
or possible existence of any Event of Default or Potential Event of Default.
Anything contained in this Agreement to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations of
the amount of outstanding Loans or the Letter of Credit
132
Usage or the component amounts thereof.
C. Exculpatory Provisions. None of the Agents nor any of their officers,
partners, directors, respective employees or agents shall be liable to Lenders
for any action taken or omitted by any Agent under or in connection with any of
the Loan Documents except to the extent caused by such Agent's gross negligence
or willful misconduct. Each Agent shall be entitled to refrain from any act or
the taking of any action (including the failure to take an action) in connection
with this Agreement or any of the other Loan Documents or from the exercise of
any power, discretion or authority vested in it hereunder or thereunder unless
and until such Agent shall have received instructions in respect thereof from
Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6) and, upon receipt of such instructions from
Requisite Lenders (or such other Lenders, as the case may be), such Agent shall
be entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against any Agent as a result of such Agent
acting or (where so instructed) refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6).
D. Agent Entitled to Act as Lender. The agency hereby created shall in no
way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity. Any Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Company or any of its Affiliates as if
it were not performing the duties specified herein, and may accept fees and
other consideration from Company for services in connection with this Agreement
and otherwise without having to account for the same to Lenders.
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Company and its
Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter, and no Agent shall not have any responsibility
with respect to the accuracy of or the completeness of any information provided
to Lenders.
133
9.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against such
Agent in exercising its powers, rights and remedies or performing its duties
hereunder or under the other Loan Documents or otherwise in its capacity as such
Agent in any way relating to or arising out of this Agreement or the other Loan
Documents; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. If any indemnity furnished to any Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished. Upon
payment in full of the Obligations, Administrative Agent may request indemnity
from the Lender Counterparties and cease, or not commence, to do any acts under
any Guaranty or Collateral Document until such indemnity is furnished.
9.5 Successor Agent.
A. Successor Agent An Agent may resign at any time by giving 30 days' prior
written notice thereof to Lenders and Company, and Administrative Agent may be
removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to Company and Administrative Agent and signed
by Requisite Lenders. Upon any such notice of resignation or any such removal,
Requisite Lenders shall have the right, upon five Business Days' notice to
Company, to appoint a successor Administrative Agent. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Administrative Agent and the retiring or removed Administrative Agent
shall be discharged from its duties and obligations under this Agreement and
shall promptly (i) transfer to such successor Administrative Agent all sums,
securities and other items of Collateral held under any Collateral Document,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Administrative
Agent under any Collateral Document, and (ii) execute and deliver to such
successor Administrative Agent such amendments to financing statements, and take
such other actions, as may be necessary or appropriate in connection with the
assignment to such successor Administrative Agent of the security interests
created thereunder, whereupon such retiring or removed Administrative Agent
shall be discharged from its duties and obligations under the Collateral
Documents. After any retiring or removed Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
B. Successor Swing Line Lender. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of CIBC or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to subsection 9.5A shall, upon
its acceptance of such appointment,
134
become the successor Swing Line Lender for all purposes hereunder. In such event
(i) Company shall prepay any outstanding Swing Line Loans made by the retiring
or removed Administrative Agent in its capacity as Swing Line Lender, (ii) upon
such prepayment, the retiring or removed Administrative Agent and Swing Line
Lender shall surrender any Swing Line Note held by it to Company for
cancellation, and (iii) if so requested by the successor Administrative Agent
and Swing Line Lender in accordance with subsection 2.1E, Company shall issue a
new Swing Line Note to the successor Administrative Agent and Swing Line Lender
substantially in the form of Exhibit VI-B annexed hereto, in the principal
amount of the Swing Line Loan Commitment then in effect and with other
appropriate insertions.
9.6 Collateral Documents and Guaranties.
Each Lender hereby further authorizes Administrative Agent, on behalf of
and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of Lenders under the
Guaranties, and each Lender agrees to be bound by the terms of each Collateral
Document and each Guaranty; provided that Administrative Agent shall not (i)
enter into or consent to any material amendment, modification, termination or
waiver of any provision contained in any Collateral Document or Guaranty or (ii)
release any Collateral (except as otherwise expressly permitted or required
pursuant to the terms of this Agreement or the applicable Collateral Document),
in each case without the prior consent of Requisite Lenders (or such other
Lenders as may be required to give such instructions under subsection 10.6);
provided further, however, that, without further written consent or
authorization from Lenders, Administrative Agent may execute any documents or
instruments necessary to (a) release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted by this
Agreement or to which Requisite Lenders (or such other Lenders as may be
required to give such instructions under subsection 10.6) have otherwise
consented or (b) release any Subsidiary Guarantor from any Guaranty if all of
the capital stock of such Subsidiary Guarantor is sold to any Person (other than
an Affiliate of Company) pursuant to a sale or other disposition permitted
hereunder or to which Requisite Lenders (or such other Lenders as may be
required to give such instructions under subsection 10.6) have otherwise
consented. Anything contained in any of the Loan Documents to the contrary
notwithstanding, Company, Administrative Agent and each Lender hereby agree that
(X) no Lender shall have any right individually to realize upon any of the
Collateral under any Collateral Document or to enforce any Guaranty, it being
understood and agreed that all powers, rights and remedies under the Collateral
Documents and the Guaranties may be exercised solely by Administrative Agent for
the benefit of Lenders in accordance with the terms thereof, and (Y) in the
event of a foreclosure by Administrative Agent on any of the Collateral pursuant
to a public or private sale, Administrative Agent or any Lender may be the
purchaser of any or all of such Collateral at any such sale and Administrative
Agent, as agent for and representative of Lenders (but not any Lender or Lenders
in its or their respective individual capacities unless Requisite Lenders shall
otherwise agree in writing) shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by
Administrative Agent at such sale.
Each Lender hereby further authorizes Administrative Agent, on behalf of
and for the benefit of Lenders and in connection with the CIBC Letter of Credit,
to enter into that certain Subordination and Postponement Agreement dated as of
the Closing Date by and among Administrative Agent, GSCP, as a Lender, Company
and CIBC.
135
SECTION 10.
MISCELLANEOUS
10.1 Assignments and Participations in Loans and Letters of Credit.
A. General. Subject to subsection 10.1B, each Lender shall have the right
at any time to (i) sell, assign or transfer to any Eligible Assignee, or (ii)
sell participations to any Person in, all or any part of its Commitments or any
Loan or Loans made by it or its Letters of Credit or participations therein or
any other interest herein or in any other Obligations owed to it; provided that
no such sale, assignment, transfer or participation shall, without the consent
of Company, require Company to file a registration statement with the Securities
and Exchange Commission or apply to qualify such sale, assignment, transfer or
participation under the securities laws of any state; provided, further that no
such sale, assignment or transfer described in clause (i) above shall be
effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Administrative Agent and
recorded in the Register as provided in subsection 10.1B(ii); provided, further
that no such sale, assignment, transfer or participation of any Letter of Credit
or any participation therein may be made separately from a sale, assignment,
transfer or participation of a corresponding interest in the Revolving Loan
Commitment and the Revolving Loans of the Lender effecting such sale,
assignment, transfer or participation; and provided, further that, anything
contained herein to the contrary notwithstanding, the Swing Line Loan Commitment
and the Swing Line Loans of Swing Line Lender may not be sold, assigned or
transferred as described in clause (i) above to any Person other than a
successor Administrative Agent and Swing Line Lender to the extent contemplated
by subsection 9.5. Except as otherwise provided in this subsection 10.1, no
Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment or transfer of, or any
granting of participations in, all or any part of its Commitments or the Loans,
the Letters of Credit or participations therein, or the other Obligations owed
to such Lender. In the case of a sale, assignment or transfer by a Lender of all
or any part of its Commitments or any Loan or Loans made by it or its Letters of
Credit or participations therein or any other interest herein or in any other
Obligation owed to such Lender to any Person as provided in subsection 10.1A or
10.1B, such Person shall be entitled to receive no greater amount pursuant to
subsection 2.7, on a cumulative basis, than the Lender that sold, assigned or
transferred such Commitments, Loan or Loans, Letters of Credit or participations
therein, or such other interest herein or in any other such Obligations owed to
such Person.
136
B. Assignments.
137
(i) Amounts and Terms of Assignments. Each Commitment, Loan, Letter of
Credit or participation therein, or other Obligation may (a) be assigned in
any amount to another Lender, or to an Affiliate of the assigning Lender or
another Lender, with the giving of notice to Company and with the consent
of Administrative Agent (which consent shall not be unreasonably withheld
or delayed) or (b) be assigned in an aggregate amount of not less than
$5,000,000 (or such lesser amount as shall constitute the aggregate amount
of the Commitments, Loans, Letters of Credit and participations therein,
and other Obligations of the assigning Lender) to any other Eligible
Assignee with the giving of notice to Company and with the consent of
Administrative Agent (which consent shall not be unreasonably withheld or
delayed); provided, however that assignments by GSCP in accordance with
either clause (a) or (b) above may be made without the consent of
Administrative Agent, upon the giving of notice to Company and
Administrative Agent. To the extent of any such assignment in accordance
with either clause (a) or (b) above, the assigning Lender shall be relieved
of its obligations with respect to its Commitments, Loans, Letters of
Credit or participations therein, or other Obligations or the portion
thereof so assigned; provided however, that any such obligation shall be
and remain the same obligation of Company. The parties to each such
assignment shall execute and deliver to Administrative Agent, for its
acceptance and recording in the Register, an Assignment Agreement, together
with a processing and recordation fee of $1,000 in the case of assignments
pursuant to clause (a) above and assignments by GSCP or CIBC and $2,500 in
the case of all other assignments. Upon such execution, delivery,
acceptance and recordation, from and after the effective date specified in
such Assignment Agreement, (y) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment Agreement, shall have the rights
and obligations of a Lender hereunder and (z) the assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment Agreement, relinquish its
rights (other than any rights which survive the termination of this
Agreement under subsection 10.9B) and be released from its obligations
under this Agreement (and, in the case of an Assignment Agreement covering
all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto; provided that, anything contained in any of the Loan Documents to
the contrary notwithstanding, if such Lender is the Issuing Lender with
respect to any outstanding Letters of Credit such Lender shall continue to
have all rights and obligations of an Issuing Lender with respect to such
Letters of Credit until the cancellation or expiration of such Letters of
Credit and the reimbursement of any amounts drawn thereunder). The
Commitments hereunder shall be modified to reflect the Commitment of such
assignee and any remaining Commitment of such assigning Lender and, if any
such assignment occurs after the issuance of any Notes hereunder, the
assigning Lender shall, upon the effectiveness of such assignment or as
promptly thereafter as practicable, surrender its applicable Notes, if any,
to Administrative Agent for cancellation, and thereupon new Notes shall, if
so requested by the assignee and/or the assigning Lender in accordance with
subsection 2.1E, be issued to the assignee and/or to the assigning Lender,
substantially in the form of Exhibit IV, Exhibit V or Exhibit VI annexed
hereto, as the case may be, with appropriate insertions, to reflect the new
Commitments and/or outstanding Tranche A Term Loans and/or AXELs Series B,
as the case may be, of the assignee and/or the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in Register. Upon
its
138
receipt of an Assignment Agreement executed by an assigning Lender and an
assignee representing that it is an Eligible Assignee, together with the
processing and recordation fee referred to in subsection 10.1B(i) and any
forms, certificates or other evidence with respect to United States federal
income tax withholding matters that such assignee may be required to
deliver to Administrative Agent pursuant to subsection 2.7B(iii)(a),
Administrative Agent shall, if Administrative Agent has consented to the
assignment evidenced thereby to the extent such consent is required
pursuant to subsection 10.1B(i)), (a) accept such Assignment Agreement by
executing a counterpart thereof as provided therein (which acceptance shall
evidence any required consent of Administrative Agent to such assignment),
(b) record the information contained therein in the Register, and (c) give
prompt notice thereof to Company. Administrative Agent shall maintain a
copy of each Assignment Agreement delivered to and accepted by it as
provided in this subsection 10.1B(ii).
C. Participations. The holder of any participation, other than an Affiliate
of the Lender granting such participation, shall not be entitled to require such
Lender to take or omit to take any action hereunder except action directly
affecting (i) the extension of the scheduled final maturity date of any Loan
allocated to such participation or (ii) a reduction of the principal amount of
or the rate of interest payable on any Loan allocated to such participation, and
all amounts payable by Company hereunder (including amounts payable to such
Lender pursuant to subsections 2.6D, 2.7 and 3.6) shall be determined as if such
Lender had not sold such participation. Company and each Lender hereby
acknowledge and agree that, solely for purposes of subsections 10.4 and 10.5,
(a) any participation will give rise to a direct obligation of Company to the
participant and (b) the participant shall be considered to be a "Lender".
D. Assignments to Federal Reserve Banks. In addition to the assignments and
participations permitted under the foregoing provisions of this subsection 10.1,
any Lender may assign and pledge all or any portion of its Loans, the other
Obligations owed to such Lender, and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.
E. Information. Each Lender may furnish any information concerning Company
and its Subsidiaries in the possession of that Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to subsection 10.19.
F. Representations of Lenders. Each Lender listed on the signature pages
hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (A) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans; and (iii) that it will
make its Loans for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are
139
incorporated herein by this reference.
10.2 Expenses.
Whether or not the transactions contemplated hereby shall be consummated,
Company agrees to pay promptly (i) all the actual and reasonable costs and
expenses of preparation of the Loan Documents and any consents, amendments,
waivers or other modifications thereto; (ii) all the costs of furnishing all
opinions by counsel for Company (including any opinions requested by Lenders as
to any legal matters arising hereunder) and of Company's performance of and
compliance with all agreements and conditions on its part to be performed or
complied with under this Agreement and the other Loan Documents including with
respect to confirming compliance with environmental, insurance and solvency
requirements; (iii) the reasonable fees, expenses and disbursements of counsel
to Syndication Agent and counsel to Administrative Agent (including allocated
costs of internal counsel) in connection with the negotiation, preparation,
execution and administration of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and any other documents or matters
requested by Company; (iv) all the actual costs and reasonable expenses of
creating and perfecting Liens in favor of Administrative Agent on behalf of
Lenders pursuant to any Collateral Document, including filing and recording
fees, expenses and taxes, stamp or documentary taxes, search fees, title
insurance premiums, and reasonable fees, expenses and disbursements of counsel
to Syndication Agent and counsel to Administrative Agent and of counsel
providing any opinions that Syndication Agent, Administrative Agent or Requisite
Lenders may request in respect of the Collateral Documents or the Liens created
pursuant thereto; (v) all the actual costs and reasonable expenses (including
the reasonable fees, expenses and disbursements of any auditors, accountants or
appraisers and any environmental or other consultants, advisors and agents
employed or retained by Syndication Agent or Administrative Agent and their
respective counsel) of obtaining and reviewing any appraisals provided for under
subsection 4.1J or 6.9C and any environmental audits or reports provided for
under subsection 4.1L or 6.9B(viii); (vi) the custody or preservation of any of
the Collateral; (vii) all other actual and reasonable costs and expenses
incurred by Syndication Agent or Administrative Agent in connection with the
syndication of the Commitments and the negotiation, preparation and execution of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and the transactions contemplated thereby; and (viii) after the
occurrence of an Event of Default, all costs and expenses, including reasonable
attorneys' fees (including allocated costs of internal counsel) and costs of
settlement, incurred by Syndication Agent, Administrative Agent and Lenders in
enforcing any Obligations of or in collecting any payments due from any Loan
Party hereunder or under the other Loan Documents by reason of such Event of
Default (including in connection with the sale of, collection from, or other
realization upon any of the Collateral or the enforcement of any Guaranty) or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings.
140
10.3 Indemnity.
In addition to the payment of expenses pursuant to subsection 10.2, whether
or not the transactions contemplated hereby shall be consummated, Company agrees
to defend (subject to Indemnitees' selection of counsel), indemnify, pay and
hold harmless Agents and Lenders, and the officers, partners, trustees,
directors, employees, agents and affiliates of Agents and Lenders (collectively
called the "Indemnitees"), from and against any and all Indemnified Liabilities
(as hereinafter defined); provided that Company shall not have any obligation to
any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise solely from the gross negligence or
willful misconduct of that Indemnitee as determined by a final judgment of a
court of competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or xxxxx any Hazardous Materials Activity), expenses
and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other Loan Documents or the Related Agreements or the transactions
contemplated hereby or thereby (including Lenders' agreement to make the Loans
hereunder or the use or intended use of the proceeds thereof or the issuance of
Letters of Credit hereunder or the use or intended use of any thereof, or any
enforcement of any of the Loan Documents (including any sale of, collection
from, or other realization upon any of the Collateral or the enforcement of any
Guaranty), (ii) the statements contained in the commitment letter delivered by
any Lender to Company with respect thereto, or (iii) any Environmental Claim or
any Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of Company or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
141
10.4 Set-Off; Security Interest in Deposit Accounts.
In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, upon the occurrence of any Event of
Default each Lender is hereby authorized by Company at any time or from time to
time, without notice to Company or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts) and any other Indebtedness at any time held or owing
by that Lender to or for the credit or the account of Company against and on
account of the obligations and liabilities of Company to that Lender under this
Agreement, the Letters of Credit and participations therein and the other Loan
Documents, including, but not limited to, all claims of any nature or
description arising out of or connected with this Agreement, the Letters of
Credit and participations therein or any other Loan Document, irrespective of
whether or not (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 8 and although said obligations and liabilities, or
any of them, may be contingent or unmatured. Company hereby further grants to
Syndication Agent, Administrative Agent and each Lender a security interest in
all deposits and accounts maintained with Administrative Agent or such Lender as
security for the Obligations.
10.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of them shall, whether by
voluntary payment (other than a voluntary prepayment of Loans made and applied
in accordance with the terms of this Agreement), by realization upon security,
through the exercise of any right of set-off or banker's lien, by counterclaim
or cross action or by the enforcement of any right under the Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of Letters
of Credit, fees and other amounts then due and owing to that Lender hereunder or
under the other Loan Documents (collectively, the "Aggregate Amounts Due" to
such Lender) which is greater than the proportion received by any other Lender
in respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (i) notify Administrative
Agent and each other Lender of the receipt of such payment and (ii) apply a
portion of such payment to purchase participations (which it shall be deemed to
have purchased from each seller of a participation simultaneously upon the
receipt by such seller of its portion of such payment) in the Aggregate Amounts
Due to the other Lenders so that all such recoveries of Aggregate Amounts Due
shall be shared by all Lenders in proportion to the Aggregate Amounts Due to
them; provided that if all or part of such proportionately greater payment
received by such purchasing Lender is thereafter recovered from such Lender upon
the bankruptcy or reorganization of Company or otherwise, those purchases shall
be rescinded and the purchase prices paid for such participations shall be
returned to such purchasing Lender ratably to the extent of such recovery, but
without interest. Company expressly consents to the foregoing arrangement and
agrees that any holder of a participation so purchased may exercise any and all
rights of banker's lien, set-off or counterclaim with respect to any and all
monies owing by Company to that holder with respect thereto as fully as if that
holder were owed the amount of the participation held by that holder.
142
10.6 Amendments and Waivers.
A. No amendment, modification, termination or waiver of any provision of
the Loan Documents, or consent to any departure by Company therefrom, shall in
any event be effective without the written concurrence of Requisite Lenders;
provided that no such amendment, modification, termination, waiver or consent
shall, without the consent of each Lender (with Obligations directly affected in
the case of the following clause (i)): (i) extend the scheduled final maturity
of any Loan or Note, or waive, reduce or postpone any scheduled repayment set
forth in subsection 2.4A, or extend the stated expiration date of any Letter of
Credit beyond the Revolving Loan Commitment Termination Date, or reduce the rate
of interest on any Loan (other than any waiver of any increase in the interest
rate applicable to any Loan pursuant to subsection 2.2E) or any commitment fees
or letter of credit fees payable hereunder, or extend the time for payment of
any such interest or fees, or reduce the principal amount of any Loan or any
reimbursement obligation in respect of any Letter of Credit, (ii) amend, modify,
terminate or waive any provision of this subsection 10.6, (iii) reduce the
percentage specified in the definition of "Requisite Lenders" (it being
understood that, with the consent of Requisite Lenders, additional extensions of
credit pursuant to this Agreement may be included in the determination of
"Requisite Lenders" on substantially the same basis as the Tranche A Term Loan
Commitments, the Tranche A Term Loans, AXEL Series B Commitments, the AXELs
Series B, the Revolving Loan Commitments and the Revolving Loans are included on
the Closing Date), (iv) release all or substantially all of the Collateral or
all or substantially all the Subsidiaries from any Guaranty, except as expressly
provided in the Loan Documents, or (v) consent to the assignment or transfer by
Company of any of its rights and obligations under this Agreement; provided,
further that no such amendment, modification, termination or waiver shall (1)
increase the Commitments of any Lender over the amount thereof then in effect,
or extend the duration thereof, without the consent of such Lender (it being
understood that no amendment, modification or waiver of any condition precedent,
covenant, Potential Event of Default or Event of Default shall constitute an
increase or extension in the Commitment of any Lender, and that no increase in
the available portion of any Commitment of any Lender shall constitute an
increase in such Commitment of such Lender); (2) amend the definition of
"Requisite Class Lenders" without the consent of Requisite Class Lenders of each
Class, or alter the required application of any repayments or prepayments as
between Classes pursuant to subsection 2.4B(iv) without the consent of Requisite
Class Lenders of each Class which is being allocated a lesser repayment or
prepayment as a result thereof (although Requisite Lenders may waive, in whole
or in part, any mandatory prepayment so long as the application, as between
Classes, of any portion of such prepayment which is still required to be made is
not altered); (3) amend, modify, terminate or waive any obligation of Lenders
relating to the purchase of participations in Letters of Credit as provided in
subsection 3.1C without the written concurrence of Administrative Agent and of
each Issuing Lender which has a Letter of Credit then outstanding or which has
not been reimbursed for a drawing under a Letter of Credit issued it; (4) amend,
modify, terminate or waive any provision of Section 9 as the same applies to any
Agent, or any other provision of this Agreement as the same applies to the
rights or obligations of any Agent, in each case without the consent of such
Agent; or (5) amend, modify, terminate or waive any provision of subsection
2.1A(iv) or any other provision of this Agreement relating to the Swing Line
Loan Commitment or the Swing Line Loans, in each case without the consent of
Swing Line Lender.
B. Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on
143
behalf of that Lender. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on Company in any case shall entitle Company to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
subsection 10.6 shall be binding upon each Lender at the time outstanding, each
future Lender and, if signed by Company, on Company.
10.7 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Syndication Agent or
Administrative Agent shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth under such
party's name on the signature pages hereof or (i) as to Company and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent.
10.9 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made herein shall survive
the execution and delivery of this Agreement and the making of the Loans and the
issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 3.5A,
3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in subsections
9.2C, 9.4 and 10.5 shall survive the payment of the Loans, the cancellation or
expiration of the Letters of Credit and the reimbursement of any amounts drawn
thereunder, and the termination of this Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Administrative Agent or any Lender in
the exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
144
10.11 Marshalling; Payments Set Aside.
Neither Administrative Agent nor any Lender shall be under any obligation
to marshal any assets in favor of Company or any other party or against or in
payment of any or all of the Obligations. To the extent that Company makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Administrative Agent or Lenders enforce
any security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.
10.12 Severability.
In case any provision in or obligation under this Agreement or the Notes
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders' Rights.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.14 Headings.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
10.15 Applicable Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
145
10.16 Successors and Assigns.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither Company's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by Company without the prior written consent of all Lenders.
10.17 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS THEREUNDER, MAY
BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN XXX XXXXX,
XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING AND DELIVERING THIS AGREEMENT,
COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION
10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN THE
COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR
OTHERWISE.
146
10.18 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
10.19 Confidentiality.
Each Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with prudent lending
or investing practices, it being understood and agreed by Company that in any
event a Lender may make disclosures to Affiliates of such Lender or disclosures
reasonably required by any bona fide assignee, transferee or participant in
connection with the contemplated assignment or transfer by such Lender of any
Loans or any participations therein or by any direct or indirect contractual
counterparties (or the professional advisors thereto) in swap agreements
(provided that such swap counterparties and advisors are advised of and agree to
be bound by the provisions of this subsection 10.19) or disclosures required or
requested by any governmental agency or representative thereof or by the
National Association of Insurance Commissioners or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court order,
each Lender shall notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided, further that in no event shall any Lender be
obligated or required to return any materials furnished by Company or any of its
Subsidiaries.
147
10.20 Judgment Currency.
(a) If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder in any currency (the "Original
Currency" into another currency (the "Other Currency"), the parties hereto
agree, to the fullest extent permitted by law, that the rate of exchange used
shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase the Original Currency with the Other
Currency on the Business Day immediately preceding the day on which any such
judgment, or any relevant part thereof, is paid or otherwise satisfied.
(b) The obligations of Company in respect of any sum due from it to the
Lenders hereunder shall, notwithstanding any judgment in such Other Currency, be
discharged only to the extent that on the Business Day following receipt by the
Administrative Agent of any sum adjudged to be so due in the Other Currency the
Administrative Agent may in accordance with normal banking procedures purchase
the Original Currency with the Other Currency; if the Original Currency so
purchased is less than the sum originally due to the Lenders in the Original
Currency, Company agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Lenders against such loss, and if the amount of the
Original Currency so purchased exceeds the sum originally due to the Lenders in
the Original Currency, the Lenders shall remit such excess to Company.
10.21 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or supplements hereto
or in connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
10.22 Supremacy of Credit Agreement.
If and to the extent there are conflicts or inconsistencies between the
provisions of this Agreement and any of the provisions of any other Loan
Document, this Agreement shall prevail, except that (a) nothing in this clause
shall be deemed, or serve, to limit or impair the obligations of Company or
any other Loan Party with respect to the creation, attachment, perfection or
preservation of any security interest (or local law equivalent in the
relevant jurisdictions); and (b) the provisions of the Guaranties will
prevail to the extent provided for therein.
[Remainder of page intentionally left blank]
148
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
MITEL CORPORATION
By: ______________________________________________
Title: ___________________________________________
Notice Address:
Mitel Corporation
000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxx
XXXXXX X0X 0X0
Attention: Xxxxxx X. XxXxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
S-1
LENDERS:
CANADIAN IMPERIAL BANK OF COMMERCE,
individually and as Administrative Agent
By:
-----------------------------------------------
Name:
Title:
Notice Address:
Canadian Imperial Bank of Commerce
Commerce Court West, 7th Floor
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxx Xxxx
Agent Loan Underwriting and Distribution
Group
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
S-2
XXXXXXX SACHS CREDIT PARTNERS L.P.,
individually and as Syndication Agent
By:
------------------------------------------------
Authorized Signatory
Notice Address:
Xxxxxxx Xxxxx Credit Partners L.P.
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
with a copy to:
Xxxxxxx Sachs Credit Partners L.P.
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
S-3
XXXXXXX XXXXX CANADA CREDIT
PARTNERS CO.
By:
------------------------------------------------
Authorized Signatory
Notice Address:
Xxxxxxx Sachs Canada Credit Partners Co.
000 Xxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx,
Xxxxxxx, X0X 0X0
Attention: Xxxxx Xxxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
with a copy to:
Xxxxxxx Sachs Credit Partners Co.
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
S-4
