SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 30, 1997
CONSOLIDATED PAPERS, INC.
(Exact name of registrant as specified in charter)
Wisconsin 0-1051 39-0223100
(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
231 First Avenue North, Wisconsin Rapids, WI 54495-8050
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (715) 422-3111
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 30, 1997, the Registrant acquired all of the outstanding
shares of the capital stock of Repap USA, Inc. pursuant to a stock purchase
agreement (the "Agreement") between Repap Enterprises, Inc. and Consolidated
Papers, Inc. dated as of August 8, 1997. Repap USA, Inc. is a holding
corporation for Repap Wisconsin, Inc. and Repap Sales Corporation. Repap USA,
Inc., Repap Sales Corporation and Repap Wisconsin, Inc. are hereinafter referred
to as the "Acquired Companies."
The aggregate purchase price (the "Purchase Price") for the Acquired
Companies, which was determined on the basis of arm's-length negotiations,
consisted of approximately $228.8 million in cash. In addition, liabilities of
the Acquired Companies totalling approximately $433 million in net debt and $14
million in post-retirement benefits remained in place following the closing.
The Purchase Price shall be increased (or decreased) by the amount of any
changes, if any, in the Acquired Companies' working capital, long-term debt and
capital expenditures from June 30, 1997 to September 30, 1997.
The sources of the cash consideration paid at closing consisted of
borrowings by Registrant pursuant to a credit agreement among Registrant,
certain banks listed therein, and Wachovia Bank of Georgia, N.A., as agent.
Repap Wisconsin, Inc., Kimberly, Wisconsin, is a manufacturer of coated
groundwood and coated free sheet publication papers. The mill has a capacity of
508,000 tons of coated paper annually as well as an integrated groundwood pulp
mill, a 140,000 ton per year paper converting facility and a paper recycling
facility. Repap Sales Corporation markets products manufactured by Repap
Wisconsin, Inc. The Registrant intends to continue the businesses of the
Acquired Companies under the name "Inter Lake Papers, Inc."
The Registrant, based in central Wisconsin, manufactures and markets a
complete line of enamel papers, also known as coated papers. These papers are
used in many prominent magazines and in an assortment of printed materials,
including distinguished books, brochures, advertising communications and
corporate annual reports. The Registrant is also the nation's largest
manufacturer of lightweight coated specialty papers, which are used in food and
consumer product packaging and labeling. Other products manufactured by the
Registrant include paperboard products and custom-designed corrugated displays
and containers.
Prior to the acquisitions there were no material relationships between
Repap Enterprises, Inc. or the Registrant or its affiliates, directors or
officers or any associate of any director or officer of the Registrant.
The foregoing description of the Registrant's acquisition of the Acquired
Companies is qualified in its entirety by reference to the Agreements which are
filed as Exhibits to this Report.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
At the time of filing this Report, it is impracticable to provide the
required financial statements of the acquired business described in Item 2, of
this Report. The required financial statements will be filed by the Registrant,
under cover of Form 8-K/A, as soon as practicable, but not later than December
14, 1997.
(b) Pro Forma financial information.
At the time of filing this Report, it is impracticable to provide the
required pro forma financial statements. The required pro forma financial
statements will be filed by the Registrant, under cover of Form 8-K/A, as soon
as practicable, but not later than December 14, 1997.
(c) Exhibits.
Exhibit No. Description of Document
2(a) Stock Purchase Agreement dated August 8, 1997 among the
Registrant and Repap Enterprises, Inc. (together with a list
briefly identifying the contents of all omitted schedules
thereto). The Registrant agrees to provide copies of such
schedules to the Commission upon request.
4(a) $750,000,000 Credit Agreement among the Registrant and Wachovia
Bank of Georgia, N.A. (together with a list briefly identifying
the contents of all omitted exhibits and Schedules thereto).
The Registrant agrees to provide copies of such exhibits and
schedules to the Commission upon request.
The Registrant has additional long-term debt that does not
exceed 10 percent of its total assets. The Registrant agrees
to provide copies of agreements covering such indebtedness to
the Commission upon request.
99(a) Press Release dated September 30, 1997 covering the
transactions described in this Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONSOLIDATED PAPERS, INC.
Date: October 15, 1997 By: /s/ Richard J. Kenney
-------------------------------------------
Richard J. Kenney
Its: Senior Vice President, Finance
INDEX TO EXHIBITS
Exhibit No. Description of Document
2(a) Stock Purchase Agreement dated August 8, 1997 among the Registrant
and Repap Enterprises, Inc. (together with a list briefly
identifying the contents of all omitted schedules thereto). The
Registrant agrees to provide copies of such schedules to the
Commission upon request.
4(a) $750,000,000 Credit Agreement among the Registrant and Wachovia Bank
of Georgia, N.A. (together with a list briefly identifying the
contents of all omitted exhibits and Schedules thereto). The
Registrant agrees to provide copies of such exhibits and schedules
to the Commission upon request.
The Registrant has additional long-term debt that does not exceed 10
percent of its total assets. The Registrant agrees to provide
copies of agreements covering such indebtedness to the Commission
upon request.
99(a) Press Release dated September 30, 1997 covering the transactions
described in this Form 8-K.
STOCK PURCHASE AGREEMENT
between
REPAP ENTERPRISES INC.
and
CONSOLIDATED PAPERS, INC.
Dated as of August 8, 1997
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Specific Definitions . . . . . . . . . . . . . . . . . . . . .
Section 1.2 Other Terms . . . . . . . . . . . . . . . . . . . . . . . . .
Section 1.3 Other Definitional Provisions . . . . . . . . . . . . . . . .
ARTICLE II
PURCHASE AND SALE OF SHARES
Section 2.1 Purchase and Sale of Shares . . . . . . . . . . . . . . . . .
Section 2.2 Closing; Delivery and Payment . . . . . . . . . . . . . . . .
Section 2.3 Adjustment to Purchase Price . . . . . . . . . . . . . . . . .
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF REPAP
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
ARTICLE V
TAX MATTERS
Section 5.1 Tax Sharing . . . . . . . . . . . . . . . . . . . . . . . . .
Section 5.2 Tax Indemnification . . . . . . . . . . . . . . . . . . . . .
Section 5.3 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . .
Section 5.4 Contest Provisions . . . . . . . . . . . . . . . . . . . . . .
Section 5.5 Information to Be Provided by Buyer . . . . . . . . . . . . .
Section 5.6 Information to Be Provided by Repap . . . . . . . . . . . . .
Section 5.7 Assistance and Cooperation . . . . . . . . . . . . . . . . . .
Section 5.8 Post-Closing Actions Which May Affect
Repap's Liability for Taxes . . . . . . . . . . . . . . . .
Section 5.9 Savings and Costs to Buyer Resulting from Adjustments to Tax
Returns for Periods Prior to Closing . . . . . . . . . . . . .
Section 5.10 Survival of Obligations . . . . . . . . . . . . . . . . . . . .
ARTICLE VI
CERTAIN COVENANTS AND AGREEMENTS
OF REPAP AND BUYER
Section 6.1 Access and Information . . . . . . . . . . . . . . . . . . . .
Section 6.2 Registrations, Filings and Consents . . . . . . . . . . . . .
Section 6.3 Operation of Business . . . . . . . . . . . . . . . . . . . .
Section 6.4 Continued Employment; Employee Benefit Plans . . . . . . . . .
Section 6.5 Retention of Books and Records . . . . . . . . . . . . . . . .
Section 6.6 Closing Date Financial Information . . . . . . . . . . . . . .
Section 6.7 Notification of Certain Matters . . . . . . . . . . . . . . .
Section 6.8 Non-Solicitation of Employees . . . . . . . . . . . . . . . .
Section 6.9 Further Assurances . . . . . . . . . . . . . . . . . . . . . .
Section 6.10 Stockholders Meeting . . . . . . . . . . . . . . . . . . . . .
Section 6.11 Certain Interests After Closing Date . . . . . . . . . . . . .
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . .
Section 7.2 Conditions to Obligations of Repap . . . . . . . . . . . . . .
Section 7.3 Conditions to Obligations of Buyer and Repap . . . . . . . . .
ARTICLE VIII
TERMINATION
Section 8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . .
Section 8.2 Effect of Termination . . . . . . . . . . . . . . . . . . . .
ARTICLE IX
SURVIVAL AND INDEMNIFICATION
Section 9.1 Survival of Representations, Warranties, Covenants and
Agreements; Knowledge of Breach . . . . . . . . . . . . . . .
Section 9.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . .
Section 9.3 Method of Asserting Claims, etc. . . . . . . . . . . . . . . .
ARTICLE X
MISCELLANEOUS
Section 10.1 Amendment and Modification; Waiver . . . . . . . . . . . . . .
Section 10.2 Return of Information . . . . . . . . . . . . . . . . . . . .
Section 10.3 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 10.4 Public Disclosure . . . . . . . . . . . . . . . . . . . . . .
Section 10.5 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 10.6 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . .
Section 10.7 Fulfillment of Obligations . . . . . . . . . . . . . . . . . .
Section 10.8 Parties in Interest; No Third Party Beneficiaries . . . . . .
Section 10.9 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 10.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . .
Section 10.11 Section Headings . . . . . . . . . . . . . . . . . . . . . . .
Section 10.12 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 10.13 GOVERNING LAW; SUBMISSION TO
JURISDICTION; SELECTION OF FORUM . . . . . . . . . . . . . . .
Section 10.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . .
ANNEXES
Representations of Repap Annex A . . . . . . . . . . . . . . .
Representations of Buyer Annex B . . . . . . . . . . . . . . .
Schedules
STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of August 8,
1997, between REPAP ENTERPRISES INC., a corporation incorporated under the
laws of Canada ("Repap"), and CONSOLIDATED PAPERS, INC., a Wisconsin
corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Repap owns all of the issued and outstanding shares of
capital stock of Repap USA, Inc., a Wisconsin corporation ("Repap USA");
WHEREAS, Repap, George S. Petty Management Ltd. ("GSP"), Skeena
Cellulose, Inc. ("Skeena") and Repap USA own all of the issued and
outstanding capital stock of Repap Wisconsin, Inc., a Wisconsin corporation
("Repap Wisconsin");
WHEREAS, Repap USA owns all of the issued and outstanding capital
stock of Repap Sales Corp., a New York corporation ("Repap Sales");
WHEREAS, Repap desires to sell and transfer to Buyer, and Buyer
desires to purchase from Repap, all of the issued and outstanding capital
stock of Repap USA (consisting of 1,395 shares of common stock, without par
value (the "Common Shares")), as more specifically provided herein;
WHEREAS, Repap will acquire from GSP, Skeena and Repap Sales prior
to Closing, all of the issued and outstanding shares of preferred stock of
all classes of Repap Wisconsin, consisting of 5,758.2 shares of Class I, no
par value, 103.65 shares of Class II, no par value, 539.94 shares of Class
III, no par value, and 483.25 shares of Class IV, no par value (collectively,
the "Repap Wisconsin Preferred Shares" and together with the Common Shares,
the "Shares"); and
WHEREAS, Repap desires to sell and transfer to Buyer, and Buyer
desires to purchase from Repap, all of the Repap Wisconsin Preferred Shares,
as more specifically described herein;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section A. Specific Definitions. As used in this Agreement, the
following terms shall have the meanings set forth or as referenced below:
"Acquisition Agreement" shall have the meaning set forth in
Section 8.2(d).
"Acquisition Proposal" shall have the meaning set forth in Section
6.3(k).
"Acquisition Transaction" shall have the meaning set forth in
Section 8.2(d).
"Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by or under common control
with that Person.
"Agreement" shall mean this Agreement and all Annexes and Schedules
hereto.
"Antitrust Division" shall mean the Antitrust Division of the
United States Department of Justice.
"Balance Sheet" shall have the meaning set forth in Section 3.6 of
Annex A.
"Business" shall mean the manufacture, distribution and sale of
coated paper by Repap USA or any of its Subsidiaries from facilities located
in Kimberly, Wisconsin and regional US sales offices and distribution
centers.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banks in New York City, New York are authorized or
obligated by law or executive order to close.
"Buyer" shall have the meaning set forth in the Preamble.
"Capital Expenditures" shall have the meaning set forth in Section
2.3(a).
"Claim Notice" shall have the meaning set forth in Section 9.3.
"Closing" shall have the meaning set forth in Section 2.2(a).
"Closing Date" shall have the meaning set forth in Section 2.2(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Shares" shall have the meaning set forth in the Preamble.
"Competition Act" shall mean the Competition Act (Canada).
"Competition Director" shall mean the Director of Investigation and
Research under the Competition Act.
"Confidential Information" shall have the meaning set forth in
Section 6.1(d).
"Confidentiality Agreement" shall have the meaning set forth in
Section 6.1(c).
"Continuing Affiliate" shall mean an Affiliate of Repap other than
Repap USA and the Subsidiaries.
"Control" of a Person shall mean the power, direct or indirect, to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise; the terms "controlling" and "controlled"
shall have meanings correlative to the foregoing.
"Damage Threshold" shall have the meaning set forth in Section
9.1(a).
"Debt" shall have the meaning set forth in Section 2.3(a).
"Deductible" shall have the meaning set forth in Section 9.1.
"Disclosure Documents" shall have the meaning set forth in Section
3.6 of Annex A.
"Employees" means all employees of Repap USA and the Subsidiaries
who were employed on the Closing Date.
"Encumbrances" shall have the meaning set forth in Section 3.2 of
Annex A.
"Environmental Law" means any law, regulation, code, license,
permit, order, judgment, decree or injunction relating to the protection of
the environment (including air, water, soil and natural resources) or the
use, storage, handling, release or disposal of any hazardous or toxic
substance as in effect on the date hereof.
"ERISA" shall have the meaning set forth in Section 3.12 of Annex
A.
"ERISA Affiliate" shall have the meaning set forth in Section 3.12
of Annex A.
"ERISA Affiliate Plan" shall have the meaning set forth in Section
3.12 of Annex A.
"ERISA Plan" shall have the meaning set forth in Section 3.12 of
Annex A.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Financial Information" shall have the meaning set forth in Section
3.6 of Annex A.
"Financial Statements" shall have the meaning set forth in Section
3.6 of Annex A.
"FTC" shall mean the Federal Trade Commission.
"GAAP" shall mean U.S. generally accepted accounting principles
consistently applied.
"GSP" shall have the meaning set forth in the Preamble.
"Hazardous Substance" means any substance listed, defined,
designated or classified as hazardous, toxic or radioactive under any
applicable Environmental Law, including petroleum and any derivative or by-
products thereof.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Indemnified Party" shall have the meaning set forth in Section
9.2.
"Indemnifying Party" shall have the meaning set forth in Section
9.2.
"Intellectual Property" shall have the meaning set forth in Section
3.31 of Annex A.
"Interim Financial Information" shall have the meaning set forth in
Section 3.6 of Annex A.
"IRS" shall mean the United States Internal Revenue Service.
"Knowledge of Repap" shall mean the knowledge of each of Repap,
Repap USA and Repap Wisconsin.
"Liabilities" shall have the meaning set forth in Section 3.7 of
Annex A.
"Listed Employees" shall have the meaning set forth in Section
6.4(c).
"Losses" shall have the meaning set forth in Section 9.2(a).
"Material Adverse Effect" shall mean a material adverse effect on
the Business, assets, financial condition or results of operations of Repap
USA and the Subsidiaries, taken as a whole.
"Maximum Amount" shall have the meaning set forth in Section 9.1.
"Multiemployer Plan" shall have the meaning set forth in Section
3.12 of Annex A.
"Notice Period" shall have the meaning set forth in Section 9.3.
"Offer" shall have the meaning set forth in Section 8.2(d).
"Permitted Encumbrances" shall mean any mechanics', workmen's,
repairmen's, warehousemen's, carriers' or other like liens and encumbrances
(i) arising in the ordinary and usual course of business consistent with past
practice or being contested in good faith by appropriate proceedings, (ii)
not in excess of $100,000 in the aggregate, (iii) necessarily incurred in
connection with a repair or capital expense to continue operations or (iv) as
contemplated by this Agreement.
"Person" shall mean any individual, corporation, partnership,
limited liability company, firm, joint venture, association, joint-stock
company, trust, unincorporated organization, governmental or regulatory body
or other entity.
"Plan" shall have the meaning set forth in Section 3.12 of Annex A.
"Pre-Closing Tax Period" shall have the meaning set forth in
Section 5.2(b).
"Purchase Price" shall have the meaning set forth in Section 2.1.
"Repap" shall have the meaning set forth in the Preamble.
"Repap Group" shall mean any "affiliated group" (as defined in
Section 1504(a) of the Code without regard to the limitations contained in
Section 1504(b) of the Code) that includes Repap USA and its Subsidiaries.
"Repap Sales" shall have the meaning set forth in the Preamble.
"Repap Wisconsin" shall have the meaning set forth in the Preamble.
"Repap Wisconsin Preferred Shares" shall have the meaning set forth
in the Preamble.
"Repap USA" shall have the meaning set forth in the Preamble.
"Report" shall have the meaning set forth in Section 6.2(a).
"Requisite Vote" shall mean the affirmative vote in favor of the
transactions contemplated by this Agreement by the requisite number of votes
cast by Repap shareholders entitled to vote thereon at a meeting, including
any adjournments thereof, convened pursuant to Section 6.10 of this
Agreement.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Severance Plans" shall have the meaning set forth in Section 6.4.
"Shares" shall have the meaning set forth in the Preamble.
"Skeena" shall have the meaning set forth in the Preamble.
"Standby Loan Agreement" shall mean the standby loan agreement made
as of August 1, 1996 by and among Repap Enterprises Inc., as borrower, TD
Capital Group Limited, The Toronto-Dominion Bank and The Royal Bank of
Canada, as lenders, and TD Capital Group Limited, as agent, as amended,
supplemented or restated from time to time.
"Statement of Capital Expenditures" shall have the meaning set
forth in Section 2.3(c).
"Statement of Consolidated Net Working Capital" shall have the
meaning set forth in Section 2.3(c).
"Statement of Debt" shall have the meaning set forth in Section
2.3(c).
"Subsidiar[y][ies]" shall have the meaning set forth in Section 3.3
of Annex A.
"Tax Package" shall have the meaning set forth in Section 5.5.
"Tax Returns" shall mean all federal, state, local or foreign tax
returns, tax reports, and declarations of estimated tax, including without
limitation consolidated federal income tax returns of Repap Group.
"Taxes" shall mean all federal, state, local or foreign income,
gross receipts, windfall or excess profits, severance, property, production,
sales, use, license, excise, franchise, employment, withholding or similar
taxes, together with any interest, additions or penalties with respect
thereto and any interest in respect of such additions or penalties.
"Third Party Claim Notice" shall have the meaning set forth in
Section 9.3.
"Working Capital" shall have the meaning set forth in Section 2.3.
"WWF" shall mean WWF Paper Corporation.
Section B. Other Terms. Other terms may be defined elsewhere in
the text of this Agreement and, unless otherwise indicated, shall have such
meaning indicated throughout this Agreement.
Section C. Other Definitional Provisions. 1. The words "hereof",
"herein", and "hereunder" and words of similar import, when used in this
Agreement, shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.
2. The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
3. The terms "dollars" and "$" shall mean United States Dollars.
ARTICLE II.
PURCHASE AND SALE OF SHARES
Section A. Purchase and Sale of Shares. Buyer agrees to purchase
from Repap, and Repap agrees to sell to Buyer, the Shares, for an aggregate
purchase price in cash of $227.4 million (the "Purchase Price"). The
Purchase Price shall be adjusted as set forth in Section 2.3.
Section B. Closing; Delivery and Payment. 1. The closing (the
"Closing") shall take place at the offices of Sullivan & Cromwell, 125 Broad
Street, New York, New York 10004 at 10:00 A.M. local time, five business days
following the latest to occur of: (i) obtaining shareholder approval of the
transactions contemplated by this Agreement pursuant to Section 6.10, (ii)
the expiration of the waiting period under the HSR Act including any
extensions thereof, and (iii) the Competition Act Director or any person
authorized to exercise the powers and perform the duties of the Competition
Act Director shall have issued a certificate under Section 102(l) of the
Competition Act to the effect that she is satisfied that she would not have
sufficient grounds on which to apply to the Competition Tribunal established
pursuant to the Competition Act under Section 92 of the Competition Act in
respect of the transactions contemplated by this Agreement or the appropriate
time period specified in Section 123 of the Competition Act shall have
expired or the Competition Act Director shall have indicated in writing that
she does not intend to take any action under Section 92 of the Competition
Act whether before or after the completion of the transactions contemplated
by this Agreement, which could materially interfere with or detrimentally
affect the transactions contemplated by this Agreement, or at such other time
and place as the parties hereto may mutually agree. The date on which the
Closing occurs is called the "Closing Date."
2. On the Closing Date, Repap shall deliver to Buyer certificates
representing the Shares duly endorsed and in form for transfer to Buyer.
3. On the Closing Date, Buyer shall pay or deliver to Repap the
Purchase Price in immediately available funds to an account designated by
Repap not less than two Business Days prior to the Closing.
Section C. Adjustment to Purchase Price. 1. The Purchase Price
shall be:
a. increased by the amount, if any, by which $4.9 million
exceeds the amount of any final settlement paid by Repap Wisconsin
prior to the Closing Date to fully discharge its obligations to
Wisconsin Electric Power Company as described in Note 11 to the
Consolidated Financial Statements of Repap Wisconsin in the Annual
Report on Form 10-K for the fiscal year ended December 31, 1996, of
Repap Wisconsin, which is attached as part of Schedule 3.6 to this
Agreement;
b. increased by the amount the Working Capital as of the
Closing Date exceeds $70.4 million, or decreased by the amount the
Working Capital as of the Closing Date is less than $70.4 million,
as the case may be;
c. (A) if the outstanding long-term indebtedness plus the
amount of the liability under FASB 106 of Repap USA and its
Subsidiaries as of the Closing Date and calculated as set forth on
Schedule 2.3(a)(iii) (collectively, the "Debt") is less than $454.6
million, increased by an amount equal to the difference between
$454.6 million and the Debt, or (B) if the Debt is greater than
$454.6 million, decreased by an amount equal to the difference
between the Debt and $454.6 million; and
d. increased by the amount of (A) capital expenditures
incurred and paid or accrued by Repap USA and the Subsidiaries from
March 31, 1997 through the Closing Date and set forth on Schedule
2.3(a)(iv), (B) capital expenditures incurred and paid or accrued
by Repap USA and the Subsidiaries through the Closing Date pursuant
to Section 6.3(g) hereof and (C) capital expenditures incurred and
paid by Repap USA and the Subsidiaries through the Closing Date
other than as provided in subclause (iv)(A) or (iv)(B) and agreed
to by Buyer in writing (such agreement not to be unreasonably
withheld) (collectively, the "Capital Expenditures").
2. As used in this Agreement, "Working Capital" means current
assets less current liabilities as reflected on the Statement of Consolidated
Net Working Capital plus the amount, if any, paid to the Listed Employees
prior to the Closing Date pursuant to Section 6.4(c). For purposes of such
calculation, current assets shall be the sum of cash, marketable securities,
net accounts receivable (including any affiliate accounts receivable),
prepaid expenses and net inventories of Repap USA and the Subsidiaries.
Current liabilities shall be the sum of obligations (including any affiliate
accounts payable), debts, prepayments and accruals whose liquidation is
reasonably expected to require the use of current assets or the creation of
current liabilities (including any affiliate accounts payable) of Repap USA
and the Subsidiaries but shall not include accruals from January 1, 1997
through the Closing Date for Repap Wisconsin s supplemental pension plan to
the extent that Repap fully funds such supplemental pension plan on or prior
to Closing. All of the foregoing calculations shall be made in conformity
with GAAP.
3. For purposes of this Agreement, "Statement of Consolidated Net
Working Capital" means the audited calculation of the Working Capital of
Repap USA and the Subsidiaries, on a consolidated basis, as of the Closing
Date from which the calculation of the adjustment to the Purchase Price of
the Shares will be made in accordance with Section 2.3(a)(i) hereof.
4. Within sixty (60) days following the Closing Date, Repap shall
prepare and deliver to Buyer (i) the Statement of Consolidated Net Working
Capital, which shall be audited by Repap's auditors, including a review and
assessment of accounts receivable as of the Closing Date, an inventory of
work in process, pulp and raw materials, and finished goods taken by Repap as
of the Closing Date and a review of the liabilities as of the Closing Date,
each determined in accordance with GAAP and performed in accordance with
procedures of Repap's auditors in the ordinary and usual course of business
consistent with past practice, (ii) a calculation of the amount of Debt
outstanding as of the Closing Date (the "Statement of Debt") and (iii) a
calculation of the amount of Capital Expenditures from March 31, 1997 through
the Closing Date (the "Statement of Capital Expenditures").
During the preparation of the Statement of Consolidated Net Working
Capital, the Statement of Debt and the Statement of Capital Expenditures and
the period of any review or dispute as provided in this Section 2.3, Buyer
shall, and shall cause Repap USA and the Subsidiaries to, (1) provide Repap
and Repap's authorized representatives with full access to the books,
records, facilities and employees of Repap USA and the Subsidiaries, and (2)
cooperate fully with Repap and Repap's authorized representatives, including
the provision on a timely basis of all necessary or useful information. The
taking of inventory may be observed by Buyer and Buyer's auditors. To the
extent possible, Repap will provide Buyer with a preliminary draft of the
Statement of Consolidated Net Working Capital, the Statement of Debt and the
Statement of Capital Expenditures. Buyer and Repap will in good faith
attempt to resolve any disputes with respect to such calculation before the
final Statement of Consolidated Net Working Capital, Statement of Debt and
Statement of Capital Expenditures are rendered.
Buyer may review the Statement of Consolidated Net Working Capital,
Statement of Debt and Statement of Capital Expenditures and Repap shall make
available the work papers of Repap's auditors to Buyer and its accountants
and Buyer and its accountants may make inquiries of representatives of Repap
and its auditors. Buyer shall give written notice to Repap of any objection
to the Statement of Consolidated Net Working Capital, Statement of Debt and
Statement of Capital Expenditures within thirty (30) days after Buyer's
receipt thereof. The notice shall specify in reasonable detail the items in
the Statement of Consolidated Net Working Capital, Statement of Debt and
Statement of Capital Expenditures to which Buyer objects and shall provide a
summary of Buyer's reasons for such objections.
Any dispute between Buyer and Repap with respect to the Statement
of Consolidated Net Working Capital, Statement of Debt and Statement of
Capital Expenditures which is not resolved within fifteen (15) Business Days
after receipt by Repap of the written notice from Buyer shall be referred for
decision to an independent accounting firm chosen from the "Big Six"
accounting firms who shall cause an audit partner who is not engaged in
providing services to Repap or Buyer or any of their affiliates to decide the
dispute within thirty (30) days of such referral. The decision by the audit
partner shall be final and binding on Repap and Buyer. The cost of retaining
the audit partner with respect to resolving disputes as to the Statement of
Consolidated Net Working Capital, Statement of Debt and Statement of Capital
Expenditures shall be borne by Repap and Buyer equally.
5. Following delivery of the Statement of Consolidated Net Working
Capital, Statement of Debt and Statement of Capital Expenditures, any balance
due to Repap or refund due to Buyer pursuant to the adjustments set forth in
Section 2.3(a) shall be paid within ten (10) days of such delivery (unless
there is an objection under Section 2.3(d), in which case the amount not in
dispute shall be paid within ten (10) days of such delivery, and the balance
in dispute shall be paid within ten (10) days of the resolution of such
objection) together with interest on such amount from the Closing Date at the
90 day LIBOR rate, in immediately available funds to an account designated by
Repap or Buyer, as the case may be, at least two Business Days before the
payment is due.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF REPAP
Repap represents and warrants to Buyer as of the date hereof and as
of the Closing Date (except that representations and warranties that are made
as of a specific date need be true only as of such date) as provided in
Annex A hereto.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Repap as of the date hereof and as
of the Closing Date (except that representations and warranties that are made
as of a specific date need be true only as of such date) as provided in
Annex B hereto.
ARTICLE V.
TAX MATTERS
Section A. Tax Sharing. Any and all tax sharing agreements and
arrangements shall be canceled as between Repap and the Continuing
Affiliates, on the one hand, and Repap USA and its Subsidiaries, on the other
hand, and no further payments shall be made by Repap USA or any of its
Subsidiaries to Repap or its Continuing Affiliates, or by Repap or its
Continuing Affiliates to Repap USA or its Subsidiaries, pursuant thereto.
Section B. Tax Indemnification. 1. Buyer and Repap agree that no
election shall be made under Section 338(h)(10) of the Code or under any
similar provisions of state or foreign law with respect to the purchase of
the Shares.
2. Repap hereby agrees to indemnify Buyer and hold it harmless
from (i) all liability for Taxes imposed on Repap USA and its Subsidiaries
for any taxable year or period ending on or before the Closing Date and, in
the case of any taxable year or period beginning before and ending after the
Closing Date, the portion of such period ending on and including the Closing
Date (the "Pre-Closing Tax Period"), and (ii) all liability for Taxes imposed
on the Repap Group, other than Repap USA and its Subsidiaries, except to the
extent that, with respect to either clause (i) or (ii), such Taxes are taken
into account as a liability on the Balance Sheet. Repap shall be entitled to
all refunds of such Taxes, except to the extent such Taxes are taken into
account on the Balance Sheet.
3. Buyer hereby agrees to indemnify Repap and its Continuing
Affiliates and hold them harmless from all liability for Taxes imposed on
Repap USA and its Subsidiaries for any taxable year or period beginning after
the Closing Date and, in the case of any taxable year or period beginning
before and ending after the Closing Date, the portion of such period
beginning after the Closing Date.
4. Whenever it is necessary to determine liability for Taxes for a
portion of a taxable year or period beginning before and ending after the
Closing Date, the determination shall be made assuming that there was a
closing of the books at the close of the Closing Date, except that Taxes
(other than Taxes measured by net income or gains), exemptions, allowances or
deductions that are calculated on an annual basis shall be apportioned on a
time basis.
Section C. Tax Returns. 1. Repap shall, based upon the Tax
Package, prepare all Tax Returns that are required to be filed by or with
respect to Repap USA and its Subsidiaries for taxable years or periods ending
on or before the Closing Date which have not been filed on or before the
Closing Date. Drafts of such Tax Returns in a form suitable for filing shall
be submitted to Buyer for review and approval not less than thirty (30) days
prior to their due date (including any extensions thereof). Buyer shall
notify Repap of any changes that it proposes to make to such draft Tax
Returns not less than twenty (20) days before filing and shall discuss such
changes with Repap prior to filing the Tax Returns. Final decisions as to
the form and content of such Tax Returns shall be with Buyer, subject to the
consent of Repap which consent shall not be unreasonably withheld; provided,
however, that the usable net operating loss carryovers from periods ending on
or before September 30, 1996 reported on such Tax Returns will be subject to
the mutual agreement of Buyer and Repap. Buyer shall file or cause to be
filed when due all such Tax Returns. Repap shall pay Buyer the Taxes for
which Repap is liable pursuant to Section 5.2(b) but which are payable with
Tax Returns to be filed by Buyer pursuant to the previous sentence within 10
days prior to the due date for the filing of such Tax Returns.
2. Buyer shall file or cause to be filed when due all Tax Returns
that are required to be filed by or with respect to Repap USA and its
Subsidiaries for taxable years or periods ending after the Closing Date and
shall remit any Taxes due in respect of such Tax Returns. Repap shall pay
Buyer the Taxes for which Repap is liable pursuant to Section 5.2(b) but
which are payable with Tax Returns to be filed by Buyer pursuant to the
previous sentence within 10 days prior to the due date for the filing of such
Tax Returns.
3. In the event that the U.S. federal income tax return filed by
Buyer on behalf of Repap USA and Subsidiaries for the taxable period ending
on the Closing Date reports usable net operating loss carryovers (excluding
any net operating loss carryovers attributable to Nitec Paper Corporation)
from periods ending on or before September 30, 1996, of less than
$114.1 million (without regard to whether such net operating loss carryovers
are used in such Tax Returns or any subsequent Tax Returns) or in the event
that such amount is reduced upon audit by the IRS, Repap shall pay to Buyer
an amount equal to twenty-nine percent (29%) of the difference between
$114.1 million and the amount of such usable net operating loss carryovers
(excluding any net operating loss carryovers attributable to Nitec Paper
Corporation) reported on such return.
4. In the event that the U.S. federal income tax return filed by
Buyer on behalf of Repap USA and the Subsidiaries for the taxable period
ending on the Closing Date reports usable net operating loss carryovers
(excluding any net operating loss carryovers attributable to Nitec Paper
Corporation) from periods ending on or before September 30, 1996, of greater
than $114.1 million (without regard to whether such net operating loss
carryovers are used in such Tax Returns or any subsequent Tax Returns) or in
the event that such amount is increased upon audit by the IRS, Buyer shall
pay to Repap an amount equal to twenty-nine percent (29%) of the difference
between the amount of such usable net operating loss carryovers (excluding
any net operating loss carryovers attributable to Nitec Paper Corporation)
reported on such return and $114.1 million.
Section D. Contest Provisions. Buyer shall promptly notify Repap
in writing upon receipt by Buyer or any of its Affiliates (including Repap
USA or any of its Affiliates) of notice of any pending or threatened federal,
state, local or foreign income or franchise tax examinations, inquiries or
audits or assessments which may materially affect the tax liabilities of
Repap USA or its Subsidiaries for which Repap may be required to indemnify
Buyer pursuant to Sections 5.2(b) or 5.9(c) (provided that failure to give
this notice shall not affect Buyer's right to indemnification hereunder
unless such failure is prejudicial to Repap), or which may affect any tax
liability or refund claim of Repap. Repap shall be entitled to participate
at its expense in the defense of any claims for Taxes or any other proposed
adjustments which may be the subject of indemnification by Repap pursuant to
Section 5.2(b) or 5.9(c), and, with the written consent of Buyer, at its sole
expense, may assume the entire defense of such claims or proposed
adjustments. Notwithstanding the foregoing, Repap shall not be entitled to
settle, either administratively or after the commencement of litigation, any
claim for Taxes which would adversely affect the liability for Taxes of the
Buyer, Repap USA or its Subsidiaries for any period after the Closing Date to
any extent (including, but not limited to, the imposition of income tax
deficiencies, the reduction of asset basis or cost adjustments, the
lengthening of any amortization or depreciation periods, the denial of
amortization or depreciation deductions, or the reduction of loss or credit
carry forwards) without the prior written consent of Buyer. Such consent
shall not be unreasonably withheld.
Neither Buyer, Repap USA nor its Subsidiaries may agree to settle
any claim for Taxes or other proposed adjustments which may be the subject of
indemnification by Repap under Sections 5.2(b) or 5.9(c) without the prior
written consent of Repap, which consent shall not be unreasonably withheld.
Section E. Information to Be Provided by Buyer. With respect to
the taxable year of Repap USA within which the Closing Date occurs, Buyer
shall promptly cause Repap USA to prepare and provide to Repap a package of
tax information materials (the "Tax Package"), which shall be completed in
accordance with past practice including past practice as to providing the
information, schedules and work papers and as to the method of computation of
separate taxable income or other relevant measure of income of Repap USA.
Buyer shall cause the Tax Package for the portion of the taxable period
ending on the Closing Date to be delivered to Repap within one hundred twenty
(120) days after the Closing Date.
Section F. Information to Be Provided by Repap. At the Closing,
Repap shall provide to Buyer copies of all Tax Returns filed by or on behalf
of Repap USA and the Subsidiaries that are relevant for purposes of
establishing the amount of the net operating loss and credit carryovers of
Repap USA and the Subsidiaries for federal and Wisconsin income tax purposes
as of the Closing Date. In addition, at Closing, Repap shall provide to
Buyer copies of all workpapers used in the preparation of such Tax Returns.
Section G. Assistance and Cooperation. After the Closing Date,
each of Repap and Buyer shall:
a. assist (and cause their respective affiliates to assist)
the other party in preparing any Tax Returns or reports which such
other party is responsible for preparing and filing in accordance
with this Article V;
b. cooperate fully in preparing for any examinations,
inquiries or audits of, or disputes with taxing authorities
regarding, any Tax Returns of Repap USA or its Subsidiaries or any
tax refund claims filed by Repap;
c. make available to the other and to any taxing authority as
reasonably requested all information, records and documents
relating to Taxes of Repap, Repap USA or its Subsidiaries;
d. provide timely notice to the other in writing of any
pending or threatened tax examinations, inquiries or audits or
assessments of Repap USA or its Subsidiaries for taxable periods
for which the other may have a liability under this Article V; and
e. furnish the other with copies of all correspondence
received from any taxing authority in connection with any tax
examination, inquiry or audit or information request with respect
to any such taxable period referred to in subsection (iv).
Section H. Post-Closing Actions Which May Affect Repap's Liability
for Taxes. Except to the extent required by law, neither Buyer, Repap USA,
its Subsidiaries, nor their Affiliates shall, without the prior written
consent of Repap, which shall not be unreasonably withheld, (i) amend any Tax
Return filed by, or with respect to, Repap USA or any of its Subsidiaries for
any taxable period, or portion thereof, beginning before the Closing Date, or
(ii) carryback any net operating loss, capital loss, excess foreign tax
credit or other similar losses, deductions or credits derived with respect to
any period beginning after the Closing Date to any taxable year, or portion
thereof, of Repap USA or any of its Subsidiaries ending on or before the
Closing Date. Such consent shall not be unreasonably withheld and shall not
be necessary to the extent that such amended returns or carrybacks do not
affect Repap's liability for Taxes.
Section I. Savings and Costs to Buyer Resulting from Adjustments
to Tax Returns for Periods Prior to Closing. 1. If, after the Closing, an
adjustment required by a taxing authority in any item reflected on a Tax
Return of Repap USA or any of its Subsidiaries relating to any taxable
period, or portion thereof, ending on or before the Closing Date results in a
Tax benefit (including any deduction, credit, net operating loss or similar
loss or deduction) becoming available to Buyer or any of its Affiliates
(including Repap USA and any of its Subsidiaries) with respect to any taxable
period beginning after the Closing, Buyer agrees to recognize, and to cause
its Affiliates to recognize, any such adjustment on its or their Tax Returns
and to claim to the fullest extent possible all deductions and credits
available as a result. Buyer shall pay to Repap an amount equal to the
estimated net decrease in the Tax liability of Buyer and its Affiliates as a
result of the Tax benefit becoming available. The estimated net decrease in
the Tax liability of Buyer and its Affiliates shall be determined by
multiplying any increase in deductions, net operating losses or other similar
items by twenty-nine percent (29%) and any increase in credits by zero
percent (0%).
2. If, after the Closing, an adjustment required by a taxing
authority in any item reflected on a Tax Return of Repap USA or any of its
Subsidiaries relating to any taxable period, or portion thereof, ending after
the Closing Date results in a Tax benefit (including any deduction, credit,
net operating loss or similar loss or deduction) becoming available to Repap
or any of its Continuing Affiliates with respect to any taxable period, or
portion thereof ending on or before the Closing, Repap agrees to recognize,
and to cause its Continuing Affiliates to recognize, any such adjustment on
its or their Tax Returns and to claim to the fullest extent possible all
deductions and credits available as a result. Repap shall pay to Buyer an
amount equal to the net decrease in the Tax liability of Repap and its
Continuing Affiliates as a result of claiming any such deduction or credit
(as compared to the Taxes they otherwise would have paid) at the time such
decrease is realized (whether by paying less Taxes or receiving a refund).
For purposes of determining the amount of any such decrease in Taxes paid,
any deductions or credits otherwise available to Repap or its Continuing
Affiliates shall be deemed to be used prior to the deductions or credits
resulting from such adjustment.
3. If, after the Closing, an adjustment required by a taxing
authority in any item reflected on a Tax Return of Repap USA or any of its
Subsidiaries relating to any taxable period, or portion thereof, ending on or
before the Closing Date results in loss or reduction in a Tax benefit
(including the loss or reduction of any deduction, credit, net operating
loss, or similar loss or deduction) otherwise available to Repap USA or any
of its Subsidiaries or to Buyer or any of its Affiliates with respect to any
taxable period beginning after the Closing, Repap shall pay to Buyer an
amount equal to the estimated net increase in the Tax liability of Buyer and
its Affiliates as a result of the loss or reduction of such Tax benefit at
the time such adjustment by the taxing authority becomes final. The
estimated net increase in the Tax liability of Buyer and its Affiliates shall
be determined by multiplying any loss or reduction in deductions, net
operating losses or other similar items by twenty-nine percent (29%) and any
loss or reduction in credits by zero percent (0%).
Section J. Survival of Obligations. The obligations of the
parties set forth in this Article V shall be unconditional and absolute and
shall remain in effect without limitation as to time.
ARTICLE VI.
CERTAIN COVENANTS AND AGREEMENTS
OF REPAP AND BUYER
Section A. Access and Information. 1. Repap shall permit Buyer
and its representatives after the date of execution of this Agreement to have
reasonable access, during regular business hours and upon reasonable advance
notice, to the real property owned or leased by Repap USA and the
Subsidiaries and to the officers, key employees, customers, suppliers and
parties to material contracts of Repap USA and the Subsidiaries, subject to
Repap's reasonable rules and regulations, and shall furnish, or cause to be
furnished, to Buyer any financial and operating data and other information
that is available with respect to the Business and properties of Repap USA
and the Subsidiaries as may be reasonably necessary for Buyer and Repap to
obtain any third party action, consent or approval required hereunder or as
Buyer shall from time to time otherwise reasonably request; provided that the
foregoing shall not require Repap to permit, prior to Closing, any
inspection, or to disclose any information, that (a) relates to its
proprietary coating formulas and its groundwood customers or (b) in its
reasonable judgment would result in the disclosure of any trade secrets of
third parties or violate any of Repap's, Repap USA's or any of the
Subsidiaries' obligations with respect to confidentiality if Repap shall have
used its reasonable best efforts to obtain the consent of such third party to
such inspection or disclosure.
2. In the event of the termination of this Agreement, Buyer at its
own expense shall promptly deliver (without retaining any copies thereof) to
Repap, or (at Repap's option) confirm in writing to Repap that it has
destroyed all Confidential Information furnished to Buyer or its
representatives by Repap, Repap USA, the Subsidiaries or any of their
respective agents, employees or representatives as a result hereof or in
connection herewith, whether so obtained before or after the execution
hereof, and all analyses, compilations, forecasts, studies or other documents
prepared by Buyer or its representatives which contain or reflect any such
Confidential Information. Buyer shall at all times prior to the Closing
Date, and in the event of termination of this Agreement, cause any
Confidential Information so obtained to be kept confidential and will not
use, or permit the use of, such information in its business or in any other
manner or for any other purpose except as contemplated hereby and except as
required by law.
3. All Confidential Information provided or obtained pursuant to
clause (a) above shall be held by Buyer in accordance with and subject to the
terms of the confidentiality agreement, dated September 24, 1996, between
Buyer and Repap (the "Confidentiality Agreement"). At Closing, the
Confidentiality Agreement shall terminate and shall be of no further force
and effect except as provided therein.
4. As used in this Agreement, "Confidential Information" means
confidential business information regarding Repap, Repap USA or the
Subsidiaries, including customer lists and files, prices and costs, Business
and financial records, information relating to personnel contracts and
offices and positions held, stock ownership, liabilities, litigation and the
terms of this Agreement and any written analysis or other document reflecting
such information that such party prepares. However, "Confidential
Information" shall not include:
a. any information already in the possession of Buyer prior
to September 24, 1996, or information available to Buyer from
public records or from other sources in accordance with law;
b. any information that is in the public domain or
subsequently enters the public domain otherwise than through
disclosure by Buyer or any of Buyer's representatives;
c. any information that is capable of being independently
developed by or on behalf of Buyer without reference to the
Confidential Information; or
d. any information that is acquired from a third party not
known by Buyer after reasonable inquiry to be providing such
information in breach of a confidentiality obligation to Repap,
Repap USA or the Subsidiaries.
5. Repap agrees that, at Closing, Repap will assign to Buyer all
rights of Repap in connection with the Confidential Information of Repap USA
and the Subsidiaries and will deliver to Buyer copies of any written
agreements and documents relating thereto.
Section B. Registrations, Filings and Consents. Repap and Buyer
will cooperate and use their respective reasonable best efforts to fulfill
the conditions precedent to the other party's obligations hereunder,
including but not limited to, securing as promptly as practicable all
consents, approvals, waivers and authorizations required, necessary or
desirable in connection with the transactions contemplated hereby. Buyer and
Repap will promptly file documentary materials required by the HSR Act, the
Competition Act, Environmental Laws and each of the other items listed in
Section 3.4 of Annex A and Section 4.2 of Annex B and promptly file any
additional information requested as soon as practicable after receipt of
request thereof; provided that each party shall duly file with the FTC and
the Antitrust Division the notification and report form (the "Report")
required under the HSR Act, or an application for an advanced ruling
certificate or a comparable report required under the Competition Act with
respect to the sale and purchase of the Shares no later than three Business
Days after the date hereof.
Section C. Operation of Business. During the period commencing on
the date hereof and continuing until the Closing Date, unless Buyer shall
otherwise agree in writing (such agreement not to be unreasonably withheld)
or as otherwise expressly contemplated or permitted by this Agreement, Repap
agrees that it will cause:
1. Repap USA and the Subsidiaries to carry on their Businesses in
the regular and ordinary course (in substantially the same manner as
heretofore conducted) and use their best efforts to preserve intact their
Businesses, organizations, employees, customers, suppliers and goodwill;
2. Repap USA and the Subsidiaries not to subdivide, consolidate,
redeem, purchase or otherwise acquire or reclassify any of their outstanding
shares of any class of capital stock, declare any dividends on or make other
distributions (whether in cash, stock or property or any combination thereof)
in respect of their shares of any class of capital stock;
3. Repap USA and the Subsidiaries not to amend their articles or
by-laws or similar organizational documents;
4. Repap USA and the Subsidiaries not to issue, authorize or
propose or commit to the issuance of (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to purchase
or otherwise), or, directly or indirectly, through an Affiliate or otherwise,
purchase or propose the purchase of, any shares in their capital of any class
or securities convertible into or exchangeable for, or rights, warrants or
options to acquire, any such shares or other convertible or exchangeable
securities;
5. Repap USA and the Subsidiaries not to merge or consolidate with
or into any other Person;
6. Repap USA and the Subsidiaries not to sell, lease, transfer,
mortgage, hypothecate or otherwise dispose of any of their assets or
properties, real, personal or mixed, moveable or immoveable, that are
material, individually or in the aggregate, to the Business, assets,
financial condition or results of operations of Repap USA and the
Subsidiaries or Buyer and its subsidiaries, as the case may be, taken as a
whole;
7. Repap USA and the Subsidiaries not to (i) incur indebtedness
for money borrowed in excess of $250,000, or assume, guarantee, endorse or
otherwise become liable or responsible for the obligations of any other
Person in excess of such amount, or issue or sell any debt securities (it
being understood that such prohibition shall not otherwise prevent or hinder
the drawing of funds pursuant to lease arrangements or credit facilities
established and available as of the date hereof); (ii) approve any new
capital expenditures in excess of $100,000 individually and $1,000,000 in the
aggregate except for those listed on Schedule 2.3(a)(iv); (iii) dispose of or
incur, create or assume any Encumbrance on any individual capital asset of
Repap USA or the Subsidiaries if the greater of the book value and the fair
market value of such capital asset exceeds $250,000 other than Permitted
Encumbrances; and (iv) enter into a contract, agreement, commitment or
arrangement with respect to any of the foregoing;
8. Repap USA and the Subsidiaries to grant to any officer of Repap
USA or the Subsidiaries any increase in compensation or in severance or
termination pay, or enter into new or amend existing agreements respecting
employment (including benefits) with any officer or employee of Repap USA or
the Subsidiaries, except as may be required under employment or termination
agreements in effect on the date hereof or as may be required by law;
9. Repap USA and the Subsidiaries to maintain inventories of raw
materials and finished goods at current levels, except for sales and
purchases in the ordinary course of business, and maintain the properties of
the Business in good repair, order and condition, reasonable wear and tear
excepted;
10. Repap USA and the Subsidiaries not to amend or terminate any
material agreement;
11. Repap USA and the Subsidiaries not take any action to seek,
encourage, solicit or support any inquiry, proposal, expression of interest
or offer from any other Person or entity with respect to an acquisition,
combination or similar transaction involving the Shares, any Subsidiary, the
Businesses of Repap USA and the Subsidiaries or substantially all of the
assets or securities related thereto (any such inquiry, proposal, expression
of interest or offer being hereinafter referred to as an "Acquisition
Proposal"), and Repap will promptly inform Buyer of the existence of any such
Acquisition Proposal and shall not without the written consent of Buyer
furnish any information to or participate in any discussions or negotiations
with any other Person or entity regarding the same; provided, however, that
nothing contained in this Agreement shall prevent Repap or its Subsidiaries
from (A) providing information in response to a request therefor in
connection with an Acquisition Proposal by any such Person or entity if the
Board of Directors receives from such Person or entity so requesting such
information an executed confidentiality agreement on terms substantially
similar to those contained in the Confidentiality Agreement; (B) engaging in
any negotiations or discussions with respect to an Acquisition Proposal with
any such Person or entity; or (C) terminating this Agreement in the context
of a competing Acquisition Proposal if and only to the extent that, in each
such case referred to in clause (A), (B) or (C) above, the Board of Directors
of Repap determines in good faith after consultation with outside legal
counsel that such action is necessary in order for its directors to comply
with their respective fiduciary duties under applicable law;
12. Repap USA or its Subsidiaries not to enter or agree to enter
into any agreement, except as otherwise set forth in this Agreement, pursuant
to which Repap or any Subsidiary would be obligated to expend, or entitled to
receive, more than $100,000 in any 12 month period or which Repap USA or its
Subsidiaries, upon cancellation by Repap USA or the Subsidiaries upon less
than three (3) months' notice, are required to incur or fund additional
expenditures, penalties or increased costs;
13. Repap USA and the Subsidiaries not to renew or enter into any
leases for sales offices; and
14. Repap USA and the Subsidiaries to enter into any transaction
or perform any act which might interfere or be inconsistent with the
successful completion of the transactions contemplated by this Agreement or
which would render inaccurate any of the representations and warranties set
forth herein if such representations and warranties were made at a date
subsequent to such transaction or act and all references to the date hereof
were to such later date.
From the date hereof through the Closing, Repap shall confer on a
regular and frequent basis with one or more designated representatives of
Buyer to report material operational matters and the general status of
ongoing operations of the Businesses of Repap USA and the Subsidiaries.
Repap shall promptly notify Buyer of any material change in the
financial condition, results of operations, properties or Businesses of Repap
USA or any Subsidiary or prospects of the Businesses of Repap USA and the
Subsidiaries, and shall keep Buyer fully informed of such events and permit
Buyer's representatives to participate in all discussions relating thereto.
Section D. Continued Employment; Employee Benefit Plans. 1.
Buyer shall cause Repap USA and the Subsidiaries to, maintain for a period of
at least one year after the Closing Date the Plans disclosed on Schedule 3.12
as in effect for the Employees on the Closing Date, provided that, at
Closing, each and every Plan subject to the funding requirements of Section
412 of the Code has assets sufficient to cover the applicable Plan
liabilities for active, former and retired employees, on a fully funded basis
as actuarially determined using the actuarial assumptions in effect for the
Plan year including the Closing Date; provided further, however, that,
notwithstanding the foregoing, the Severance Plans maintained by Repap USA or
any of the Subsidiaries as of the Closing Date shall remain in effect without
any modification adverse to the participants thereunder for at least one year
after the Closing Date, and any employee whose employment is terminated and
who is otherwise eligible for severance benefits pursuant to the Severance
Plans shall be entitled to severance benefits based upon base pay and
employment position at levels at least equal to those applicable as of the
Closing Date (other than on account of any reduction in position voluntarily
agreed to in writing by any such employee). For purposes of this Agreement,
the "Severance Plans" shall mean the severance plans of Repap USA and the
Subsidiaries designated in writing by Repap and consented to by Buyer, which
consent shall not be unreasonably withheld.
2. Repap agrees that, prior to Closing, it will be solely liable
for obligations to the Employees under any benefit plans not maintained by
Repap USA or a Subsidiary. Effective as of the Closing Date, (i) the
Employees shall cease to participate in the employee benefit plans of Repap
or any of its Affiliates other than Repap USA or a Subsidiary and (ii) Repap
shall cause the Employees to be fully vested in their accounts under any such
benefit plan.
3. Repap agrees that, prior to Closing, it will cause Repap USA
and the Subsidiaries, as applicable, to terminate certain employees as
provided by Buyer to Repap prior to Closing (the "Listed Employees");
provided, however, that Buyer acknowledges that Repap USA and the
Subsidiaries remain liable for any amounts paid to the Listed Employees
pursuant to such termination under the Severance Plans, except for Listed
Employees who, following such termination, are employed by Repap or any
Affiliate of Repap.
Buyer agrees that it shall indemnify, defend and hold harmless the
Repap Indemnified Parties from and against any Losses imposed upon the Repap
Indemnified Parties directly or indirectly relating to or arising out of the
termination of employment of the Listed Employees in violation of law,
including, but not limited to, wrongful discharge, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in
Employment Act, ERISA, the Worker Adjustment and Retraining Notification Act
(each as amended from time to time) or similar federal, state or local laws.
4. The Employees shall be given credit for all service with Repap,
Repap USA or any of its Subsidiaries (or service credited by Repap, Repap USA
or any of its Subsidiaries) for purposes of eligibility, vesting and the
satisfaction of any waiting periods (but not for purposes of benefit
accruals) under any employee benefit plan or arrangement of Buyer in which
they participate following the Closing Date.
Section E. Retention of Books and Records. Buyer shall cause
Repap USA and the Subsidiaries to retain, until all applicable tax statutes
of limitations (including periods of waiver) have expired, all books, records
and other documents pertaining to Repap USA and the Subsidiaries in existence
on the Closing Date for a period of at least five (5) years from the date
hereof and to make the same available after the Closing Date for inspection
and copying by Repap or its agents at Repap's expense, during regular
business hours and upon reasonable request and upon reasonable advance
notice. After the expiration of such period, no such books and records shall
be destroyed by Buyer without first advising the tax director or other appro-
priate officer of Repap in writing detailing the contents thereof and giving
Repap at least 30 days to obtain possession thereof.
Section F. Closing Date Financial Information. For a period of
one year from and after the Closing Date, to the extent reasonably necessary
for Repap or its Continuing Affiliates to prepare consolidated financial
statements or any governmental permits, licenses or required filings and to
comply with reporting obligations in respect thereof, upon the written
request of Repap, Repap USA and the Subsidiaries will provide, and Buyer
shall use its best efforts to cause Repap USA and the Subsidiaries to
provide, to Repap and its accountants within 20 Business Days of such request
with such computer support, access to employees and Buyer's accountants and
financial information of Repap USA or the Subsidiaries as of the Closing Date
as Repap may reasonably request.
Section G. Notification of Certain Matters. Until the Closing
Date, each of Buyer and Repap shall promptly notify the other if any of the
representations and warranties made by it and contained in this Agreement
ceases to be true, accurate and complete in any material respect and of any
failure to comply in any material respect with any of its obligations under
this Agreement. Notification of any breach of representation or warranty or
failure to comply with any obligations shall not constitute or be deemed a
waiver of any of the conditions set forth in Article VII or prejudice the
rights of the parties pursuant to Article VII hereof not to consummate the
transactions contemplated by this Agreement.
Section H. Non-Solicitation of Employees. Repap agrees that, for
a period of one (1) year following the Closing Date, neither Repap nor any
Continuing Affiliate shall solicit the employment of any Person, other than
as agreed by the parties, it knows to be an employee of Repap USA or any of
its Subsidiaries or employ any Person it knows to be such an employee (other
than any hourly worker or any Employee who serves in a clerical function)
without the prior written consent of Buyer; provided, however, that (i)
general solicitations of employment published in a journal, newspaper or
other publication of general circulation and not specifically directed
towards such employees shall not be deemed to constitute solicitation for
purposes of this Section 6.8 and (ii) Repap, its Continuing Affiliates and
representatives shall not be prohibited from employing any such person who
contacts them on his or her own initiative and without any solicitation by
Repap, its Continuing Affiliates and representatives.
Section I. Further Assurances. At any time after the Closing
Date, Repap and Buyer shall promptly, and Buyer shall cause Repap USA or any
Subsidiary promptly to, execute, acknowledge and deliver any other assurances
or documents reasonably requested by Buyer or Repap, as the case may be, and
necessary for Buyer or Repap, as the case may be, to satisfy its obligations
hereunder or obtain the benefits contemplated hereby.
Section J. Stockholders Meeting. Repap shall take, in accordance
with its certificate of incorporation and by-laws, all action necessary to
convene a meeting of holders of shares of Common Stock of Repap as promptly
as practicable after the date hereof to consider and vote upon the approval
of the transactions contemplated by this Agreement. Subject to fiduciary
obligations under applicable law, the Board of Directors of Repap shall
recommend such approval and shall take all lawful action to solicit such
approval.
Section K. Certain Interests After Closing Date. Buyer shall
cause Repap Sales to continue to do business with WWF at a volume consistent
with past practice on Buyer's standard terms and conditions with its
customers for a period of two years beginning on the Closing Date. Buyer
shall give Repap and WWF at least six months prior written notice of its
intent to terminate such relationship; provided, however, that no such notice
shall be given prior to eighteen (18) months following the Closing Date; and,
provided further, that such relationship may be immediately terminated if WWF
fails to comply with any of its payment obligations to Repap Sales.
ARTICLE VII.
CONDITIONS TO CLOSING
Section A. Conditions to Obligations of Buyer. The obligation of
Buyer to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction or waiver by Buyer in writing on or prior to the
Closing Date of each of the following conditions:
1. Each of the representations and warranties of Repap contained
in this Agreement which refers to a Material Adverse Effect or otherwise
makes reference to a concept of materiality shall be true when made and as of
the Closing Date, and each of the other representations and warranties of
Repap contained in this Agreement shall be true and correct when made and as
of the Closing Date, with the same effect as though such representations and
warranties had been made on and as of the Closing Date (except (i) repre-
sentations and warranties that are made as of a specific date need be true,
or true in all material respects, as the case may be, only as of such date
and (ii) as expressly permitted by this Agreement to be changed between the
date of this Agreement and the Closing Date); each of the covenants and
agreements of Repap to be performed on or prior to the Closing Date shall
have been duly performed; and Buyer shall have received at the Closing
certificates to that effect dated as of the Closing Date and executed on be-
half of Repap by its President or any of its Vice Presidents and its
Secretary or any of its Assistant Secretaries.
2. Buyer shall have received from Repap: (i) an opinion of
Stikeman Elliott, Canadian outside counsel to Repap, dated as of the Closing
Date, substantially in the form set forth in Schedule 7.1(b) hereof, (ii) an
opinion of Foley & Lardner, U.S. outside counsel to Repap, dated as of the
Closing Date, in a form mutually acceptable to Repap and Buyer and (iii) an
opinion of Sullivan & Cromwell, U.S. outside counsel to Repap, dated as of
the Closing Date, in a form mutually acceptable to Repap and Buyer.
3. Repap shall have delivered to Buyer resignations of all
directors of Repap USA and the Subsidiaries and all officers of Repap USA and
the Subsidiaries.
4. Repap shall acquire from GSP and Skeena prior to Closing, all
of the Repap Wisconsin Preferred Shares.
5. Repap USA shall not (i) hold any interest in WWF, (ii) hold any
investment in the preferred stock of Repap; (iii) hold any investment in the
preferred stock of Skeena; and (iv) hold any interest in any of Nitec Paper
Corp., Nitec International Sales Corp. and Nitec/Midtec Sales Inc.
6. Except for a $4.5 million net receivable from Repap New
Brunswick Inc., which shall be paid to Repap Sales in 12 monthly installments
of equal amounts over one year with the first such installment payable on the
Closing Date, neither Repap USA nor any Subsidiary shall have any outstanding
accounts receivable from, or accounts payable to, Repap or any Repap
Affiliate, and Repap USA and the Subsidiaries shall have terminated all
agreements and arrangements with Repap and the Repap Affiliates except as
specifically provided herein and except as set forth in Schedule 7.1(f)
hereto.
7. Repap shall have caused the pledge to TD Capital Group Limited
to be released with respect to the capital stock of Repap USA and the
Subsidiaries.
8. Buyer shall have received an affidavit of an officer of Repap
sworn to under penalties of perjury and dated the Closing Date, in form and
substance satisfactory to counsel for Buyer, that, as of that date, an
interest in Repap USA does not constitute a "U.S. real property interest"
within the meaning of Section 897 of the Internal Revenue Code.
9. George S. Petty shall have entered into an agreement with Buyer
to vote his shares of common stock of Repap at the meeting of stockholders of
Repap contemplated in Section 6.10 to approve the transactions contemplated
by this Agreement.
Section B. Conditions to Obligations of Repap. The obligation of
Repap to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction or waiver by Repap in writing on or prior to the
Closing Date of each of the following conditions:
1. Each of the representations and warranties of Buyer contained
in this Agreement qualified by a concept of materiality shall be true when
made and as of the Closing Date, and each of the other representations and
warranties of Buyer contained in this Agreement shall be true and correct
when made and as of the Closing Date, with the same effect as though such
representations and warranties had been made on and as of the Closing Date
(except (i) representations and warranties that are made as of a specific
date need be true, or true in all material respects, as the case may be, only
as of such date and (ii) as expressly permitted by this Agreement to change
between the date of this Agreement and the Closing Date); each of the
covenants and agreements of Buyer to be performed on or prior to the Closing
Date shall have been duly performed; and Repap shall have received at the
Closing certificates to that effect dated as of the Closing Date and executed
on behalf of Buyer by its President or any of its Vice Presidents and its
Secretary or any of its Assistant Secretaries.
2. Repap shall have received from McDermott, Will & Emery, as
counsel for Buyer, an opinion, dated as of the Closing Date, in a form
mutually acceptable to Repap and Buyer.
Section C. Conditions to Obligations of Buyer and Repap. The
obligations of the parties to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction or waiver by both parties
on or prior to the Closing Date of the following conditions:
1. Each party shall have duly filed with the FTC and the Antitrust
Division the Report required under the HSR Act with respect to the sale and
purchase of the Shares and the waiting period required by the HSR Act, and
any extensions thereof obtained by request or other action of the FTC and/or
the Antitrust Division shall have expired or been earlier terminated by the
FTC and the Antitrust Division.
2. No court or governmental authority of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute,
rule, regulation or non-appealable judgment, decree, injunction or other
order which is in effect on the Closing Date and prohibits the consummation
of the Closing.
3. The agreements set forth in Schedule 7.1(f) shall have been
entered into and be in full force and effect.
4. The transactions contemplated by this Agreement shall have been
duly approved by the Requisite Vote of the shareholders of Repap.
5. The Competition Act Director or any person authorized to
exercise the powers and perform the duties of the Competition Act Director
shall have issued a certificate under section 102(l) of the Competition Act
to the effect that she is satisfied that she would not have sufficient
grounds on which to apply to the Competition Tribunal established pursuant to
the Competition Act under Section 92 of the Competition Act in respect of the
transactions contemplated by this Agreement or the appropriate time period
specified in Section 123 of the Competition Act shall have expired or the
Competition Act Director shall have indicated in writing that she does not
intend to take any action under Section 92 of the Competition Act whether
before or after the completion of the transactions contemplated by this
Agreement.
ARTICLE VIII.
TERMINATION
Section A. Termination. This Agreement may be terminated at any
time prior to the Closing:
1. by agreement of Buyer and Repap;
2. by either Buyer or Repap, by giving written notice of such
termination to the other party, if (x) any condition to the terminating
party's obligations hereunder has not been satisfied or waived and (y) the
Closing shall not have occurred on or prior to the later of (i) September 30,
1997 and (ii) the expiration of the waiting period under the HSR Act
including any extensions thereof; provided that the terminating party is not
in material breach of its obligations under this Agreement;
3. by either Buyer or Repap, by giving written notice of such
termination to the other party, if (x) each condition thereto shall have been
satisfied or waived and (y) the Closing shall not have occurred on or prior
to the later of (i) September 30, 1997 and (ii) the expiration of the waiting
period under the HSR Act including any extensions thereof; provided that the
terminating party is not in material breach of its obligations under this
Agreement;
4. by either Buyer or Repap if there shall be in effect any law or
regulation that prohibits the consummation of the Closing or if consummation
of the Closing would violate any non-appealable final order, decree or
judgment of any court or governmental body having competent jurisdiction;
5. by Repap if the Closing shall not have occurred on or prior to
10 Business Days following the satisfaction of all the conditions to Closing
set forth in Sections 7.1 and 7.3 hereof as a result of any action or
inaction by Buyer;
6. by Buyer if the Closing shall not have occurred on or prior to
10 Business Days following the satisfaction of all the conditions to Closing
set forth in Sections 7.2 and 7.3 hereof as a result of any action or
inaction by Repap;
7. by Buyer if Repap's Board of Directors fails to recommend that
such stockholders approve the sale of the Shares to Buyer; or
8. by Repap, as set forth in Section 6.3(k).
Section B. Effect of Termination. 1. In the event of the
termination of this Agreement in accordance with Section 8.1 hereof, this
Agreement shall thereafter become void and have no effect, and no party
hereto shall have any liability to the other party hereto or their respective
Affiliates, directors, officers or employees, except for the obligations of
the parties hereto contained in this Section 8.2 and in Sections 6.1(b),
6.1(c), 10.2 and 10.4 hereof, and except that nothing herein will relieve any
party from liability for any breach of this Agreement prior to such
termination.
2. In the event that either (A) Repap's Board of Directors fails
to recommend that such stockholders approve the sale of the Shares to Buyer
and this Agreement is terminated pursuant to Section 8.1, or (B) this
Agreement is terminated pursuant to Section 8.1, and at any time prior to
September 30, 1998, Repap, Repap USA or any Affiliate thereof enters into an
agreement, agreement in principle, letter of intent or similar understanding
with respect to, or consummates, an Acquisition Proposal, then Repap, Repap
USA and Repap Sales shall promptly (but in no event later than five days
after the date of such termination or the occurrence of such event as the
case may be) pay, on a joint and several basis, to Buyer a termination fee of
$25.0 million payable by wire transfer of same day funds.
3. In addition to (b) above, in the event that the approval of the
stockholders of Repap shall not have been obtained prior to September 30,
1997 and Buyer shall have terminated this Agreement pursuant to Section 8.1,
then Repap, Repap USA and Repap Sales shall pay, on a joint and several
basis, to Buyer on the business day following such termination, a fee of
$10.0 million payable by wire transfer of same day funds. In the event that
Buyer thereafter acquires the Business from Repap on terms substantially
similar to those contained herein prior to September 30, 1998, the price paid
by Buyer shall be increased by the $10.0 million received by Buyer pursuant
to this section.
4. In no event shall Repap, Repap USA and Repap Sales be required
to pay, in the aggregate, more than $35.0 million pursuant to Sections 8.2(b)
and (c) to this Agreement.
ARTICLE IX.
SURVIVAL AND INDEMNIFICATION
Section A. Survival of Representations, Warranties, Covenants and
Agreements; Knowledge of Breach. 1. Notwithstanding any otherwise
applicable statute of limitations, the representations and warranties
included or provided for herein shall survive the Closing until two (2) years
after the Closing Date; provided, however, that any representation, warranty,
covenant or agreement contained in Sections 3.14 and 3.18 of Annex A hereto,
Sections 4.4 and 4.6 of Annex B hereto, and Article V hereof shall survive
the Closing until the expiration of the applicable statute of limitations
(including any waivers or extensions thereof) with respect to such matters;
provided further, that no limitation shall apply to claims alleging fraud on
the part of a party hereto. The covenants and other agreements contained in
this Agreement shall survive the Closing until the date or dates specified
therein or the expiration of the applicable statute of limitations (including
any waivers or extensions thereof) with respect to such matters, whichever is
later. Except with respect to the representations, warranties, covenants and
agreements contained in Sections 3.18 and 4.4 and Article V hereof, in no
event shall Buyer be liable to Repap or Repap be liable to Buyer, as the case
may be, for any breach of the representations, warranties, covenants and
agreements included or provided for herein or in any schedule or certificate
or other document delivered pursuant to this Agreement, unless and until all
claims for which damages are recoverable hereunder by Buyer or Repap, as the
case may be, exceed $1,000,000 (the "Deductible"), in which case Buyer or
Repap, as the case may be, shall be entitled to recover on the amount of such
claims in excess of the Deductible; provided, however, that the maximum
liability of Buyer or Repap, as the case may be, for claims and damages shall
be $75,000,000 (assuming an aggregate of $76,000,000 of indemnifiable claims)
(the "Maximum Amount"); provided, further, that exclusively for purposes of
this Article IX, in determining whether there is a breach of, or action or
state of facts inconsistent with, any representation or warranty, the terms
"material", "materiality" and "Material Adverse Effect", when applied to such
representation and warranty, shall mean damages in excess of $150,000 (the
"Damage Threshold") for each individual proven claim (or group of claims
arising from the same event, condition or course of conduct) for which
indemnification is being sought (whether or not such claim is being made
against the Deductible). For this purpose, if the relevant representation
and warranty contains a material, materiality or Material Adverse Effect
standard in the aggregate, the Damage Threshold shall similarly apply in the
aggregate.
2. No party hereto shall be deemed to have breached any
representation, warranty, covenant or agreement if (i) such party shall have
notified the other parties hereto in writing, at least five days prior to the
Closing Date, of the breach of, or inaccuracy in, or of any facts or
circumstances constituting or resulting in the breach of or inaccuracy in,
such representation, warranty, covenant or agreement, specifically referring
to the provisions of this Agreement so breached or rendered inaccurate, and
(ii) such other party has permitted the Closing to occur and, for purposes of
this Agreement, is thereby deemed to have waived such breach or inaccuracy;
provided, however, that a disclosure pursuant to this Section 9.1(b) shall
not prejudice the rights of the parties pursuant to Article VII hereof not to
consummate the transactions contemplated by this Agreement.
Section B. Indemnification. 1. For a period commencing on the
Closing Date and ending, as the case may be, upon the expiration of the
periods specified in Section 9.1(a) hereof, Repap on the one hand, or Buyer,
on the other hand (the "Indemnifying Party"), shall, subject to the
limitations set forth in Sections 9.1(a) and 9.1(b) hereof, indemnify
respectively Buyer, on the one hand, or Repap, on the other hand, as the case
may be (the "Indemnified Party"), against and in respect of all losses,
damages, liabilities, costs and expenses (including reasonable attorneys'
fees and expenses incurred in investigating, preparing or defending any
claims covered hereby) (collectively, "Losses") sustained or incurred arising
out of any breaches of the Indemnifying Party's representations, warranties,
covenants and agreements set forth in this Agreement (other than
representations, warranties, covenants and agreements set forth in Article V,
as to which the indemnification provisions set forth in Article V shall
govern). Any payments pursuant to this Section 9.2 or Article V shall be
treated as an adjustment to the Purchase Price for all Tax purposes.
2. Repap releases and waives any right of indemnity and
contribution from Repap USA and the Subsidiaries.
3. The indemnity provided herein as it relates to this Agreement
and the transactions contemplated by this Agreement shall be the sole and
exclusive remedy of the parties hereto, their Affiliates, successors and
assigns with respect to any and all claims for losses, damages, liabilities,
costs and expenses sustained or incurred arising out of this Agreement and
the transactions contemplated by this Agreement, except for the right of the
parties hereto to seek specific performance of the obligations set forth in
Article II and Sections 6.4 and 6.8 of this Agreement and, except for any
other remedies available to Repap or Buyer, as the case may be, based upon
fraud.
Section C. Method of Asserting Claims, etc. All claims for
indemnification by any Indemnified Party hereunder shall be asserted and
resolved as set forth in this Section 9.3 except for claims pursuant to
Article V hereof (as to which the provisions of Article V shall be applica-
ble). In the event that any written claim or demand for which an
Indemnifying Party would be liable to any Indemnified Party hereunder is
asserted against or sought to be collected from any Indemnified Party by a
third party, such Indemnified Party shall promptly, but in no event more than
30 Business Days following such Indemnified Party's actual receipt of such
claim or demand, notify the Indemnifying Party of such claim or demand and
the amount or the estimated amount thereof to the extent then feasible (which
estimate shall not in any manner prejudice the right of the Indemnified Party
to indemnification to the fullest extent provided hereunder) (the "Third
Party Claim Notice") and in the event that an Indemnified Party shall assert
a claim for indemnity under this Article IX, not including a third party
claim, the Indemnified Party shall notify the Indemnifying Party promptly
following its discovery of the facts or circumstances giving rise thereto
(together with a Third Party Claim Notice, a "Claim Notice"); provided, that
no such notice need be provided to an Indemnifying Party if the Deductible
has not been exceeded and will not be exceeded by such claim or demand; and
provided, further, that the failure to notify on the part of the Indemnified
Party in the manner set forth herein shall not foreclose any rights otherwise
available to such Indemnified Party hereunder, except to the extent that the
Indemnifying Party is prejudiced by such failure to notify. The Indemnifying
Party shall have 30 days from the personal delivery or mailing of the Third
Party Claim Notice (except that such a period shall be decreased to a time 10
days before a scheduled appearance date in a litigated matter) (the "Notice
Period") to notify the Indemnified Party (i) whether or not the Indemnifying
Party disputes the liability of the Indemnifying Party to the Indemnified
Party hereunder with respect to such claim or demand and (ii) whether or not
it desires to defend the Indemnified Party against such claim or demand,
which it shall not be entitled to do until the Deductible is exceeded. All
costs and expenses incurred by the Indemnifying Party in defending such claim
or demand shall be a liability of, and shall be paid by, the Indemnifying
Party; provided, however, that the amount of such costs and expenses incurred
by the Indemnifying Party shall be separate and apart from, and shall not be
included in, the Maximum Amount. In the event that the Indemnifying Party
notifies the Indemnified Party within the Notice Period that it desires to
defend the Indemnified Party against such claim or demand, which it shall not
be entitled to do until the Deductible is exceeded and except as hereinafter
provided, the Indemnifying Party shall have the right to defend the
Indemnified Party by appropriate proceedings and by counsel reasonably
acceptable to the Indemnified Party. If any Indemnified Party desires to
participate in, but not control, any such defense or settlement it may do so
at its sole cost and expense. The Indemnified Party shall not settle a claim
or demand without the consent of the Indemnifying Party. The Indemnifying
Party shall not, without the prior written consent of the Indemnified Party,
settle, compromise or offer to settle or compromise any such claim or demand
on a basis which would result in the imposition of a consent order,
injunction or decree which would restrict the future activity or conduct of,
or which would otherwise have a material adverse effect on, the Indemnified
Party or any subsidiary or Affiliate thereof. If the Indemnifying Party
elects not to defend the Indemnified Party against such claim or demand,
whether by not giving the Indemnified Party timely notice as provided above
or otherwise, then the amount of any such claim or demand, or, if the same be
contested by the Indemnified Party, then that portion of any such claim or
demand as to which such defense is unsuccessful (and all reasonable costs and
expenses pertaining to such defense) shall be the liability of the
Indemnifying Party hereunder, subject to the limitations set forth in
Section 9.1 hereof. To the extent the Indemnifying Party shall control or
participate in the defense or settlement of any third party claim or demand,
the Indemnified Party will give to the Indemnifying Party and its counsel
reasonable access to all business records and other documents relevant to
such defense or settlement, and shall permit them to consult with the
employees and counsel of the Indemnified Party. The Indemnified Party shall
use its best efforts in the defense of all such claims, and in connection
therewith shall be entitled to reimbursement by the Indemnifying Party of
expenses directly related to efforts undertaken at the specific request of
the Indemnifying Party.
ARTICLE X.
MISCELLANEOUS
Section A. Amendment and Modification; Waiver. This Agreement may
only be amended or modified in writing, signed by Repap and Buyer, at any
time prior to the Closing with respect to any of the terms contained herein.
At any time prior to the Closing either Repap or Buyer may (i) extend the
time for the performance of any of the obligations or other acts of the other
party hereto, (ii) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document delivered
pursuant hereto, and (iii) waive compliance with any of the agreements or
conditions of the other party contained herein. Any agreement on the part of
a party hereto to any such extension or waiver shall be valid if set forth in
an instrument in writing signed by the party granting such extension or
waiver.
Section B. Return of Information. If for any reason whatsoever
the sale and purchase of the Shares pursuant to this Agreement is not
consummated, Buyer shall promptly return to Repap or Repap USA all books,
records and documents of Repap, Repap USA or any Subsidiary (including all
copies, if any, thereof) furnished by Repap, Repap USA, any Subsidiary or any
of their respective agents, employees or representatives, and shall not use
or disclose the Confidential Information contained in such books, records or
documents for any purpose or make such Confidential Information available to
any other entity or person.
Section C. Expenses. Except as otherwise expressly provided in
this Agreement, whether or not the transactions contemplated by this
Agreement are consummated, the parties shall bear their own respective
expenses (including, but not limited to, all compensation and expenses of
counsel, financial advisors, consultants, actuaries and independent
accountants) incurred in connection with this Agreement and the transactions
contemplated hereby.
Section D. Public Disclosure. Each of the parties to this
Agreement hereby agrees with the other parties hereto that, except as may be
required to comply with the requirements of applicable law or the rules and
regulations of the stock exchanges upon which the securities of the parties
or their Affiliates are listed, no press release or similar public
announcement or communication will be made or caused to be made concerning
the execution or performance of this Agreement unless specifically approved
in advance by all parties hereto; provided, however, that to the extent that
either party to this Agreement is required by law or the rules and
regulations of any stock exchange upon which the securities of one of the
parties or its Affiliates is listed to make such a public disclosure, such
public disclosure shall only be made after prior consultation with the other
party to this Agreement.
Section E. Assignment. No party to this Agreement may assign any
of its rights or obligations under this Agreement without the prior written
consent of the other party hereto.
Section F. Entire Agreement. This Agreement (including all
Annexes and Schedules hereto) contains the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral or written, with respect to such
matters, except for the Confidentiality Agreement which will remain in full
force and effect for the term provided for therein.
Section G. Fulfillment of Obligations. Any obligation of any
party to any other party under this Agreement, which obligation is performed,
satisfied or fulfilled by an Affiliate of such party, shall be deemed to have
been performed, satisfied or fulfilled by such party.
Section H. Parties in Interest; No Third Party Beneficiaries.
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any Person other
than Buyer, Repap, or their successors or permitted assigns, any rights or
remedies under or by reason of this Agreement.
Section I. Schedules. The inclusion of any matter in any schedule
to this Agreement shall be deemed to be an inclusion for all purposes of this
Agreement, including each representation and warranty to which it may relate,
but inclusion therein shall expressly not be deemed to constitute an
admission by Repap, or otherwise imply, that any such matter is material or
creates a measure for materiality for the purposes of this Agreement;
provided, however, that any disclosure made in the Disclosure Documents shall
not be deemed to be an inclusion in a schedule except as specifically stated.
Section J. Counterparts. This Agreement and any amendments hereto
may be executed in one or more counterparts, each of which shall be deemed to
be an original by the parties executing such counterpart, but all of which
shall be considered one and the same instrument.
Section K. Section Headings. The section and paragraph headings
and table of contents contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
Section L. Notices. All notices hereunder shall be deemed given
if in writing and delivered personally, by express delivery service or sent
by facsimile (confirmation requested), to the parties at the following
addresses (or at such other addresses as shall be specified by like notice):
1. if to Repap, to:
Repap Enterprises Inc.
1250 Rene-Levesque Blvd. West
Suite 3800
Montreal, Quebec
H3B 4Y3 Canada
Attention: Terry W. McBride, Esq.
Vice President and General
Counsel
Fax: (514) 846-1328
With a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Andrew D. Soussloff, Esq.
Fax: (212) 558-3588
(b) if to Buyer, to:
Consolidated Papers, Inc.
231 First Avenue North
Wisconsin Rapids, Wisconsin 54495
Attention: Carl H. Wartman, Esq.
General Counsel and Secretary
Fax: (715) 422-3203
With a copy to:
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606
Attention: Robert A. Schreck, Jr., P.C.
Fax: (312) 984-3669
Any notice given by delivery shall be effective when received. Any notice
given by facsimile shall be effective when the appropriate facsimile
answerback is received.
Section M. GOVERNING LAW; SUBMISSION TO JURISDICTION; SELECTION OF
FORUM. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF WISCONSIN WITHOUT REFERENCE TO THE CHOICE OF
LAW PRINCIPLES THEREOF. EACH PARTY HERETO AGREES THAT IT SHALL BRING ANY
ACTION OR PROCEEDING IN RESPECT OF ANY CLAIM ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTAINED IN OR CONTEMPLATED BY THIS
AGREEMENT, WHETHER IN TORT OR CONTRACT OR AT LAW OR IN EQUITY, EXCLUSIVELY IN
THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN (THE
"CHOSEN COURT") AND (I) IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE CHOSEN COURT, (II) WAIVES ANY OBJECTION TO LAYING VENUE IN ANY SUCH
ACTION OR PROCEEDING IN THE CHOSEN COURT, (III) WAIVES ANY OBJECTION THAT THE
CHOSEN COURT IS AN INCONVENIENT FORUM OR DOES NOT HAVE JURISDICTION OVER ANY
PARTY HERETO AND (IV) AGREES THAT SERVICE OF PROCESS UPON SUCH PARTY IN ANY
SUCH ACTION OR PROCEEDING SHALL BE EFFECTIVE IF NOTICE IS GIVEN IN ACCORDANCE
WITH SECTION 10.12 OF THIS AGREEMENT. REPAP IRREVOCABLY DESIGNATES F&L CORP.
AS ITS AGENT AND ATTORNEY-IN-FACT FOR THE ACCEPTANCE OF SERVICE OF PROCESS
AND MAKING AN APPEARANCE ON ITS BEHALF IN ANY SUCH CLAIM OR PROCEEDING AND
TAKING ALL SUCH ACTS AS MAY BE NECESSARY OR APPROPRIATE IN ORDER TO CONFER
JURISDICTION OVER IT UPON THE CHOSEN COURT AND REPAP STIPULATES THAT SUCH
CONSENT AND APPOINTMENT IS IRREVOCABLE AND COUPLED WITH AN INTEREST.
Section N. Severability. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other provisions
hereof. If any provision of this Agreement, or the application thereof to any
person or entity or any circumstance, is invalid or unenforceable, (a) a
suitable and equitable provision shall be substituted therefor in order to
carry out, so far as may be valid and enforceable, the intent and purpose of
such invalid or unenforceable provision and (b) the remainder of this
Agreement and the application of such provision to other persons, entities or
circumstances shall not be affected by such invalidity or unenforceability,
nor shall such invalidity or unenforceability affect the validity or
enforceability of such provision, or the application thereof, in any other
jurisdiction.
Section O. IN WITNESS WHEREOF, this Agreement has been signed on behalf
of each of the parties hereto as of the date first written above.
REPAP ENTERPRISES INC.
By:
Name:
Title:
By:
Name:
Title:
CONSOLIDATED PAPERS, INC.
By:
Name:
Title:
Annex A
3.1 Incorporation and Qualification
Repap is a corporation duly incorporated and validly subsisting under
the laws of Canada. Each of Repap USA and the Subsidiaries has been duly
incorporated, is validly existing and is in good standing under the laws of
its jurisdiction of incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
Business as now being conducted and is duly registered, licensed or qualified
to carry on business in each jurisdiction in which the nature of the Business
as now being conducted by it or the property owned or leased by it makes such
registration, licensing or qualification necessary, unless the failure to be
so registered or qualified would not have a Material Adverse Effect.
Schedule 3.1 sets forth each state or other jurisdiction in which each of
Repap USA and the Subsidiaries is licensed or qualified to do business.
Repap has delivered to Buyer an accurate, correct and complete copy of its
charter and by-laws and each agreement, trust, proxy or other arrangement
among its stockholders.
3.2 Capitalization
(a) The authorized capital stock of Repap USA consists of 9,000 shares
of common stock, without par value, of which the Shares are the only issued
and outstanding shares of capital stock of Repap USA. The Shares are duly
authorized, validly issued, fully paid and non-assessable and are owned of
record and beneficially by Repap. Repap has good and valid title to the
Shares and, upon consummation of the transactions contemplated in this
Agreement, shall have transferred such title to the Shares to Buyer pursuant
to the terms of this Agreement, free and clear of any liens, charges,
pledges, security interests, adverse claims or other encumbrances including,
but not limited to, the pledge to TD Capital Group Limited made pursuant to
the Standby Loan Agreement which will be released prior to Closing
(collectively, "Encumbrances"). There are not now, and at the Closing Date
there will not be, any outstanding options, warrants or rights to purchase or
acquire, or securities convertible into or exchangeable for, any shares in
the share capital of Repap USA and there are no contracts, commitments,
agreements, understandings, arrangements, restrictions, warrants, preemptive
rights, or outstanding subscription, convertible or exchangeable security,
other than the Standby Loan Agreement, which require Repap USA to issue, sell
or deliver any shares of its capital stock.
(b) The authorized capital stock of Repap Wisconsin consists of 300
shares of common stock, without par value, of which 105 shares of common
stock are issued and outstanding (the "Repap Wisconsin Common Shares"), and
8,700 shares of preferred stock of which the Repap Wisconsin Preferred Shares
are the only shares of preferred stock issued and outstanding. The Repap
Wisconsin Common Shares and the Repap Wisconsin Preferred Shares shall be
referred to collectively as the "Wisconsin Shares." The Wisconsin Shares are
the only shares of capital stock of Repap Wisconsin issued and outstanding.
The Wisconsin Shares are duly authorized, validly issued, fully paid and non-
assessable and, at Closing, will be owned of record and beneficially by Repap
or Repap USA. At Closing, Repap and Repap USA, collectively, will have good
and valid title to all the Wisconsin Shares free and clear of all
Encumbrances, including, but not limited to, the pledge to TD Capital Group
Limited made pursuant to the Standby Loan Agreement which will be released
prior to Closing. There are not now, and at the Closing Date there will not
be, any outstanding options, warrants or rights to purchase or acquire, or
securities convertible into or exchangeable for, any shares in the share
capital of Repap Wisconsin and there are no contracts, commitments,
agreements, understandings, arrangements, restrictions, warrants, preemptive
rights, or outstanding subscription, convertible or exchangeable security,
other than the Standby Loan Agreement, which require Repap Wisconsin to
issue, sell or deliver any shares of its capital stock.
As of the date hereof, Repap Wisconsin has outstanding $250 million in
aggregate principal amount of 9-1/4% First Priority Senior Secured Notes Due
2002 (the "First Priority Notes") and $150 million in aggregate principal
amount of 9-7/8% Second Priority Senior Secured Notes Due 2006 (the "Second
Priority Notes," and together with the First Priority Notes, the "Priority
Notes"), $23 million of which Second Priority Notes were held by Repap
Wisconsin.
(c) The authorized capital stock of Repap Sales consists of 200 shares
of common stock, without par value, of which 200 shares (the "Sales Shares")
are issued and outstanding. The Sales Shares are the only shares of capital
stock of Repap Sales issued and outstanding. The Sales Shares are duly
authorized, validly issued, fully paid and non-assessable and are owned of
record and beneficially by Repap USA. Repap USA has good and valid title to
the Sales Shares free and clear of all Encumbrances, except for the pledge to
Ferrostaal AG which will be released prior to Closing. There are not now,
and at the Closing Date there will not be, any outstanding options, warrants
or rights to purchase or acquire, or securities convertible into or
exchangeable for, any shares in the share capital of Repap Sales and there
are no contracts, commitments, agreements, understandings, arrangements,
restrictions, warrants, preemptive rights, or outstanding subscription,
convertible or exchangeable security, other than the Standby Loan Agreement,
which require Repap Sales to issue, sell or deliver any shares of its capital
stock.
3.3 Subsidiaries
Except for Repap Sales and Repap Wisconsin (each a "Subsidiary," and,
collectively, the "Subsidiaries"), there is no corporation, association,
limited liability company, partnership, joint venture or other entity which
is controlled directly or indirectly by Repap USA or which Repap USA or any
of the Subsidiaries owns any stock or has any equity investment or other
interest in (other than WWF). At the Closing Date, the shares of capital
stock of each Subsidiary will be owned 100% by Repap USA (except for those
Repap Wisconsin Preferred Shares owned by Repap) free and clear of all
Encumbrances, other than such Encumbrances on the shares of the Subsidiaries
referred to in the Standby Loan Agreement or in favor of Ferrostaal AG, or
such restrictions on transfer as are contained in the constituting documents
of the Subsidiaries; all such capital stock is duly authorized, validly
issued, fully paid and nonassessable and such shares are the only shares of
capital stock of such Subsidiaries issued and outstanding. There are not now,
and at the Closing Date there will not be, any outstanding subscriptions,
options, warrants, calls, commitments or agreements calling for, or any
preemptive rights in respect of, the issuance of any shares in the capital of
the Subsidiaries.
3.4 Authority; Filings, Consents and Approvals
Repap has the corporate power and authority to enter into this Agreement
and, subject to the receipt of the approvals, consents and authorizations
contemplated in this Agreement, to carry out the transactions contemplated
hereby. This Agreement has been, and the documents to be delivered at
Closing will be, duly authorized, executed and delivered by Repap and
constitutes a legal, valid and binding obligation of Repap, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles, and no other proceedings on the part of Repap are
necessary to authorize this Agreement and the consummation of the
transactions contemplated hereby.
Except as set forth in Schedule 3.4 or as required by the HSR Act, the
execution, delivery and performance of this Agreement will not require Repap,
Repap USA or any of the Subsidiaries to obtain any consent, waiver,
authorization or approval of, or make any filing with or give notice to, any
Person, except for such consents, waivers, authorizations or approvals which
the failure to obtain would not be reasonably likely to have a Material
Adverse Effect or would not prohibit or materially delay Repap's ability to
perform its obligations under this Agreement.
3.5 Absence of Changes
Except for the transactions contemplated hereby or as set forth in the
Financial Statements or Disclosure Documents or on Schedule 3.5, since
June 30, 1997, (i) there has not been any material change in the financial
condition, assets, liabilities, personnel or Business of Repap USA or any
Subsidiary, or in their relationships with suppliers, customers,
distributors, lenders, lessors or others, except changes in the ordinary
course of business, (ii) Repap USA and the Subsidiaries have not declared or
paid any dividends or made any distribution of their properties or assets to
shareholders, and (iii) Repap USA and the Subsidiaries have not entered into
any agreement to dispose of any of their assets or incurred any indebtedness
other than in the ordinary course of business.
3.6 Financial Statements; Disclosure Documents
Attached hereto as Schedule 3.6(a) is a copy of (a) the unaudited
consolidated balance sheet of Repap USA and the Subsidiaries as of December
31, 1996 and the consolidated statements of operations, stockholder's equity
and cash flows for the fiscal years ended December 31, 1995 and December 31,
1996 (collectively, with the notes thereto, the "Financial Information") and
(b) a copy of the unaudited consolidated balance sheet (the "Balance Sheet")
of Repap USA and the Subsidiaries as of June 30, 1997 and the related
consolidated statements of operations, stockholder's equity and cash flows
for the six months then ended (collectively, with the notes thereto, the
"Interim Financial Information"). The Financial Information and the Interim
Financial Information (together, the "Financial Statements") have been
prepared in accordance with GAAP (except as may be noted therein) and present
fairly, in all material respects, the consolidated financial position of
Repap USA and the Subsidiaries as of December 31, 1996 and June 30, 1997,
respectively, and the consolidated statements of operations, stockholder's
equity and cash flows of Repap USA and its Subsidiaries for the fiscal years
ended December 31, 1995 and December 31, 1996 and the six months ended
June 30, 1997, respectively, subject, in the case of the Interim Financial
Information, to normal year-end adjustments.
Repap Wisconsin has filed all required documents with the SEC since
February 2, 1994. As of their respective dates, Repap Wisconsin's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996, and
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997
(the "Disclosure Documents") complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be,
and, at the respective times they were filed, none of the Disclosure
Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements (including, in each case, any notes
there) of Repap Wisconsin included in the Disclosure Documents complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, were
prepared in accordance with GAAP (except, in the case of the unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a consistent
basis during the periods involved (except as may be indicated therein or in
the notes thereto) and fairly presented in all material respects the
financial position of Repap Wisconsin as at the respective dates thereof and
the results of its operations and its cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments and to any other adjustments described therein). Except as
disclosed in the Disclosure Documents or as required by GAAP, each of Repap
USA and Repap Wisconsin has not, since December 31, 1996, made any change in
the accounting practices or policies applied in the preparation of financial
statements.
3.7 Absence of Undisclosed Liabilities
Except as reflected in the Financial Statements of Repap USA and except
as set forth in the Disclosure Documents, neither Repap USA nor any of the
Subsidiaries has any liabilities or obligations of any nature, whether
absolute or contingent, accrued or unaccrued, liquidated or unliquidated, due
or to become due, including any liability for Taxes (collectively,
"Liabilities"), which, either individually or in the aggregate, are material
to Repap USA and the Subsidiaries taken as a whole, in excess of the
Liabilities reflected or reserved against in the Financial Statements, except
those incurred in the ordinary course of business and consistent with past
practice since December 31, 1996.
3.8 No Conflict
Subject to the receipt of the regulatory approvals referred to in this
Agreement or the approvals set forth on Schedule 3.4 and Schedule 3.8, the
execution and delivery of this Agreement by Repap does not, and the
performance of this Agreement by Repap and the consummation by it of the
transactions contemplated by this Agreement shall not:
(a) conflict with or violate the articles or by-laws or equivalent
organizational documents of Repap, Repap USA or any of the
Subsidiaries;
(b) conflict with or violate any law, rule, regulation, permit, order,
judgment or decree applicable to Repap, Repap USA or any of the
Subsidiaries or by which any of their respective properties is
bound or affected, the conflict with which or violation of which
would have a Material Adverse Effect or would prohibit or
materially delay Repap's ability to perform its obligations under
this Agreement; or
(c) result in any breach of or constitute a default (or an event which
with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of an
Encumbrance on any of the properties or assets of Repap, Repap USA
or any of the Subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise
or other instrument or obligation to which Repap, Repap USA or any
of the Subsidiaries is a party or by which Repap, Repap USA or any
of the Subsidiaries or any of their respective properties is bound
or affected, which, in any such case, would have a Material Adverse
Effect or would prohibit or materially delay Repap's ability to
perform its obligations under this Agreement.
3.9 Compliance
Except as disclosed in the Disclosure Documents or as otherwise
disclosed herein and in Schedule 3.9 and except for any conflicts, defaults
or violations which would not, individually or in the aggregate (taking into
account the impact of any cross-defaults), have a Material Adverse Effect,
neither Repap USA nor any of the Subsidiaries is in conflict with, or in
default (including cross-defaults) or violation of, (i) its articles or
by-laws or equivalent organizational documents, (ii) any law, rule,
regulation, order, permit, judgment or decree applicable to Repap USA or any
of the Subsidiaries or by which any one of their respective properties is
bound or affected or (iii) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which Repap USA or any of the Subsidiaries is a party or by
which Repap USA or any of the Subsidiaries or any of their respective
properties is bound or affected.
3.10 Litigation
Except as disclosed in the Disclosure Documents or Schedule 3.10, there
are no claims, actions, proceedings, suits, investigations or reviews pending
or, to the Knowledge of Repap, threatened in writing against Repap USA or any
of the Subsidiaries or any of their properties before any court, arbitrator
or administrative, governmental or regulatory authority or body, domestic or
foreign, that, individually or in the aggregate, would have a Material
Adverse Effect. As at the date hereof, neither Repap USA nor any of the
Subsidiaries nor any of their properties is subject to any judgment, order or
decree which has or will have a Material Adverse Effect, except as disclosed
in the Disclosure Documents or Schedule 3.10.
3.11 Labor and Employment Relations
Except as disclosed in the Disclosure Documents or in writing by Repap,
neither Repap USA nor any of the Subsidiaries is a party to any written
agreement or arrangement providing for severance or termination payments or
any compensation in excess of $25,000 to any director, officer or employee as
a result of the transactions contemplated by this Agreement or any written
employment agreement with any of its directors, officers and employees.
Except as disclosed in writing by Repap, neither Repap USA nor any Subsidiary
is a party to or bound by any material labor agreement or collective
bargaining agreement respecting its employees, nor is there pending, or to
the Knowledge of Repap threatened, any strike, walkout or other work stoppage
or any union organizing effort by or respecting the employees.
Except as disclosed in writing by Repap, Repap does not have any pending
complaint filed with the National Labor Relations Board or any other
governmental agency alleging unfair labor practices, human rights violations,
employment discrimination charges, or the like against Repap USA or any of
the Subsidiaries which would have a Material Adverse Effect and, to the
Knowledge of Repap, there are no existing facts which might result in any
such complaint or charge. Each of Repap USA and each Subsidiary has complied
in all material respects with all laws, rules and regulations relating to the
employment of labor, including provisions related to wages, hours, equal
opportunity, occupational health and safety, collective bargaining and the
payment of social security and other employment taxes. There are no
controversies pending or, to the Knowledge of Repap, threatened, involving
any group of employees, except individual grievances under any collective
bargaining agreement which, in the aggregate, are not material.
3.12 Benefit Plans
(a) Except as disclosed in Schedule 3.12, (i) there are no pension,
retirement, profit sharing, bonus, savings, deferred compensation,
stock option, purchase or appreciation, group insurance or other
employee benefit plans, programs or arrangements or fringe
benefits maintained or contributed to by Repap USA or any of the
Subsidiaries (each such plan, program or arrangement, a "Plan"),
(ii) there are no actions, claims, or other proceedings pending or,
to the Knowledge of Repap, threatened with respect to the Plans,
(iii) no promise or commitment to increase benefits under the Plans
has been made except as required by law, (iv) no event has occurred
which could subject any person or fund to any tax or penalty in
connection with the Plans, where the effect of such action or
failure to comply under (ii) through (iv) above would, individually
or in the aggregate, have a Material Adverse Effect. Repap has
provided Buyer with complete and accurate copies of all the Plans.
(b) Except as disclosed in the Disclosure Documents or in Schedule
3.12, none of the Plans is subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). With respect to
each Plan that is subject to ERISA (an "ERISA Plan") and, to the
extent specified, any ERISA Affiliate Plan (i) if such ERISA Plan
is intended to be qualified under Section 401(a) of the Code, such
ERISA Plan has been determined by the IRS to be so qualified or a
determination letter request will be filed for such Plan within the
remedial amendment period for such Plan; (ii) such ERISA Plan has
complied (in form and in operation) in all material respects with
ERISA, and all other applicable laws; (iii) no accumulated funding
deficiency, as defined in Section 302 of ERISA and Section 412 of
the Code, whether or not waived, exists with respect to such Plan
or any ERISA Affiliate Plan; (iv) with respect to each single
employer ERISA Plan and ERISA Affiliate Plan subject to Title IV of
ERISA, as of the last day of the most recent plan year ended prior
to the date hereof, the actuarially determined present value of all
"benefit liabilities" (as defined under Section 4001(a)(16) of
ERISA) under such Plan, determined on the basis of the actuarial
assumptions in effect for such plan year, did not exceed the then
current value of the assets of such Plan; and (v) none of Repap
USA, the Subsidiaries or any ERISA Affiliate has incurred or
expects to incur any liability to the United States Pension Benefit
Guaranty Corporation or any withdrawal liability under Title IV of
ERISA with respect to any "Multiemployer Plan" (as defined below),
where the effect of such event, condition, action or failure to act
under (i) through (v) above would be reasonably expected to have a
Material Adverse Effect. Except as disclosed in the Disclosure
Documents or in Schedule 3.12, neither Repap USA nor any Subsidiary
maintains or contributes to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) which is subject to ERISA and
which provides medical benefits to employees after termination of
employment other than as required by Section 601 of ERISA or other
applicable law.
(c) Neither Repap, Repap USA nor any ERISA Affiliate maintains or
contributes to any defined benefit pension plan subject to the
funding requirements of Section 412 of the Code, or covered under
Section 4021(a) of ERISA.
For purposes of the preceding paragraphs, "ERISA Affiliate" means
(a) any corporation which is a member of the same controlled group of
corporations, within the meaning of Section 414(b) of the Code, as Repap USA
or any of the Subsidiaries, or (b) any partnership or trade or business
(whether or not incorporated) under common control, within the meaning of
Section 414(c) of the Code, with Repap USA or any of the Subsidiaries; and
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
defined in Section 4001(a)(3) of ERISA). "ERISA Affiliate Plan" means any
single employer plan subject to Title IV or Section 302 of ERISA maintained
or contributed to by an ERISA Affiliate.
3.13 Property
Each of Repap USA and the Subsidiaries has good title to all of its
respective properties and assets (real and personal, tangible and intangible,
including leasehold interests) including all the properties and assets
reflected in the balance sheets forming part of the Financial Statements of
Repap USA, except as indicated in the notes thereto, together with all
additions thereto and less all dispositions thereof in the ordinary course of
its businesses, in each case subject to no Encumbrance except for
Permitted Encumbrances and as is reflected in the balance sheets forming part
of the Financial Statements of Repap USA, except where the failure to have
such title, individually or in the aggregate, would not be reasonably likely
to have a Material Adverse Effect. To the Knowledge of Repap, it is not
aware of any need to make any material changes or modifications to any
equipment necessary to enable the Business to continue as it has in the past.
3.14 Tax Matters
Except as reflected in the Financial Statements or Disclosure Documents
or as would not be reasonably likely to have a Material Adverse Effect, (i)
to the Knowledge of Repap, all Tax Returns required to be filed prior to the
Closing Date with respect to Repap USA and the Subsidiaries have been duly
filed, (ii) to the Knowledge of Repap, all such Returns are correct and
complete, (iii) all Taxes shown to be due on such Tax Returns have been paid
in full, (iv) no deficiencies for any Taxes with respect to such Tax Returns
have been asserted, (v) to the Knowledge of Repap, no other Taxes are payable
by Repap USA and the Subsidiaries with respect to items or periods covered by
such Tax Returns (whether or not shown or reportable on such Tax Returns),
(vi) no waivers of statutes of limitation have been given or requested with
respect to any Taxes with respect to such Tax Returns, (vii) there are no
audits in process, pending or threatened with respect to such Tax Returns,
(viii) to the Knowledge of Repap, Repap USA and the Subsidiaries have with-
held and paid over all Taxes required to have been withheld and paid over,
and complied with all information reporting and backup withholding
requirements, and (ix) there are no liens on any of the assets of Repap USA
with respect to Taxes, other than liens for Taxes not yet due and payable or
for Taxes that are contesting in good faith through appropriate proceedings
and for which appropriate reserves have been established.
3.15 Contracts
Except as set forth in the Disclosure Documents or the Financial
Statements or Schedule 3.15 and except for contracts entered into by Buyer or
caused by Buyer to be entered into by Repap USA or any Subsidiary in
connection with this Agreement and the transactions contemplated hereby,
neither Repap USA nor any Subsidiary is a party to, or bound by, any contract
of any kind which is to be performed or as to which Repap USA or any
Subsidiary may have any right or obligation after the Closing Date other than
contracts (i) which have been entered into in the ordinary and usual course
of business consistent with past practice and (ii) pursuant to which Repap
USA or the Subsidiary, as the case may be, is or would be obligated to
expend, or entitled to receive, less than $250,000 in any 12-month period or
which is subject to cancellation by Repap USA or the Subsidiary, as the case
may be, upon less than three (3) months' notice, without incurring any
expenditure and without penalty or increased cost. All contracts to which
Repap USA or any Subsidiary is a party constitute valid and binding
obligations of Repap USA or any Subsidiary, as the case may be, enforceable
against Repap USA or any Subsidiary, as the case may be, in accordance with
their respective terms (subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles) and in full force and effect, except for such contracts
the invalidity or unenforceability of which alone or in the aggregate would
not be reasonably likely to have a Material Adverse Effect. Except as set
forth in Schedule 3.9, there is not any pending or, to the Knowledge of
Repap, threatened cancellation, existing default, or event under any such
contract which, after notice or lapse of time, or both, would constitute a
default, except for such pending or threatened cancellations, existing
defaults or events which, alone or in the aggregate, would not be reasonably
likely to have a Material Adverse Effect.
3.16 Licenses, etc.
Repap USA and each Subsidiary owns, possesses, or has obtained and is in
compliance with, all governmental licenses, permits, certificates, consents,
orders, grants and other authorizations (the "Licenses and Permits")
necessary to conduct its Businesses as now conducted, the failure to own,
possess, obtain or be in compliance with which would have a Material Adverse
Effect, all of which are listed on Schedule 3.16. The Licenses and Permits
are valid and in full force and effect and there are not pending, or, to the
Knowledge of Repap, threatened, any proceedings which could result in the
termination, revocation, limitation or impairment of any License or Permit.
No violations have been recorded in respect of any Licenses and Permits, and
to the Knowledge of Repap there is no meritorious basis for any such
recordation.
3.17 Environmental Matters
Except as disclosed in the Disclosure Documents or in Schedule 3.17, or
as would not have a Material Adverse Effect, each of Repap USA and the
Subsidiaries: (i) is in substantial compliance with applicable Environmental
Laws; (ii) has not received any written notices from any governmental entity
alleging the violation of, or any claim or liability under, any applicable
Environmental Law; (iii) is not the subject of any court order,
administrative order or decree arising under any Environmental Law; (iv) has
obtained all environmental permits which are required in order to carry on
their respective Businesses and operations as presently conducted under all
applicable Environmental Laws, where noncompliance or failure to obtain the
same would have, individually or in the aggregate, a Material Adverse Effect;
(v) is not a subject to any compliance schedules or other limitations in such
environmental permits, other than permit expiration dates, which will become
effective in the future and which will restrict or prevent operation of the
Businesses as presently conducted; and (vi) has not to the best Knowledge of
Repap spilled, released, disposed of or discharged any hazardous substances
onto property currently or previously owned by Repap USA or the Subsidiaries
which spill, release, disposal or discharge has not been previously
remediated to the extent required under the applicable Environmental Laws.
Neither Repap USA nor the Subsidiaries has at any time given any written
undertakings with respect to remedying any breach of Environmental Laws which
have not been duly performed in accordance with the terms of such
undertakings, which breach would have a Material Adverse Effect. Except as
disclosed in the Disclosure Documents or in Schedule 3.17, to the best of
Knowledge of Repap no condition or environmental contamination exists on the
property owned by Repap USA or the Subsidiaries which would cause or require
Repap USA or its Subsidiaries to investigate and/or take remedial actions
under any applicable Environmental Laws to address such conditions of
contamination. Schedule 3.17(a) sets forth all treatment, storage or
disposal facilities utilized by Repap USA or the Subsidiaries for the
treatment, storage or disposal of any hazardous substances generated by the
operations or activities of Repap USA or the Subsidiaries.
3.18 Brokers and Finders
Other than Dillon, Read & Co. Inc. and TD Securities Inc., Repap, Repap
USA and the Subsidiaries have not employed any broker, finder, consultant or
intermediary in connection with the transactions contemplated by this
Agreement who would be entitled to a broker's, finder's or similar fee or
commission in connection therewith or upon the consummation thereof, or if
the Closing does not occur. Repap agrees to bear all costs it incurs,
including fees and expenses of Dillon, Read & Co. Inc. and TD Securities
Inc., in connection with the transactions contemplated by this Agreement
unless otherwise expressly provided herein and Repap USA and the Subsidiaries
shall not have any liability with respect to Dillon, Read & Co. Inc. and TD
Securities Inc.
3.19 Books and Records
The corporate records and minute books of Repap USA and the Subsidiaries
have been and are maintained in all material respects in accordance with
applicable laws.
3.20 Transactions with Affiliates
Since December 31, 1996, there has not been any dividend or other
distribution of assets by Repap USA or any Subsidiary. Except as set forth
in Schedule 3.20, no Repap Affiliate:
(a) owns, directly or indirectly, any debt, equity or other interest or
investment in any corporation, association or other entity which is
a competitor, lessor, lessee, customer, supplier, distribution
sales agent or advertiser of Repap USA or any Subsidiary;
(b) has any cause of action or other claim whatsoever against or owes
any material amount to, or is owed any material amount by, Repap
USA or any Subsidiary, except for accrued vacation pay, employee
benefits and similar matters and except for those claims arising
from existing contracts in the ordinary course of business;
(c) has any interest in or owns any property or right used in the
conduct of the Businesses of Repap USA or any of the Subsidiaries
except for those interests arising in the ordinary course of
business;
(d) has lent or advanced any money to, or borrowed any money from, or
guaranteed or otherwise become liable for any indebtedness or other
obligations of, or acquired any capital stock, obligations or
securities of, any Subsidiary except for such transactions arising
in the ordinary course of business;
(e) is a party to any contract, lease, agreement, arrangement or
commitment used in the Business except for such transactions
arising in the ordinary course of business; or
(f) received from or furnished to the Business any goods or services
(with or without consideration) since December 31, 1996 except for
such transactions arising in the ordinary course of business.
The term "Repap Affiliate" shall mean any officer, director or stockholder of
Repap, or any of the Repap USA Group or any corporation (other than WWF),
partnership, trust or other entity in which Repap, or any of the Repap USA
Group or any such officer, director or stockholder has a five percent (5%) or
greater interest or is a director, officer, partner or trustee. The term
Repap Affiliate shall also include any entity which controls, or is
controlled by, or is under common control with any of the individuals or
entities described in the preceding sentence.
3.21 Inventory
All inventories reflected on the Financial Statements are, and on the
Statement of Consolidated Net Working Capital will be, in all material
respects, (a) properly valued at the lower of cost or market value on a
first-in, first-out basis (or, in the case of work-in-process and finished
goods, on an average cost basis) in accordance with GAAP; (b) of good and
merchantable quality and contain no material amounts, except for job-lot that
are produced in the ordinary course of business, that are not salable and
usable for the purposes intended in the ordinary course of business and meet
the current standards and specifications of the Businesses of Repap USA and
the Subsidiaries; (c) in conformity with warranties customarily given to
purchasers of like products; and (d) at levels adequate and not excessive in
relation to the circumstances of the Businesses of Repap USA and the
Subsidiaries and in accordance with past inventory stocking practices. All
inventories disposed of subsequent to December 31, 1996, except for such
dispositions that do not have a material effect on Repap USA, have been
disposed of only in the ordinary course of business and at prices and under
terms that are normal and consistent with past practice.
3.22 Insurance
Schedule 3.22 sets forth an accurate, correct and complete list and
summary description (including the name of the insurer, coverage, premium and
expiration date) of all binders, policies of insurance, sell insurance
programs or fidelity bonds ("Insurance") maintained by Repap USA or a
Subsidiary or in which Repap USA or a Subsidiary is a named insured. All
Insurance has been issued by financially sound insurance companies under
valid and enforceable policies or binders for the benefit of Repap USA or a
Subsidiary, and all such policies or binders are in such types and in full
force and effect and are in amounts and for risks, casualties and
contingencies customarily insured against by enterprises in operations
similar to the Businesses of Repap USA and the Subsidiaries. There are no
pending or asserted claims against any Insurance as to which any insurer has
denied liability, and there are no claims under any Insurance that have been
disallowed or improperly filed. Schedule 3.22 sets forth the claims
experience for the last two full fiscal years and the interim period through
the date hereof with respect to Repap USA and the Subsidiaries (both insured
and self-insured). No notice of cancellation or nonrenewal with respect to,
or material increase of premium for, any insurance has been received by Repap
USA or any Subsidiary. Repap has no Knowledge of any facts or the occurrence
of any event which (i) reasonably might form the basis of any claim against
Repap USA or any Subsidiary relating to the conduct or operations of their
Business and which will materially increase the insurance premiums payable
under any insurance or (ii) otherwise will materially increase the insurance
premiums payable under any insurance.
3.23 Customers and Suppliers
(a) All sales contracts and orders with customers and suppliers were
entered into by or on behalf of Repap USA or any Subsidiary and were entered
into in the ordinary course of business for usual quantities and at normal
prices. Schedule 3.23 sets forth an accurate, correct and complete list of
the ten largest customers and ten largest suppliers of Repap USA and of each
Subsidiary, determined on the basis of revenues from items sold (with respect
to customers) or costs of items purchased (with respect to suppliers) for
each of the fiscal year ended December 31, 1996 and the six-month period
ended June 30, 1997. To the Knowledge of Repap, no customer or supplier will
cease to do business with Repap USA or any Subsidiary after, or as a result
of, the consummation of any transactions contemplated hereby or that any
customer or supplier is threatened with bankruptcy or insolvency in any
manner that will reasonably likely have a Material Adverse Effect. Neither
Repap, Repap USA nor any of the Subsidiaries knows of any fact, condition or
event which would adversely affect its relationship with any customer or
supplier in any manner that will reasonably likely have a Material Adverse
Effect. Since December 31, 1996, there has been no cancellation of
backlogged orders in material excess of the average rate of cancellation
prior to such date.
(b) Neither Repap USA, any Subsidiary, nor any of their officers or
employees, has, directly or indirectly, given or agreed to give any rebate,
gift or similar benefit to any supplier, customer, distributor, broker,
governmental employee or other Person, who was, is or may be in a position to
help or hinder the Business (or assist in connection with any actual or
proposed transaction) which could subject Repap USA or any Subsidiary or
Buyer to any damage or penalty in any civil, criminal or governmental
litigation or proceeding or which would have a Material Adverse Effect.
(c) Except as set forth on Schedule 3.23, (i) no Person within the last
twelve months has threatened in writing to cancel or otherwise terminate, or
to the Knowledge of Repap has threatened orally to cancel or otherwise ter-
minate, the relationship of such Person with Repap USA and each Subsidiary in
any manner that will reasonably likely have a Material Adverse Effect, and
(ii) no Person during the last twelve months has decreased materially or
threatened in writing to decrease or limit materially, or, to the Knowledge
of Repap, intends to decrease or limit materially, its supplies to Repap USA
or any Subsidiary or its purchase of Repap USA's or any Subsidiary's products
or services. Except as set forth on Schedule 3.23, there is no material
purchase commitment which provides that any supplier will be the exclusive
supplier of Repap USA or any Subsidiary. There is no material purchase
commitment requiring Repap USA or any Subsidiary to purchase the entire
output of a supplier.
3.24 Real Estate
(a) Schedule 3.24 sets forth an accurate legal description of all real
estate owned by Repap USA or any Subsidiary or for which Repap USA or any
Subsidiary has contracted to become the owner (the "Owned Real Estate"),
including identification of the current owner of fee simple title thereto.
The party identified as the owner on Schedule 3.24 is the legal and equitable
owner of good and marketable title in fee simple absolute to such Owned Real
Estate, including the building, structures, spurtracks (as set forth on
Schedule 3.24) and improvements situated thereon and appurtenances thereto,
in each case free and clear of all tenancies and other possessory interests,
security interests, conditional sale or other title retention agreements,
liens, encumbrances, mortgages, pledges, assessments, easements, rights of
way, covenants, restrictions, reservations, options, rights of first refusal,
defects in title, encroachments and other burdens, except as disclosed on
Schedule 3.24. Except as disclosed on Schedule 3.24, Repap USA and the
Subsidiaries are in possession of the Owned Real Estate. All contracts,
agreements, options and undertakings affecting the Owned Real Estate are set
forth in Schedule 3.24 and are legally valid and binding and in full force
and effect, and, to the Knowledge of Repap, there are no defaults, offsets,
counterclaims or defenses thereunder, and neither Repap USA nor any
Subsidiary has received any notice that any default, offset, counterclaim or
defenses thereunder exists. Repap has delivered or made available to Buyer
correct and complete copies of all such contracts, agreements, options and
undertakings, as well as copies of title commitments dated no less than one
month prior to the date hereof.
(b) Schedule 3.24 sets forth an accurate, correct and complete list of
all real estate leased, subleased or occupied by Repap USA or any Subsidiary
(such interests are the "Leased Real Estate" and, collectively with the Owned
Real Estate, are the "Real Estate"), including identification of the lease or
sublease (each a "Real Estate Lease") and the parties thereto and list of
contracts, agreements, leases, subleases, options and commitments, oral or
written, affecting such Leased Real Estate or any interest therein to which
Repap USA or any Subsidiary is a party or by which any of its interest in the
Leased Real Estate is bound. Repap USA or any Subsidiary has been in
peaceable possession of the Leased Real Estate since the commencement of the
original term of such Real Estate Lease. Repap has delivered to Buyer
correct and complete copies of each Real Estate Lease.
(c) To the Knowledge of Repap, no Real Estate is located within a flood
or lakeshore erosion hazard zone for which flood insurance is now required
under the National Flood Insurance Program. Neither the whole nor any
portion of any Real Estate has been condemned, requisitioned or otherwise
taken by any public authority, and no notice of any such condemnation,
requisition or taking has been received. To the Knowledge of Repap, no such
condemnation, requisition or taking is threatened or contemplated. Repap has
no Knowledge of any public improvements which may result in any material
special assessments against or otherwise affect the Real Estate in any
material way.
(d) To the Knowledge of Repap, except as set forth on Schedule 3.17 or
3.24, the Real Estate is in material compliance with all applicable zoning,
building, health, fire, water, use or similar statutes, codes, ordinances,
laws, rules or regulations. To the Knowledge of Repap, the zoning of each
parcel of Real Estate permits the existing improvements and the continuation
following consummation of the transaction contemplated hereby of the Business
of Repap USA and the Subsidiaries as presently conducted thereon. Repap USA
and the Subsidiaries have all certificates of occupancy and authorizations
required to utilize the Real Estate. To the Knowledge of Repap, Repap USA
and the Subsidiaries have all easements and rights necessary to conduct their
Businesses, including easements for all utilities, services, roadway, railway
and other means of ingress and egress. To the Knowledge of Repap, Repap USA
and the Subsidiaries hold such rights to off-site facilities as are necessary
to ensure compliance in all material respects with all zoning, building,
health, fire, water, use or similar statutes, codes, ordinances, laws, rules
or regulations and all such rights, to the extent held by Repap, shall be
conveyed as directed by Buyer at Closing. Except as disclosed on Schedule
3.24, to the Knowledge of Repap, no fact or condition exists which would
result in the termination or impairment of access to the Real Estate or
discontinuation of sewer, water, electric, gas, telephone, waste disposal or
other utilities or services in any manner that will reasonably likely have a
Material Adverse Effect. Except as disclosed on Schedule 3.24, to the
Knowledge of Repap, the facilities servicing the Real Estate are in material
compliance with all codes, laws, rules and regulations.
(e) Repap has delivered or made available to Buyer accurate, correct
and complete copies of all existing title insurance policies, title reports,
surveys and environmental audits and similar reports, if any, with respect to
each parcel of Real Estate.
3.25 Plant and Equipment
To the best Knowledge of Repap, all plant, structures and equipment
currently being used in the conduct of its operations are free from material
structural or mechanical deficiencies.
3.26 Bank Accounts
Schedule 3.26 sets forth a true and complete list of all banks in which
Repap USA and the Subsidiaries have an account, safe deposit box, lock box or
line of credit, and the names and titles of all persons authorized to draw
thereon or to have access thereto, and a summary description of the use
thereof.
3.27 Accounts Receivable
Schedule 3.27 sets forth an accurate, correct and complete aging of all
outstanding accounts and notes receivable of each of Repap USA and the
Subsidiaries as of December 31, 1996. All outstanding accounts and notes
receivable reflected on the Financial Statements are due and valid claims
against account debtors for goods or services delivered or rendered and
subject to no defenses, offsets or counterclaims other than in the ordinary
course of business. All receivables arose in the ordinary course of
business. No receivables are subject to prior assignment, claim, lien or
security interest. The books and records of Repap USA and the Subsidiaries
reflect amounts taken as a reserve against noncollection of accounts
receivable, which reserve has been established in accordance with normal
accounting policies consistently maintained and there is no reason to believe
that such reserve will not be adequate for its purpose. As of the Closing
Date, neither Repap USA nor any Subsidiary will have incurred any liabilities
to customers for discounts, returns, promotional allowances or otherwise,
except those granted in the ordinary course of business and reflected on the
Statement of Consolidated Net Working Capital.
3.28 Motor Vehicles
Schedule 3.28 sets forth an accurate and complete list of all motor
vehicles used in the Business of Repap USA and the Subsidiaries, whether
owned or leased. All such vehicles are (i) properly licensed and registered
in accordance with applicable law; (ii) insured as set forth on Schedule
3.28; (iii) in good operating condition and repair (reasonable wear and tear
excepted); and (iv) not subject to any lien or other encumbrance, except as
set forth on Schedule 3.28.
3.29 Product Warranty
The books and records of Repap USA and of the Subsidiaries reflect
amounts taken as a reserve against claims and allowances for product
warranties, which reserve has been established in accordance with normal
accounting policies and there is no reason for Repap or Repap USA to believe
that such reserve will not be adequate for its purpose. As of the Closing
Date, none of Repap USA or the Subsidiaries will have incurred any unpaid
liabilities to customers for such claims and allowances, except those granted
in the ordinary course of business.
3.30 Intellectual Property
Repap has furnished to Buyer an accurate list, as set forth in Schedule
3.30, of all patents, utility patents and design patents and registrations
therefor, trademarks, trade names, trademark rights and trademark
registrations, copyrights and licenses, owned or used by Repap USA, the
Subsidiaries and their Businesses. All of the foregoing, together with all
technical documentation reflecting engineering and production data, plans,
specifications, drawings, technology, know how, trade secrets, software
(whether owned or licensed), manufacturing processes and all documentary
evidence thereof relating to, are hereafter referred collectively as the
"Intellectual Property". The Intellectual Property constitutes in all
material respects all such assets, properties and rights which are used in or
necessary for the conduct of Businesses of Repap USA and the Subsidiaries.
To the Knowledge of Repap, no one is infringing upon any rights of Repap USA
or any Subsidiary, with respect to any of the Intellectual Property. To the
Knowledge of Repap, neither Repap USA nor any Subsidiary is infringing on or
otherwise acting adversely to the rights of any Person under, or in respect
to, any patents, patent rights, copyrights, licenses, trademarks, trade names
or trademark rights owned by any Person or Persons, and there is no claim or
action pending or threatened with respect thereto. Except as set forth in
Schedule 3.30, there are no royalty, commission or similar arrangements, and
no licenses, sublicenses or agreements pertaining to any of the Intellectual
Property.
3.31 No Other Representations or Warranties
Except for the representations and warranties contained in this Annex A,
neither Repap, Repap USA, the Subsidiaries nor any other Person makes any
other express or implied representation or warranty on behalf of Repap, Repap
USA or the Subsidiaries.
Annex B
4.1 Incorporation and Qualification
Buyer has been duly incorporated, is validly existing and is in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted and is duly
registered, licensed or qualified to carry on business in each jurisdiction
in which the nature of the business as now being conducted by it or the
property owned or leased by it makes such registration, licensing or
qualification necessary, unless the failure to be so registered or qualified
would not have a Material Adverse Effect on the business, assets, financial
condition or results of operations of Buyer and its subsidiaries, taken as a
whole.
4.2 Authority; Filings, Consents and Approvals
Buyer has the corporate power and authority to enter into this Agreement
and, subject to the receipt of the approvals, consents and authorizations
contemplated in this Agreement, to carry out the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered by
Buyer and constitutes a legal, valid and binding obligation of Buyer,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles, and no other proceedings on the part of Buyer are
necessary to authorize this Agreement and the consummation of the
transactions contemplated hereby.
Except as set forth in Schedule 4.2 or as required by the HSR Act or the
filing of appropriate notices with the relevant stock exchanges, material
change reports and press releases, the execution, delivery and performance of
this Agreement will not require Buyer or any of its subsidiaries to obtain
any consent, waiver, authorization or approval of, or make any filing with or
give notice to, any Person, except for such consents, waivers, authorizations
or approvals which the failure to obtain would not be reasonably likely to
have a material adverse effect on the business, assets, financial condition
or results of operations of Buyer and its subsidiaries, taken as a whole.
4.3 No Conflict
Subject to the receipt of the regulatory approvals referred to in this
Agreement or disclosed in writing to Repap, the execution and delivery of
this Agreement by Buyer does not, and the performance of this Agreement by
Buyer and the consummation by it of the transactions contemplated by this
Agreement shall not:
(a) conflict with or violate the articles or by-laws or equivalent
organizational documents of Buyer;
(b) conflict with or violate any law, rule, regulation, permit, order,
judgment or decree applicable to Buyer or its subsidiaries or by which any of
their respective properties is bound or affected, the conflict with which or
violation of which would have a material adverse effect on the business,
assets, financial condition or results of operations of Buyer and its
subsidiaries taken as a whole or would prohibit or materially delay Buyer's
ability to perform its obligations under this Agreement; or
(c) result in any breach of or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation
of, or result in the creation of an Encumbrance on any of the properties or
assets of Buyer or any of its subsidiaries pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise
or other instrument or obligation to which Buyer or any of its subsidiaries
is a party or by which Buyer or any of its subsidiaries or any of their
respective properties is bound or affected, which, in any such case, would
have a material adverse effect on the business, assets, financial condition
or results of operations of Buyer and its subsidiaries taken as a whole or
would prohibit or materially delay Buyer's ability to perform its obligations
under this Agreement.
4.4 Brokers and Finders
Other than Nesbitt Burns Inc., Buyer has not employed any broker,
finder, consultant or intermediary in connection with the transactions
contemplated by this Agreement who would be entitled to a broker's, finder's
or similar fee or commission in connection therewith or upon the consummation
thereof, or if the Closing does not occur. Buyer agrees to bear all costs it
incurs, including fees and expenses of Nesbitt Burns Inc., in connection with
the transactions contemplated by this Agreement unless otherwise expressly
provided herein.
4.5 Financial Capability
On the Closing Date, Buyer will have sufficient funds to purchase the
Shares on the terms and conditions contemplated by this Agreement.
4.6 Securities Act
Buyer is acquiring the Shares solely for the purpose of investment and
not with a view to, or for sale in connection with, any distribution thereof
in violation of the Securities Act. Buyer acknowledges that the Shares are
not registered under the Securities Act or any applicable state securities
law, and that such Shares may not be transferred or sold except pursuant to
the registration provisions of such Securities Act or pursuant to an
applicable exemption therefrom and pursuant to state securities laws and
regulations as applicable.
4.7 No Other Representations or Warranties
Except for the representations and warranties contained in this Annex B,
neither Buyer nor any other Person makes any other express or implied
representation or warranty on behalf of Buyer.
SCHEDULES TO
STOCK PURCHASE AGREEMENT
SCHEDULE
2.3 Debt and Capital Expenditures
3.1 Incorporation and Qualification
3.2 Capitalization
3.3 Subsidiaries
3.4 Authority; Filings, Consents and Approvals
3.5 Absence of Changes
3.6 Financial Statements; Disclosure Documents
3.7 Absence of Undisclosed Liabilities
3.8 No Conflict
3.9 Compliance
3.10 Litigation
3.11 Labor and Employment Relations
3.12 Benefit Plans
3.13 Property
3.14 Tax Matters
3.15 Contracts
3.16 Licenses, etc.
3.17 Environmental Matters
3.18 Brokers and Finders
3.19 Books and Records
3.20 Transactions with Affiliates
3.21 Inventory
3.22 Insurance
3.23 Customers and Suppliers
3.24 Real Estate
3.25 Plant and Equipment
3.26 Bank Accounts
3.27 Accounts Receivable
3.28 Motor Vehicles
3.29 Product Warranty
3.30 Intellectual Property
3.31 No Other Representations or Warranties
4.1 Incorporation and Qualification
4.2 Authority; Filings, Consents and Approvals
4.3 No Conflict
4.4 Brokers and Finders
4.5 Financial Capability
4.6 Securities Act
4.7 No Other Representations or Warranties
7.1 Opinions of Counsel for Repap
7.2 Opinion of McDermott, Will & Emery, counsel to the Buyer
$750,000,000
CREDIT AGREEMENT
dated as of
September 26, 1997
among
CONSOLIDATED PAPERS, INC.
The Banks Listed Herein
BANK OF MONTREAL
THE CHASE MANHATTAN BANK
CIBC INC.
DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
and
NATIONSBANK, N.A.,
as Co-Agents
and
WACHOVIA BANK, N.A.,
as Agent
TABLE OF CONTENTS
CREDIT AGREEMENT
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.02. Accounting Terms and Determinations . . . . . . . . . . . .
SECTION 1.03. Use of Defined Terms . . . . . . . . . . . . . . . . . . . .
SECTION 1.04. Terminology . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.05. References . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Make Syndicated Loans . . . . . . . . . . . .
SECTION 2.02. Method of Borrowing Syndicated Loans . . . . . . . . . . . .
SECTION 2.03. Money Market Loans . . . . . . . . . . . . . . . . . . . . .
SECTION 2.04. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.05. Maturity of Loans . . . . . . . . . . . . . . . . . . . . .
SECTION 2.06. Interest Rates . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.07. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.08. Optional Termination or Reduction of Commitments . . . . . .
SECTION 2.09. Mandatory Termination of Commitments . . . . . . . . . . . .
SECTION 2.10. Optional Prepayments . . . . . . . . . . . . . . . . . . . .
SECTION 2.11. Mandatory Prepayments . . . . . . . . . . . . . . . . . . .
SECTION 2.12. General Provisions as to Payments . . . . . . . . . . . . .
SECTION 2.13. Computation of Interest and Fees . . . . . . . . . . . . . .
ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. Conditions to First Borrowing . . . . . . . . . . . . . . .
SECTION 3.02. Conditions to All Borrowings . . . . . . . . . . . . . . . .
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power . . . . . . . . . . . . . . .
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.03. Binding Effect . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.04. Financial Information . . . . . . . . . . . . . . . . . . .
SECTION 4.05. Litigation . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.06. Compliance with ERISA . . . . . . . . . . . . . . . . . . .
SECTION 4.07. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.08. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.09. Not an Investment Company . . . . . . . . . . . . . . . . .
SECTION 4.10. Ownership of Property; Liens . . . . . . . . . . . . . . . .
SECTION 4.11. No Default . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.12. Full Disclosure . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.13. Environmental Matters . . . . . . . . . . . . . . . . . . .
SECTION 4.14. Compliance with Laws . . . . . . . . . . . . . . . . . . . .
SECTION 4.15. Transactions with Affiliates . . . . . . . . . . . . . . . .
ARTICLE V
COVENANTS
SECTION 5.01. Corporate Existence, etc. . . . . . . . . . . . . . . . . .
SECTION 5.02. Compliance with Laws; Payment of Taxes . . . . . . . . . . .
SECTION 5.03. Environmental Notices . . . . . . . . . . . . . . . . . . .
SECTION 5.04. Financial and Business Information . . . . . . . . . . . . .
SECTION 5.05. Inspection of Property, Books and Records . . . . . . . . .
SECTION 5.06. Insurance . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.07. Maintenance of Properties . . . . . . . . . . . . . . . . .
SECTION 5.08. Ratio of Consolidated Debt to Consolidated
Total Capitalization . . . . . . . . . . . . . . . . . . .
SECTION 5.09. Fixed Charges Coverage . . . . . . . . . . . . . . . . . . .
SECTION 5.10. Line of Business . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.11. Loans, Advances or Investments . . . . . . . . . . . . . . .
SECTION 5.12. Sale of Assets, etc. . . . . . . . . . . . . . . . . . . . .
SECTION 5.13. Merger, Consolidation, etc . . . . . . . . . . . . . . . . .
SECTION 5.14. Dissolution . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.15. Limitation on Priority Debt. . . . . . . . . . . . . . . . .
SECTION 5.16. Negative Pledge. . . . . . . . . . . . . . . . . . . . . .
SECTION 5.17. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . .
SECTION 6.02. Notice of Default . . . . . . . . . . . . . . . . . . . . .
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment, Powers and Immunities . . . . . . . . . . . . .
SECTION 7.02. Reliance by Agent . . . . . . . . . . . . . . . . . . . . .
SECTION 7.03. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.04. Rights of Agent and its Affiliates as a Bank . . . . . . . .
SECTION 7.05. Indemnification . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.06. CONSEQUENTIAL DAMAGES . . . . . . . . . . . . . . . . . . .
SECTION 7.07. Payee of Note Treated as Owner. . . . . . . . . . . . . . .
SECTION 7.08. Non-Reliance on Agent and Other Banks . . . . . . . . . . .
SECTION 7.09. Failure to Act . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.10. Resignation or Removal of Agent . . . . . . . . . . . . . .
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair . .
SECTION 8.02. Illegality . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 8.03. Increased Cost and Reduced Return . . . . . . . . . . . . .
SECTION 8.04. Base Rate Loans Substituted for Affected
Euro-Dollar Loans . . . . . . . . . . . . . . . . . . . .
SECTION 8.05. Compensation . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 9.02. No Waivers . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 9.03. Expenses; Documentary Taxes; Indemnification . . . . . . . .
SECTION 9.04. Setoffs; Sharing of Set-Offs . . . . . . . . . . . . . . . .
SECTION 9.05. Amendments and Waivers . . . . . . . . . . . . . . . . . . .
SECTION 9.06. Margin Stock Collateral . . . . . . . . . . . . . . . . . .
SECTION 9.07. Successors and Assigns . . . . . . . . . . . . . . . . . . .
SECTION 9.08. Confidentiality . . . . . . . . . . . . . . . . . . . . . .
SECTION 9.09. Representation by Banks . . . . . . . . . . . . . . . . . .
SECTION 9.10. Obligations Several . . . . . . . . . . . . . . . . . . . .
SECTION 9.11. Survival of Certain Obligations . . . . . . . . . . . . . .
SECTION 9.12. Georgia Law . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 9.13. Severability . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 9.14. Interest . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 9.15. Interpretation . . . . . . . . . . . . . . . . . . . . . . .
SECTION 9.16. Consent to Jurisdiction . . . . . . . . . . . . . . . . . .
SECTION 9.17. Counterparts . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 4.05 Description of Potential Litigation
SCHEDULE 4.13 Potentially Responsible Party Designation and Properties on
National Priorities List or CERCLIS List
EXHIBIT A-1 Form of Facility A Syndicated Note
EXHIBIT A-2 Form of Facility B Syndicated Note
EXHIBIT B-1 Form of Facility A Money Market Note
EXHIBIT B-2 Form of Facility B Money Market Note
EXHIBIT C Form of Opinion of Counsel for the Borrower
EXHIBIT D Form of Opinion of Special Counsel for the Agent
EXHIBIT E-1 Form of Facility A Money Market Quote Request
EXHIBIT E-2 Form of Facility B Money Market Quote Request
EXHIBIT F-1 Form of Facility A Money Market Quote
EXHIBIT F-2 Form of Facility B Money Market Quote
EXHIBIT G Form of Closing Certificate
EXHIBIT H Form of Secretary's Certificate
EXHIBIT I Form of Assignment and Acceptance
EXHIBIT J-1 Form of Facility A Notice of Borrowing
EXHIBIT J-2 Form of Facility B Notice of Borrowing
CREDIT AGREEMENT
AGREEMENT dated as of September 26, 1997 among CONSOLIDATED
PAPERS, INC., the BANKS listed on the signature pages hereof, BANK OF
MONTREAL, THE CHASE MANHATTAN BANK, CIBC INC., DEUTSCHE BANK AG, NEW YORK
BRANCH AND/OR CAYMAN ISLANDS BRANCH and NATIONSBANK, N.A., as Co-Agents,
and WACHOVIA BANK, N.A., as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in this
Section 1.01 shall, for all purposes of this Agreement and any amendment
hereto (except as herein otherwise expressly provided or unless the context
otherwise requires), have the meanings set forth herein:
"Acceptable Obligations" means and includes:
(a) commercial paper rated A-1 or the equivalent thereof by
Standard & Poor's or P-1 or the equivalent thereof by
Moody's and, in either case, maturing within one year after
the date of acquisition;
(b) tender bonds the payment of the principal of and interest on
which is fully supported by a letter of credit issued by a
United States bank whose long-term certificates of deposit
are rated at least AA or the equivalent thereof by Standard
& Poor's or Aa or the equivalent thereof by Moody's;
(c) direct obligations of the United States of America;
(d) obligations issued or unconditionally guaranteed by a state
or municipality having a rating of AA or better from
Standard & Poor's or Aa or better from Moody's; and
(e) obligations of a corporation having a rating of AA or better
from Standard & Poor's or Aa or better from Moody's.
"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.06(c).
"Affiliate" means, at any time, and with respect to any Person,
any other Person that at such time directly or indirectly through one or
more intermediaries Controls, or is Controlled by, or is under common
Control with, such first Person. As used in this definition, "Control"
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an
"Affiliate" is a reference to an Affiliate of the Borrower.
"Agent" means Wachovia Bank, N.A., a national banking association
organized under the laws of the United States of America, in its capacity
as agent for the Banks hereunder, and its successors and permitted assigns
in such capacity.
"Agent's Letter Agreement" means that certain letter agreement,
dated August 1, 1997, between the Borrower and the Agent relating to the
structure of the Loans, and certain fees from time to time payable by the
Borrower to the Agent, together with all amendments and modifications
thereto.
"Agreement" means this Credit Agreement, together with all
amendments and supplements hereto.
"Applicable Facility Fee Rate" has the meaning set forth in
Section 2.07(a).
"Applicable Margin" has the meaning set forth in Section 2.06(a).
"Assignee" has the meaning set forth in Section 9.07(c).
"Assignment and Acceptance" means an Assignment and Acceptance
executed in accordance with Section 9.07(c) in the form attached hereto as
Exhibit I.
"Authority" has the meaning set forth in Section 8.02.
"Bank" means each bank listed on the signature pages hereof as
having a Commitment, and its successors and assigns.
"Base Rate" means for any Base Rate Loan for any day, the rate
per annum equal to the higher as of such day of (i) the Prime Rate, and
(ii) one-half of one percent above the Federal Funds Rate for such day.
For purposes of determining the Base Rate for any day, changes in the Prime
Rate and the Federal Funds Rate shall be effective on the date of each such
change.
"Base Rate Loan" means a loan made by a Bank under this Agreement
which bears or is to bear interest at a rate based upon the Base Rate.
"Borrower" means Consolidated Papers, Inc., a Wisconsin
corporation, and its successors and permitted assigns.
"Borrowing" means a borrowing hereunder consisting of Loans made
to the Borrower at the same time by, in the case of a Syndicated Borrowing,
the Banks, or, in the case of a Money Market Borrowing, one or more of the
Banks, in each case pursuant to Article II. A Borrowing is a "Facility A
Borrowing" if such Loans are Facility A Loans and a "Facility B Borrowing"
if such Loans are Facility B Loans. A Borrowing is a "Syndicated
Borrowing" if such Loans are Syndicated Loans or a "Money Market Borrowing"
if such Loans are Money Market Loans. A Borrowing is a "Facility A
Syndicated Borrowing" if such Syndicated Loans are Facility A Syndicated
Loans, a "Facility B Syndicated Borrowing" if such Syndicated Loans are
Facility B Syndicated Loans, a "Facility A Money Market Borrowing" if such
Money Market Loans are Facility A Money Market Loans or a "Facility B Money
Market Borrowing" is such Money Market Loans are Facility B Money Market
Loans. A Borrowing is a "Base Rate Borrowing" if such Loans are Base Rate
Loans or a "Euro-Dollar Borrowing" if such Loans are Euro-Dollar Loans.
"Capital Lease" means, at any time, a lease with respect to which
the lessee is required concurrently to recognize the acquisition of an
asset and the incurrence of a liability in accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Person and
a Capital Lease, the amount of the obligation of such Person as the lessee
under such Capital Lease which would, in accordance with GAAP, appear as a
liability on a balance sheet of such Person.
"Cash Collateral" means, at all time, all cash and cash
equivalent of the Deposit Subsidiary held in deposit accounts and subject
to Liens granted by the Deposit Subsidiary to secure directly or indirectly
all rental and other obligations of CPIL required to be paid by CPIL, as
lessee, under the Cross-Border Leases, as amended from time to time, so
long as such cash and cash equivalents do not secure, and are not available
to satisfy, any claims of any creditor of the Borrower or any Subsidiary of
the Borrower other than claims of the respective deposit bank arising from
the related deposit arrangements, claims of Abbey National Treasury
Services, PLC (or an affiliate thereof) as the issuer of any stand-by
letter of credit issued for the account of the Deposit Subsidiary and for
the benefit of the lessors under the Cross-Border Leases and claims of the
lessors under the Cross-Border Leases.
"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act, as amended.
"CERCLIS" means the Comprehensive Environmental Response
Compensation and Liability Information System established pursuant to
CERCLA.
"Change of Law" shall have the meaning set forth in Section 8.02.
"Closing Certificate" has the meaning set forth in Section
3.01(e).
"Closing Date" means September 26, 1997.
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor Federal tax code. Any reference to any provision of the Code
shall also include the income tax regulations promulgated thereunder,
whether final, temporary or proposed.
"Commitment" means a Facility A Commitment or a Facility B
Commitment and "Commitments" shall mean, collectively, the Facility A
Commitments and the Facility B Commitments.
"Consolidated Assets" means the total assets of the Borrower and
its Consolidated Subsidiaries which would be shown as assets on a
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries prepared in accordance with GAAP, after eliminating all
amounts properly attributable to minority interests, if any, in the stock
and surplus of Consolidated Subsidiaries.
"Consolidated Debt" means, as of any date of determination, the
total of all Debt (other than the Cross-Border Lease Debt) of the Borrower
and its Consolidated Subsidiaries outstanding on such date, after
eliminating all offsetting debits and credits between the Borrower and its
Consolidated Subsidiaries and all other items required to be eliminated in
the course of the preparation of consolidated financial statements of the
Borrower and its Consolidated Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charges" for any period means the sum of (i)
Consolidated Interest Expense for such period, and (ii) Lease Rentals for
such period.
"Consolidated Interest Expense" for any period means interest,
whether expensed or capitalized, in respect of Debt of the Borrower or any
of its Consolidated Subsidiaries outstanding during such period.
"Consolidated Net Earnings" for any period, means the net income
(or loss) of the Borrower and its Consolidated Subsidiaries for such period
(taken as a cumulative whole), as determined in accordance with GAAP, after
eliminating all offsetting debits and credits between the Borrower and its
Consolidated Subsidiaries and all other items required to be eliminated in
the course of the preparation of consolidated financial statements of the
Borrower and its Consolidated Subsidiaries in accordance with GAAP, and,
without limiting the foregoing, after deduction from gross income of all
charges and reserves, including charges and reserves for all taxes on or
measured by income, but excluding any profits or losses on the sale or
other disposition not in the ordinary course of business of fixed or
capital assets or on the acquisition, retirement, sale or other disposition
of stock or other Securities of the Borrower and its Consolidated
Subsidiaries, and also excluding taxes on such profits and any tax
deductions or credits on account of any such losses.
"Consolidated Net Worth" means, at any time,
(a) Consolidated Assets, minus
(b) the total liabilities of the Borrower and its Consolidated
Subsidiaries which would be shown as liabilities on a
consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of such time prepared in
accordance with GAAP.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which, in accordance with generally accepted
accounting principles consistently applied, would be consolidated with
those of the Borrower in its consolidated financial statements as of such
date.
"Consolidated Total Capitalization" means, at any time, the sum
of Consolidated Net Worth at such time and Consolidated Debt at such time.
"CPIL" means Consolidated Papers International Leasing, LLC, a
limited liability company organized under the laws of Delaware, and named
as lessee under the Cross-Border Leases.
"Cross-Border Leases" means each of (i) those certain Lease
Agreements, each dated as of May 15, 1996, by and between CPIL, as lessee,
and an affiliate of National Westminster Bank PLC, as lessor, (ii) those
certain Lease Agreements, each dated as of May 15, 1996, by and between
CPIL, as lessee, and an affiliate of Abbey National Treasury Services PLC,
as lessor, (iii) that certain Lease Agreement, dated as of September 26,
1996, by and between CPIL, as lessee, and an affiliate of National
Westminster Bank PLC, as lessor (the "September 1996 L/C Lease") and (iv)
that certain Lease Agreement, dated as of September 26, 1996, by and
between CPIL, as lessee, and an affiliate of Abbey National Treasury
Services, PLC, as lessor (the "September 1996 Cash Lease"), in each case
as amended from time to time. Each of the "Cross-Border Leases" is herein
individually referred to as a "Cross-Border Lease".
"Cross-Border Lease Debt" means, at any time, that portion of the
aggregate Debt incurred by the Borrower and/or its Subsidiaries in respect
of the obligations of the lessee under the Cross-Border Leases up to an
aggregate amount equal to the sum of
(i) the lesser of (a) the then outstanding amount of Cash
Collateral in respect of (and securing lessee's obligations under) the
May 1996 Cross-Border Leases, or (b) Three Hundred Eight Million
Dollars ($308,000,000), plus
(ii) the lesser of (a) the then outstanding amount of Cash
Collateral in respect of (and securing lessee's obligations under) the
September 1996 L/C Lease, or (b) One Hundred Sixteen Million Dollars
($116,000,000), plus
(iii) the lesser of (a) the then outstanding amount of Cash
Collateral in respect of (and securing lessee's obligations under) the
September 1996 Cash Lease, or (b) One Hundred Sixteen Million Dollars
($116,000,000),
provided, in no event shall any amount in respect of any Cross-Border
Lease be included in the calculation of such sum unless,
(A) CPIL and the Borrower have the right to use (during the term
of such Cross-Border Lease), and acquire title to (upon the
expiration of the term of such Cross-Border Lease), the
property which is the subject of such Cross-Border Lease,
and
(B) no agreements or instruments evidencing or guaranteeing the
Debt constituting such Cross-Border Lease contain any
covenants with respect to the financial condition of the
Borrower and its Subsidiaries which are more restrictive
than those set forth in this Agreement.
"Debt" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money (whether or not evidenced
by a Security);
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising
in the ordinary course of business but including, without
limitation, all liabilities created or arising under any
conditional sale or other title retention agreement with
respect to any such property);
(c) its Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not
such Person has assumed or otherwise become personally
liable for such liabilities);
(e) all obligations in respect of letters of credit; and
(f) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (e) above;
provided that in no event shall Debt include any obligations arising in
connection with Tax-Exempt Bonds.
"Default" means any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived in writing, become an Event of Default.
"Default Rate" means, with respect to any Loan, on any day, the
sum of 2% plus the then highest interest rate (including the Applicable
Margin) which may be applicable to any Loans hereunder (irrespective of
whether any such type of Loans are actually outstanding hereunder).
"Deposit Subsidiary" means Condepco, Inc., a Delaware corporation
and Wholly-Owned Subsidiary which
(a) was formed by the Borrower for the sole purpose of holding a
portion of the proceeds received by the Borrower and/or CPIL from one or
more Sale and Leaseback Transactions involving the property which is the
subject of the Cross-Border Leases, and
(b) has no assets or liabilities other than the cash and cash
equivalents pledged to secure the obligations of CPIL under the Cross-
Border Leases.
"Disposition Value" means, at any time, with respect to any
property
(a) in the case of property that does not constitute Subsidiary
Stock, the book value thereof, valued at the time of such disposition in
good faith by the Borrower, and
(b) in the case of property that constitutes Subsidiary Stock,
an amount equal to that percentage of book value of the assets of the
Subsidiary that issued such stock as is equal to the percentage that the
book value of such Subsidiary Stock represents of the book value of all of
the outstanding capital stock of such Subsidiary (assuming, in making such
calculations, that all Securities convertible into such capital stock are
so converted and giving full effect to all transactions that would occur or
be required in connection with such conversion) determined at the time of
the disposition thereof, in good faith by the Borrower.
"Dollars" or "$" means dollars in lawful currency of the United
States of America.
"Domestic Business Day" means any day except a Saturday, Sunday
or other day on which commercial banks in Atlanta, Georgia, Chicago,
Illinois or New York, New York are authorized or required by law to close.
"Environmental Authority" means any foreign, federal, state,
local or regional government that exercises any form of jurisdiction or
authority under any Environmental Requirement.
"Environmental Authorizations" means all licenses, permits,
orders, approvals, notices, registrations or other legal prerequisites for
conducting the business of the Borrower or any Subsidiary required by any
Environmental Requirement.
"Environmental Judgments and Orders" means all judgments, decrees
or orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements
with an Environmental Authority or other entity arising from or in any way
associated with any Environmental Requirement, whether or not incorporated
in a judgment, decree or order.
"Environmental Law" means any and all federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
but not limited to those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.
"Environmental Liabilities" means any liabilities, whether
accrued, contingent or otherwise, arising from and in any way associated
with any Environmental Requirements.
"Environmental Notices" means notice from any Environmental
Authority or by any other person or entity, of possible or alleged
noncompliance with or liability under any Environmental Requirement,
including without limitation any complaints, citations, demands or requests
from any Environmental Authority or from any other person or entity for
correction of any violation of any Environmental Requirement or any
investigations concerning any violation of any Environmental Requirement.
"Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" means releases as defined in CERCLA or
under any applicable state or local environmental law or regulation.
"Environmental Requirements" means any legal requirement relating
to health, safety or the environment and applicable to the Borrower, any
Subsidiary or the Real Properties, including but not limited to any such
requirement under CERCLA or similar state legislation.
"Equivalent Capital Lease Amount" means, at any time, with
respect to any LSPI Lease or any Niagara Lease, an amount equal to the sum
of
(a) the aggregate principal amount of all the outstanding Debt
of the Borrower or any Subsidiary secured by any Lien on the
property which, as of the Closing Date, is the subject of
such LSPI Lease or Niagara Lease, plus
(b) if such LSPI Lease or Niagara Lease is still in effect at
such time, the amount which would appear on a consolidated
balance sheet of the Borrower and the Subsidiaries at such
time in respect of such LSPI Lease or Niagara Lease,
assuming for purposes of preparing such balance sheet that
such LSPI Lease or Niagara Lease was not an operating lease
but rather a Capital Lease reflected as a liability on such
balance sheet.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules or regulations
promulgated thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the
Borrower under section 414 of the Code.
"Euro-Dollar Business Day" means any Domestic Business Day on
which dealings in Dollar deposits are carried out in the London interbank
market.
"Euro-Dollar Loan" means a loan made by a Bank under this
Agreement which bears or is to bear interest at a rate based upon the
London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.06(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Excepted Priority Debt" means, at any time,
(a) Debt of the Borrower or any Subsidiary secured by the
property which is, as of the Closing Date, the subject of
any of the LSPI Leases or the Niagara Leases, so long as (i)
the aggregate amount of all obligations of the Borrower and
the Subsidiaries in respect of such Debt does not at any
time exceed the lesser of Five Hundred Million Dollars
($500,000,000) and the Maximum Lease Amount at such time,
and (ii) such property is subject to no other Lien securing
any other Debt,
(b) Cross-Border Lease Debt, and
(c) the Repap Debt.
"Excluded Transfer" has the meaning set forth in Section 5.12.
"Existing Credit Agreements" means, collectively, (a)
$130,000,000 Credit Agreement dated as of June 27, 1995 between the
Borrower and Wachovia Bank of Georgia, N.A., and (b) $120,000,000 Credit
Agreement dated as of June 27, 1995 between the Borrower and Wachovia Bank
of Georgia, N.A., each as amended.
"Facility A Commitment" means, with respect to each Bank, (i) the
amount set forth opposite the name of such Bank on the signature pages
hereof as its "Facility A Commitment", or (ii) as to any Bank which enters
into an Assignment and Acceptance (whether as transferor Bank or as
Assignee thereunder), the amount of such Bank's Facility A Commitment after
giving effect to such Assignment and Acceptance, in each case as such
amount may be reduced from time to time pursuant to Section 2.08.
"Facility A Loans" means the Facility A Money Market Loans and
the Facility A Syndicated Loans and "Facility A Loan" means any one of such
Loans.
"Facility A Money Market Loan" means a loan made by a Bank under
this Agreement which bears or is to bear interest at a Facility A Money
Market Rate pursuant to Section 2.03(a).
"Facility A Money Market Notes" means promissory notes of the
Borrower, substantially in the form of Exhibit B-1 hereto, evidencing the
obligation of the Borrower to repay the Facility A Money Market Loans,
together with all amendments, consolidations, modifications, renewals and
supplements thereto and "Facility A Money Market Note" means any one of
such Facility A Money Market Notes.
"Facility A Money Market Quote" means an offer by a Bank to make
a Facility A Money Market Loan in accordance with Section 2.03(a)(iii).
"Facility A Money Market Quote Request" has the meaning set forth
in Section 2.03(a)(ii).
"Facility A Money Market Rate" has the meaning set forth in
Section 2.03(a)(iii)(B)(3).
"Facility A Notice of Borrowing" has the meaning set forth in
Section 2.02(a).
"Facility A Quotation Date" has the meaning set forth in Section
2.03(a)(ii)(A).
"Facility A Syndicated Loan" means a Base Rate Loan or a Euro-
Dollar Loan made pursuant to Section 2.01(a) and "Facility A Syndicated
Loans" means Base Rate Loans or Euro-Dollar Loans made pursuant to Section
2.01(a), or any or all of them, as the context shall require.
"Facility A Syndicated Notes" means promissory notes of the
Borrower, substantially in the form of Exhibit A-1 hereto, evidencing the
obligation of the Borrower to repay the Facility A Syndicated Loans,
together with all amendments, consolidations, modifications, renewals and
supplements thereto and "Facility A Syndicated Note" means any one of such
Facility A Syndicated Notes.
"Facility A Termination Date" means September 26, 2002.
"Facility B Commitment" means, with respect to each Bank, (i) the
amount set forth opposite the name of such Bank on the signature pages
hereof as its "Facility B Commitment", or (ii) as to any Bank which enters
into an Assignment and Acceptance (whether as transferor Bank or as
Assignee thereunder), the amount of such Bank's Facility B Commitment after
giving effect to such Assignment and Acceptance, in each case as such
amount may be reduced from time to time pursuant to Section 2.08.
"Facility B Conversion Date" means September 24, 1998, as such
date may be extended from time to time pursuant to Section 2.05(c).
"Facility B Loans" means the Facility B Money Market Loans and
the Facility B Syndicated Loans and "Facility B Loan" means any one of such
Loans.
"Facility B Money Market Loan" means a loan made by a Bank under
this Agreement which bears or is to bear interest at a Money Market Rate
pursuant to Section 2.03(b).
"Facility B Money Market Notes" means promissory notes of the
Borrower, substantially in the form of Exhibit B-2 hereto, evidencing the
obligation of the Borrower to repay the Facility B Money Market Loans,
together with all amendments, consolidations, modifications, renewals and
supplements thereto and "Facility B Money Market Note" means any one of
such Facility B Money Market Notes.
"Facility B Money Market Quote" means an offer by a Bank to make
a Facility B Money Market Loan in accordance with Section 2.03(b)(iii).
"Facility B Money Market Quote Request" has the meaning set forth
in Section 2.03(b)(ii).
"Facility B Money Market Rate" has the meaning set forth in
Section 2.03(b)(iii)(B)(3).
"Facility B Notice of Borrowing" has the meaning set forth in
Section 2.02(b).
"Facility B Quotation Date" has the meaning set forth in Section
2.03(b)(ii)(A).
"Facility B Syndicated Loan" means a Base Rate Loan or a Euro-
Dollar Loan made pursuant to Section 2.01(b) and "Facility B Syndicated
Loans" means Base Rate Loans or Euro-Dollar Loans made pursuant to Section
2.01(b), or any or all of them, as the context shall require.
"Facility B Syndicated Notes" means promissory notes of the
Borrower, substantially in the form of Exhibit A-2 hereto, evidencing the
obligation of the Borrower to repay the Facility B Syndicated Loans,
together with all amendments, consolidations, modifications, renewals and
supplements thereto and "Facility B Syndicated Note" means any one of such
Facility B Syndicated Notes.
"Facility B Termination Date" means September 26, 2002.
"Facility Fee Determination Date" has the meaning set forth in
Section 2.07(a).
"Facility Fee Payment Date" means each March 31, June 30,
September 30 and December 31.
"Fair Market Value" means, at any time and with respect to any
property, the sale value of such property that would be realized in an
arm's-length sale at such time between an informed and willing buyer and an
informed and willing seller (neither being under a compulsion to buy or
sell).
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the next higher 1/100th of 1%) equal to
the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New York
on the Domestic Business Day next succeeding such day, provided that (i) if
the day for which such rate is to be determined is not a Domestic Business
Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the
average rate charged to Wachovia on such day on such transactions as
determined by the Agent.
"Fiscal Quarter" means any fiscal quarter of the Borrower.
"Fiscal Year" means any fiscal year of the Borrower.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America.
"Governmental Authority" means any nation or government, any
state, department, agency or other political subdivision thereof, and any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government, and any
corporation or other entity owned or controlled (through stock or capital
ownership or otherwise) by any of the foregoing.
"Guaranty" means, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing or in
effect guaranteeing any indebtedness, dividend or other obligation of any
other Person in any manner, whether directly or indirectly, including
(without limitation) obligations incurred through an agreement, contingent
or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds
(i) for the purchase or payment of such indebtedness or
obligation, or
(ii) to maintain any working capital or other balance
sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds
for the purchase or payment of such indebtedness or
obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of any other
Person to make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor
under any Guaranty, the indebtedness or other obligations that are the
subject of such Guaranty shall be assumed to be direct obligations of such
obligor.
"Hazardous Materials" includes (a) solid or hazardous waste, as
defined in the Resource Conservation and Recovery Act of 1980, 42 U.S.C.
Section 6901 et seq. and its implementing regulations and amendments, or in
any applicable state or local law or regulation, (b) any "hazardous
substance", "pollutant" or "contaminant", as defined in CERCLA, or in
any applicable state or local law or regulation, (c) gasoline, or any
other petroleum product or by-product, including crude oil or any fraction
thereof, (d) toxic substances, as defined in the Toxic Substances Control
Act of 1976, or in any applicable state or local law or regulation and (e)
insecticides, fungicides, or rodenticides, as defined in the Federal
Insecticide, Fungicide, and Rodenticide Act of 1975, or in any applicable
state or local law or regulation, as each such Act, statute or regulation
may be amended from time to time.
"Income Available for Fixed Charges" for any period means the sum
of (i) Consolidated Net Earnings, (ii) taxes on income and
(iii) Consolidated Fixed Charges, all determined with respect to the
Borrower and its Consolidated Subsidiaries on a consolidated basis for such
period and in accordance with GAAP.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending
on the numerically corresponding day in the first, second, third or sixth
month thereafter, as the Borrower may elect in the applicable Notice of
Borrowing; provided that:
(a) any Interest Period (subject to clause (c) below) which
would otherwise end on a day which is not a Euro-Dollar Business Day shall
be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Euro-Dollar Business
Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall, subject to clause (c) below, end on the last Euro-Dollar Business
Day of the appropriate subsequent calendar month; and
(c) any Interest Period (i) for any Facility A Syndicated
Borrowing consisting of Euro-Dollar Loans which begins before the Facility
A Termination Date and would otherwise end after the Facility A Termination
Date shall end on the Facility A Termination Date, and (ii) for any
Facility B Syndicated Borrowing consisting of Euro-Dollar Loans which
begins before the Facility B Termination Date and would otherwise end after
the Facility B Termination Date shall end on the Facility B Termination
Date;
(2) with respect to each Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending 90 days thereafter; provided that:
(a) any Interest Period (subject to clause (b) below) which
would otherwise end on a day which is not a Domestic Business Day shall be
extended to the next succeeding Domestic Business Day; and
(b) any Interest Period (i) for any Facility A Syndicated
Borrowing consisting of Base Rate Loans which begins before the Facility A
Termination Date and would otherwise end after the Facility A Termination
Date shall end on the Facility A Termination Date, and (ii) for any
Facility B Syndicated Borrowing consisting of Base Rate Loans which begins
before the Facility B Termination Date and would otherwise end after the
Facility B Termination Date shall end on the Facility B Termination Date;
and
(3) with respect to each Money Market Borrowing, the period commencing on
the date of such Borrowing and ending 7 to 180 days thereafter, as the
Borrower may indicate in the applicable Money Market Quote Request;
provided that:
(a) any Interest Period (subject to clause (b) below) which
would otherwise end on a day which is not a Domestic Business Day shall be
extended to the next succeeding Domestic Business Day; and
(b) any Interest Period (i) for any Facility A Money Market
Borrowing which begins before the Facility A Termination Date and would
otherwise end after the Facility A Termination Date shall end on the
Facility A Termination Date, and (ii) for any Facility B Money Market
Borrowing which begins before the Facility B Termination Date and would
otherwise end after the Facility B Termination Date shall end on the
Facility B Termination Date.
"Investment" means any investment, made in cash or by delivery of
property, by the Borrower or any of its Subsidiaries in any Person, whether
by acquisition of stock, indebtedness or other obligation or Security, or
by loan, Guaranty, advance capital contribution or otherwise. For purposes
of this Agreement, an Investment shall be valued at the lesser of (i) cost
and (ii) the value at which such Investment is to be shown on the books for
the Borrower and its Subsidiaries in accordance with GAAP.
"Lease Rentals" means, with respect to any period, the sum of the
rental and other obligations required to be paid during such period by the
Borrower or any Consolidated Subsidiary as lessee under all leases of real
or personal property (other than Capital Leases), excluding any amount
required to be paid by the lessee (whether or not therein designated as
rental or additional rental) on account of maintenance and repairs,
insurance, taxes, assessments, water rates and similar charges, provided
that, if at the date of determination, any such rental or other obligations
are contingent or not otherwise definitely determinable by the terms of the
related lease, the amount of such obligations (i) shall be assumed to be
equal to the amount of such obligations for the period of 12 consecutive
calendar months immediately preceding the date of determination or (ii) if
the related lease was not in effect during such preceding 12-month period,
shall be the amount estimated by a Senior Financial Officer of the Borrower
on a reasonable basis and in good faith.
"Lending Office" means, as to each Bank, its office located at
its address set forth on the signature pages hereof (or identified on the
signature pages hereof as its Lending Office) or such other office as such
Bank may hereafter designate as its Lending Office by notice to the
Borrower and the Agent.
"Lien" means any mortgage, lien, pledge, charge, security
interest or other encumbrance, or any interest or title of any vendor,
lessor, lender or other secured party under any conditional sale or other
title retention agreement or Capital Lease (including in the case of stock,
stockholder agreements, voting trust agreements and all similar
arrangements). For the purposes of this Agreement, the Borrower or any
Subsidiary shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, Capital Lease or other title retention
agreement relating to such asset.
"Loan" means a Syndicated Loan or a Money Market Loan and "Loans"
means Syndicated Loans or Money Market Loans, or any or all of them, as the
context shall require.
"Loan Documents" means this Agreement, the Notes, any other
document evidencing, relating to or securing the Loans, and any other
document or instrument delivered from time to time in connection with this
Agreement, the Notes or the Loans, as such documents and instruments may be
amended or supplemented from time to time.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.06(c).
"LSPI" means Lake Superior Paper Industries, a joint venture
organized under the general partnership laws of the State of Minnesota.
"LSPI Leases" means and includes those five separate Facility
Leases, four of which are dated December 31, 1987, and one of which is
dated December 22, 1987, all between LSPI and First National Bank of
Minneapolis, as Owner Trustee.
"Margin Stock" means "margin stock" as defined in Regulation G,
T, U or X of the Board of Governors of the Federal Reserve System, as in
effect from time to time, together with all official rulings and
interpretations issued thereunder.
"Material Adverse Effect" means with respect to any event, act,
condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation
or proceeding), whether singly or in conjunction with any other event or
events, act or acts, condition or conditions, occurrence or occurrences,
whether or not related, that the event, act, condition or occurrence would
have a material adverse effect upon any of (i) the financial condition,
operations, business, assets or properties of the Borrower and its
Subsidiaries taken as a whole or (ii) the ability of the Borrower to
perform its obligations under this Agreement and the Notes or (iii) the
validity or enforceability of this Agreement or the Notes.
"Material Subsidiary" means at any time, any Subsidiary having
total assets as of the end of the Fiscal Quarter most recently ended at
least 60 days prior to such time in excess of $1,000,000.
"Maximum Lease Amount" means, at any time, the sum of the
Equivalent Capital Lease Amounts at such time for each LSPI Lease and each
Niagara Lease.
"May 1996 Cross-Border Leases" means, collectively, the leases
identified in clause (i) and clause (ii) of the definition of "Cross-Border
Leases" set forth in this Section.
"Money Market Loans" means the Facility A Money Market Loans and
the Facility B Money Market Loans and "Money Market Loan" means any one of
such Loans.
"Money Market Notes" means the Facility A Money Market Notes and
the Facility B Money Market Notes and "Money Market Note" means any one of
such Notes.
"Money Market Quote" means a Facility A Money Market Quote or a
Facility B Money Market Quote.
"Money Market Quote Request" means a Facility A Money Market
Quote Request or a Facility B Money Market Quote Request.
"Money Market Rate" means a Facility A Money Market Rate or a
Facility B Money Market Rate.
"Moody's" means Moody's Investors Service and any successor
thereto which is a nationally recognized rating agency.
"Multiemployer Plan" means any Plan that is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Niagara Lease" means that certain Lease Agreement, dated as of
December 30, 1986, between Equipment Credit Services, Inc. (successor to
Wells Fargo Leasing Corporation) and Niagara Paper (successor to Pentair
Financial Corporation).
"Niagara Paper" means Niagara of Wisconsin Paper Corporation, a
Wisconsin corporation.
"Note" means a Syndicated Note or a Money Market Note and "Notes"
means Syndicated Notes or Money Market Notes, or any or all of them, as the
context shall require.
"Notice of Borrowing" means a Facility A Notice of Borrowing or a
Facility B Notice of Borrowing.
"Number 35 Sale/Lease-Back" means any sale and subsequent lease-
back by the Borrower of its Stevens Point Division Number 35 Paper Machine,
together with a lease and subsequent sublease-back by the Borrower of
certain real property associated with the use and operation of such Paper
Machine.
"Officer's Certificate" has the meaning set forth in Section
3.01(f).
"Participant" has the meaning set forth in Section 9.07(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" means (a) the Repap Acquisition, and (b)
the acquisition by the Borrower or any Subsidiary of the Borrower of shares
of capital stock of any Person or assets from any Person, if: (A) in the
case of the acquisition of shares of capital stock of any Person,
immediately after giving effect to such acquisition (i) such Person is a
Consolidated Subsidiary; (ii) the Borrower controls such Person directly or
indirectly through a Subsidiary; (iii) no Default shall have occurred and
be continuing; (iv) the line or lines of business engaged in by such Person
are reasonably related, supportive or incidental to the lines of business
engaged in by the Borrower and its Subsidiaries on the Closing Date; and
(v) such acquisition is made on a negotiated basis with the approval of the
Board of Directors of the Person to be acquired and, if necessary, the
shareholders of the Person to be acquired; and (B) in the case of the
acquisition of assets from any Person, immediately after giving effect to
such acquisition: (i) the assets acquired by the Borrower or such
Subsidiary of the Borrower, shall be used by the Borrower or such
Subsidiary in a line of business reasonably related, supportive or
incidental to the lines of business engaged in by the Borrower and its
Subsidiaries on the Closing Date; and (ii) no Default shall have occurred
and be continuing.
"Permitted Encumbrances" means:
(a) Liens (i) securing Excepted Priority Debt, or (ii) arising
in connection with the Number 35 Sale/Lease-Back;
(b) Liens in connection with worker's compensation, unemployment
insurance, old age benefits, social security obligations,
taxes, assessments, statutory obligations or other similar
charges, good faith deposits in connection with tenders,
contracts or leases to which the Borrower or any Subsidiary
is a party (other than contracts for borrowed money), or
other deposits required to be made in the ordinary course of
business; provided, that either (i) in each case the
obligation secured is not overdue or, if overdue, is being
contested in good faith by appropriate proceedings and
reserves have been established therefor that in the
Borrower's reasonable opinion are adequate, or (ii) the
aggregate amount of liabilities (including interest and
penalties, if any) of the Borrower and its Subsidiaries
served by such Liens (other than those covered by clause (i)
of this paragraph) does not at any time exceed $10,000,000
and no such Lien (other than those covered by clause (i) of
this paragraph) could reasonably be expected to have a
Material Adverse Effect;
(c) mechanics', workmen's, materialmen's, landlords', carriers'
or other similar Liens arising in the ordinary course of
business with respect to obligations which are not due or,
if overdue, either (i) are being contested in good faith by
appropriate proceedings and for which reserves have been
established that in the Borrower's reasonable opinion are
adequate or (ii) the aggregate amount of liabilities
(including interest and penalties, if any) of the Borrower
and its Subsidiaries secured by such Liens and no such Lien
(other than those covered by clause (i) of this paragraph)
could reasonably be expected to have a Material Adverse
Effect ;
(d) Liens arising out of judgments or awards against the
Borrower or any Subsidiary with respect to which the
Borrower or such Subsidiary shall be prosecuting an appeal
or proceeding for review and with respect to which it shall
have obtained a stay of execution pending such appeal or
proceeding for review and shall maintain reserves in
accordance with GAAP;
(e) Liens for property taxes not yet subject to penalties for
nonpayment, or survey exceptions, encumbrances, mineral or
royalty reservations, easements or reservations of, or
rights of others for, rights of way, sewers, electric lines,
pipe lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of
its Real Properties, which exceptions, encumbrances,
easements, reservations, rights and restrictions do not in
the aggregate materially detract from the value of such Real
Properties taken as a whole or materially impair their use
in the operation of the business of the Borrower and its
Subsidiaries;
(f) Liens upon any Real Property acquired by the Borrower or any
Subsidiary after the date hereof (A) to secure the payment
of all or any part of the purchase price of such Real
Property upon the acquisition thereof by the Borrower or
such Subsidiary, or (B) to secure any Debt issued, assumed
or guaranteed by the Borrower or any Subsidiary prior to, at
the time of, or within 90 days after the acquisition of such
Real Property, which Debt is issued, assumed or guaranteed
for the purpose of financing all or any part of the purchase
price of such Real Property, provided that in the case of
any such acquisition the Lien shall not apply to any Real
Property other than the Real Property so acquired or
purchased;
(g) any extension, renewal or replacement (or successive
extensions, renewals, or replacements) in whole or in part
of any Lien referred to in the foregoing paragraphs (a)
through (f), inclusive, provided, however, that the
principal amount of Debt secured thereby shall not exceed
the principal amount of Debt so secured at the time of such
extension, renewal or replacement, and that such extension,
renewal or replacement shall be limited to the Real Property
which was subject to the Lien so extended, renewed or
replaced; or
(h) other Liens, provided that the aggregate principal amount of
Debt secured by such Liens (which are not otherwise
permitted by the foregoing clauses (a) through (g)) shall
not exceed at any time 10% of Consolidated Net Worth.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section
3(3) of ERISA) that is or within the preceding five years has been
established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company
or any ERISA Affiliate or with respect to which the Company or any ERISA
Affiliate may have any liability.
"Prime Rate" refers to that interest rate so denominated and set
by Wachovia from time to time as an interest rate basis for borrowings.
The Prime Rate is but one of several interest rate bases used by Wachovia.
Wachovia lends at interest rates above and below the Prime Rate.
"Priority Debt" means (a) any Debt of the Borrower secured by any
Lien permitted pursuant to clause (h) of the definition of "Permitted
Encumbrances" set forth in this Section, and (b) any Debt of any
Subsidiary; provided, however, that Priority Debt shall not include (i) any
Debt owed by any Subsidiary to the Borrower or any Wholly-Owned Subsidiary,
and (ii) any Debt incurred to refinance any Debt of any Subsidiary
outstanding on the Closing Date to the extent the amount of Debt so
incurred is not in excess of the amount of Debt refinanced.
"Property Disposition Date" has the meaning set forth in Section
5.12.
"Rate Determination Date" has the meaning set forth in Section
2.06(a).
"Real Properties" means all real property owned, leased or
otherwise used or occupied by the Borrower or any Subsidiary, wherever
located.
"Redeemable" means, with respect to the capital stock of any
Person, each share of such Person's capital stock that is:
(a) redeemable, payable or required to be purchased or otherwise
retired or extinguished, or convertible into Debt of such
Person (i) at a fixed or determinable date, whether by
operation of sinking fund or otherwise, (ii) at the option
of any Person other than such Person, or (iii) upon the
occurrence of a condition not solely within the control of
such Person; or
(b) convertible into other Redeemable capital stock.
"Repap" means Repap USA, Inc., a Wisconsin corporation, and its
successors.
"Repap Acquisition" means the acquisition by the Borrower in
accordance with the Repap Purchase Agreement of all the issued and
outstanding shares of capital stock of Repap.
"Repap Debt" means (i) Debt of Repap Wisconsin, evidenced by the
9.25% First Priority Senior Secured Notes Due 2002, issued and outstanding
pursuant to the Indenture dated as of February 1, 1994 between Repap
Wisconsin and The Bank of New York, as Trustee, (ii) Debt of Repap
Wisconsin, evidenced by the 9 7/8% Second Priority Senior Secured Notes Due
2006, issued and outstanding pursuant to the Indenture dated as of February
1, 1994 between Repap Wisconsin and Banker's Trust Company, as Trustee, and
(iii) Debt of Repap Wisconsin incurred to refinance Debt described in
clause (i) or (ii) of this definition to the extent the amount of such Debt
so incurred is not in excess of the amount of Debt refinanced.
"Repap Entities" means, collectively, Repap, Repap Sales and
Repap Wisconsin and "Repap Entity" means any of Repap, Repap Sales or Repap
Wisconsin.
"Repap Purchase Agreement" means that certain Stock Purchase
Agreement dated August 8, 1997 between Repap Enterprises Inc., a
corporation incorporated under the laws of Canada, and the Borrower.
"Repap Sales" means Repap Sales Corp., a New York corporation,
and its successors.
"Repap Wisconsin" means Repap Wisconsin, Inc., a Wisconsin
corporation, and its successors.
"Required Banks" means at any time Banks having at least 66 2/3%
of the aggregate amount of the Commitments or, if the Commitments are no
longer in effect, Banks holding at least 66 2/3% of the aggregate
outstanding principal amount of the Notes.
"Responsible Officer" means the chief executive officer, the
chief operating officer, any Senior Financial Officer, any assistant
treasurer and any other officer of the Borrower with responsibility for the
administration of the relevant portion of this Agreement.
"Sale and Leaseback Transaction" means a transaction or series of
transactions pursuant to which the Borrower or any Subsidiary shall sell or
transfer to any Person (other than the Borrower or a Subsidiary) any
property, whether now owned or hereafter acquired, and, as part of the same
transaction or series of transactions, the Borrower or any Subsidiary shall
rent or lease as lessee (other than pursuant to a Capital Lease), or
similarly acquire the right to possession or use of, such property or one
or more properties which it intends to use for the same purpose or purposes
as such property.
"Security" has the meaning set forth in Section 2(l) of the
Securities Act of 1933.
"Senior Financial Officer" means the chief financial officer,
senior finance officer, principal accounting officer, treasurer or
comptroller of the Borrower.
"Significant Subsidiary" means at any time any Subsidiary that
would at such time constitute a "significant subsidiary" (as such term is
defined in Regulation S-X of the Securities and Exchange Commission as in
effect on the Closing Date) of the Borrower.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, and any successor thereto which is a
nationally recognized rating agency.
"Subsidiary" means, as to any Person, any corporation,
association or other business entity in which such Person or one or more of
its Subsidiaries or such Person and one or more of its Subsidiaries owns
sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such entity, and any
partnership or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries. Unless the context
otherwise clearly requires, any reference to a "Subsidiary" is a reference
to a Subsidiary of the Borrower.
"Subsidiary Stock" means, with respect to any Person, the stock
(or any option or warrants to purchase stock or other Securities
exchangeable for or convertible into stock) of any Subsidiary of such
Person.
"Substantial Portion" means, with respect to any Transfer of
property, any portion of property of the Borrower and its Subsidiaries, if
(a) the Disposition Value of such property, when added to the
Disposition Value of all other property of the Borrower and
its Subsidiaries that was subject to a Transfer (other than
an Excluded Transfer) during the 365-day period ending on
and including the Property Disposition Date of such property
exceeds an amount equal to twenty percent (20%) of
Consolidated Assets determined as of the end of the then
most recently ended Fiscal Quarter; or
(b) such property and all other property of the Borrower and its
Subsidiaries that was subject to a Transfer (other than an
Excluded Transfer) during the 365-day period ending on and
including the Property Disposition Date of such property
accounts, in the aggregate, for more than twenty percent
(20%) of Consolidated Net Earnings in respect of the then
most recently ended period of eight (8) consecutive Fiscal
Quarters as of the Property Disposition Date of such
property; or
(c) the Disposition Value of such property, when added to the
Disposition Value of all other property of the Borrower and
its Subsidiaries that was subject to a Transfer (other than
an Excluded Transfer) during the period beginning on the
Closing Date and ending on and including the Property
Disposition Date of such property exceeds an amount equal to
thirty percent (30%) of Consolidated Assets determined as of
the end of the then most recently ended Fiscal Quarter.
"Syndicated Loan" means a Facility A Syndicated Loan or a
Facility B Syndicated Loan and "Syndicated Loans" means Facility A
Syndicated Loans and Facility B Syndicated Loans.
"Syndicated Notes" means the Facility A Syndicated Notes and the
Facility B Syndicated Notes and "Syndicated Note" means any one of such
Syndicated Notes.
"Taxes" has the meaning set forth in Section 2.12(c).
"Tax-Exempt Bonds" means (a) the Tax Increment Revenue Bonds
(Lake Superior Paper Company Project Series 1985) in the aggregate
principal amount of $29,300,000 issued by the City of Duluth (the
"Issuer"), and subject to a Development Agreement, dated December 2, 1985,
as amended, between the Issuer and LSPI, (b) the Steam Utility Revenue
Bonds of 1987 in the aggregate principal amount of $17,000,000 issued by
the Issuer pursuant to a Financing Agreement, dated as of May 15, 1987
among the Issuer, LSPI and the Prudential Insurance Company of America, (c)
the Tax-Exempt Adjustable Mode Exempt Facility Revenue Bonds (Consolidated
Papers, Inc. Project) Series 1997 in the aggregate principal amount of
$5,000,000 issued by the City of Stevens Point, Wisconsin, and (d) any
liabilities and obligations related to or arising from the foregoing.
"Transfer" means, with respect to any Person, any transaction in
which such Person sells, conveys, transfers or leases (as lessor) any of
its property, including, without limitation, Subsidiary Stock.
"Transferee" has the meaning set forth in Section 9.07(d).
"Unused Facility A Commitment" means at any date, with respect to
any Bank, an amount equal to its Facility A Commitment less the aggregate
outstanding principal amount of its Facility A Loans.
"Unused Facility B Commitment" means at any date, with respect to
any Bank, an amount equal to its Facility B Commitment less the aggregate
outstanding principal amount of its Facility B Loans.
"Wachovia" means Wachovia Bank, N.A., a national banking
association and its successors.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary one
hundred percent (100%) of the equity interest (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the
Borrower and the Borrower's other Wholly-Owned Subsidiaries at such time.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all terms of an accounting character used
herein shall be interpreted, all accounting determinations hereunder shall
be made, and all financial statements required to be delivered hereunder
shall be prepared in accordance with GAAP, applied on a basis consistent
(except for changes concurred in by the Borrower's independent public
accountants or otherwise required by a change in GAAP) with the most recent
audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Banks, unless with respect to
any such change concurred in by the Borrower's independent public
accountants or required by GAAP, in determining compliance with any of the
provisions of this Agreement or any of the other Loan Documents: (i) the
Borrower shall have objected to determining such compliance on such basis
at the time of delivery of such financial statements, or (ii) the Required
Banks shall so object in writing within 30 days after the delivery of such
financial statements, in either of which events such calculations shall be
made on a basis consistent with those used in the preparation of the latest
financial statements as to which such objection shall not have been made
(which, if objection is made in respect of the first financial statements
delivered under Section 5.04, shall mean the financial statements referred
to in Section 4.04).
SECTION 1.03. Use of Defined Terms. All terms defined in this
Agreement shall have the same meanings when used in any of the other Loan
Documents, unless otherwise defined therein or unless the context shall
otherwise require.
SECTION 1.04. Terminology. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural and the
plural shall include the singular. Titles of Articles and Sections in this
Agreement are for convenience only, and neither limit nor amplify the
provisions of this Agreement.
SECTION 1.05. References. Unless otherwise indicated,
references in this Agreement to "Articles", "Exhibits", "Schedules", and
"Sections" are references to articles, exhibits, schedules and sections
hereof.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Make Syndicated Loans. (a) Each
Bank severally agrees, on the terms and conditions set forth herein, to
make Facility A Syndicated Loans to the Borrower from time to time before
the Facility A Termination Date; provided that, immediately after each such
Facility A Syndicated Loan is made, the aggregate outstanding principal
amount of Facility A Syndicated Loans by such Bank shall not exceed the
amount of its Facility A Commitment, and provided further that the
aggregate principal amount of all Facility A Syndicated Loans, together
with the aggregate principal amount of all Facility A Money Market Loans,
at any one time outstanding shall not exceed the aggregate amount of the
Facility A Commitments of all of the Banks at such time. Each Facility A
Syndicated Borrowing consisting of Euro-Dollar Loans under this Section
shall be in an aggregate principal amount of $5,000,000 or any larger
multiple of $1,000,000 and each Facility A Syndicated Borrowing consisting
of Base Rate Loans under this Section shall be in an aggregate principal
amount of $1,000,000 or any larger multiple of $500,000 (except that any
such Facility A Syndicated Borrowing may be in the aggregate amount of the
Unused Facility A Commitments) and shall be made from the several Banks
ratably in proportion to their respective Facility A Commitments. Within
the foregoing limits, the Borrower may borrow under this Section, repay or,
to the extent permitted by Section 2.10, prepay Facility A Syndicated Loans
and reborrow under this Section at any time before the Facility A
Termination Date.
(b) Each Bank severally agrees, on the terms and conditions set
forth herein, to make Facility B Syndicated Loans to the Borrower from time
to time before the Facility B Termination Date; provided that, immediately
after each such Facility B Syndicated Loan is made, the aggregate
outstanding principal amount of Facility B Syndicated Loans by such Bank
shall not exceed the amount of its Facility B Commitment, provided further
that (i) the aggregate principal amount of all Facility B Syndicated Loans,
together with the aggregate principal amount of all Facility B Money Market
Loans, at any one time outstanding shall not exceed the aggregate amount of
the Facility B Commitments of all of the Banks at such time, (ii) after the
Conversion Date (A) the proceeds of any Facility B Borrowing shall be used
exclusively for the purpose of repaying Facility B Loans maturing on the
date of such Facility B Borrowing and for no other purpose and (B) the
ability of the Borrower to borrow Facility B Loans may be limited by the
provisions of Section 2.09(d). Each Facility B Syndicated Borrowing
consisting of Euro-Dollar Loans under this Section shall be in an aggregate
principal amount of $5,000,000 or any larger multiple of $1,000,000 and
each Facility A Syndicated Borrowing consisting of Base Rate Loans under
this Section shall be in an aggregate principal amount of $1,000,000 or any
larger multiple of $500,000 (except that any such Facility B Syndicated
Borrowing may be in the aggregate amount of the Unused Facility B
Commitments) and shall be made from the several Banks ratably in proportion
to their respective Facility B Commitments. Within the foregoing limits,
the Borrower may borrow under this Section, repay or, to the extent
permitted by Section 2.10, prepay Facility B Syndicated Loans and reborrow
under this Section at any time before the Facility B Termination Date.
SECTION 2.02. Method of Borrowing Syndicated Loans. (a) The
Borrower shall give the Agent notice in the form attached hereto as Exhibit
J-1 (a "Facility A Notice of Borrowing") of each Facility A Syndicated
Borrowing prior to 11:00 A.M. (Atlanta, Georgia time) on the Domestic
Business Day of each Base Rate Borrowing and at least 3 Euro-Dollar
Business Days before each Euro-Dollar Borrowing, specifying:
(i) the date of such Facility A Syndicated Borrowing, which
shall be a Domestic Business Day in the case of a Base Rate
Borrowing or a Euro-Dollar Business Day in the case of a Euro-
Dollar Borrowing,
(ii) the aggregate amount of such Facility A Syndicated
Borrowing,
(iii) whether the Facility A Syndicated Loans comprising
such Facility A Syndicated Borrowing are to be Base Rate Loans or
Euro-Dollar Loans, and
(iv) in the case of a Euro-Dollar Borrowing, the duration
of the Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.
(b) The Borrower shall give the Agent notice in the form
attached hereto as Exhibit J-2 (a "Facility B Notice of Borrowing") of each
Facility B Syndicated Borrowing prior to 11:00 A.M. (Atlanta, Georgia time)
on the Domestic Business Day of each Base Rate Borrowing and at least 3
Euro-Dollar Business Days before each Euro-Dollar Borrowing, specifying:
(i) the date of such Facility B Syndicated Borrowing, which
shall be a Domestic Business Day in the case of a Base Rate
Borrowing or a Euro-Dollar Business Day in the case of a Euro-
Dollar Borrowing,
(ii) the aggregate amount of such Facility B Syndicated
Borrowing,
(iii) whether the Facility B Syndicated Loans comprising
such Facility B Syndicated Borrowing are to be Base Rate Loans or
Euro-Dollar Loans, and
(iv) in the case of a Euro-Dollar Borrowing, the duration
of the Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's
ratable share of the Syndicated Borrowing requested in such Notice of
Borrowing and such Notice of Borrowing shall not thereafter be revocable by
the Borrower.
(d) Not later than 12:00 P.M. (Atlanta, Georgia time) on the
date of each Syndicated Borrowing, each Bank shall (except as provided in
subsection (d) of this Section) make available its ratable share of such
Syndicated Borrowing, in Federal or other funds immediately available in
Atlanta, Georgia, to the Agent at its address referred to in or specified
pursuant to Section 9.01. Unless the Agent determines that any applicable
condition specified in Article III has not been satisfied, the Agent will
make the funds so received from the Banks available to the Borrower at the
Agent's aforesaid address. Unless the Agent receives notice from a Bank,
at the Agent's address referred to in Section 9.01, no later than 4:00 P.M.
(local time at such address) on the Domestic Business Day before the date
of a Syndicated Borrowing stating that such Bank will not make a Syndicated
Loan in connection with such Syndicated Borrowing, the Agent shall be
entitled to assume that such Bank will make a Syndicated Loan in connection
with such Syndicated Borrowing and, in reliance on such assumption, the
Agent may (but shall not be obligated to) make available such Bank's
ratable share of such Syndicated Borrowing to the Borrower for the account
of such Bank. If the Agent makes such Bank's ratable share available to
the Borrower and such Bank does not in fact make its ratable share of such
Syndicated Borrowing available on such date, the Agent shall be entitled to
recover such Bank's ratable share from such Bank or the Borrower (and for
such purpose shall be entitled to charge such amount to any account of the
Borrower maintained with the Agent), together with interest thereon for
each day during the period from the date of such Syndicated Borrowing until
such sum shall be paid in full at a rate per annum equal to the rate at
which the Agent determines that it obtained (or could have obtained)
overnight Federal funds to cover such amount for each such day during such
period, provided that any such payment by the Borrower of such Bank's
ratable share and interest thereon shall be without prejudice to any rights
that the Borrower may have against such Bank. If such Bank shall repay to
the Agent such corresponding amount, such amount so repaid shall constitute
such Bank's Syndicated Loan included in such Syndicated Borrowing for
purposes of this Agreement.
(e) If any Bank makes a new Facility A Syndicated Loan hereunder
on a day on which the Borrower is to repay all or any part of an
outstanding Facility A Syndicated Loan from such Bank, such Bank shall
apply the proceeds of its new Facility A Syndicated Loan to make such
repayment and only an amount equal to the difference (if any) between the
amount being borrowed and the amount being repaid shall be made available
by such Bank to the Agent as provided in subsection (d) of this Section, or
remitted by the Borrower to the Agent as provided in Section 2.12, as the
case may be.
(f) If any Bank makes a new Facility B Syndicated Loan hereunder
on a day on which the Borrower is to repay all or any part of an
outstanding Facility B Syndicated Loan from such Bank, such Bank shall
apply the proceeds of its new Facility B Syndicated Loan to make such
repayment and only an amount equal to the difference (if any) between the
amount being borrowed and the amount being repaid shall be made available
by such Bank to the Agent as provided in subsection (d) of this Section, or
remitted by the Borrower to the Agent as provided in Section 2.12, as the
case may be.
(g) Notwithstanding anything to the contrary contained in this
Agreement, no Euro-Dollar Borrowing may be made if there shall have
occurred a Default or an Event of Default, which Default or Event of
Default shall not have been cured or waived in writing.
(h) In the event that a Notice of Borrowing fails to specify
whether the Syndicated Loans comprising such Borrowing are to be Base Rate
Loans or Euro-Dollar Loans, such Syndicated Loans shall be made as Base
Rate Loans. If the Borrower is otherwise entitled under this Agreement to
repay any Facility A Loans maturing at the end of an Interest Period
applicable thereto with the proceeds of a new Syndicated Borrowing, and the
Borrower fails to repay such Facility A Loans using its own moneys and
fails to give a Notice of Borrowing in connection with such new Syndicated
Borrowing, a new Facility A Syndicated Borrowing shall be deemed to be made
on the date such Facility A Loans mature in an amount equal to the
principal amount of the Facility A Loans so maturing, and the Facility A
Loans comprising such new Facility A Syndicated Borrowing shall be Base
Rate Loans. If the Borrower is otherwise entitled under this Agreement to
repay any Facility B Loans maturing at the end of an Interest Period
applicable thereto with the proceeds of a new Syndicated Borrowing, and the
Borrower fails to repay such Facility B Loans using its own moneys and
fails to give a Notice of Borrowing in connection with such new Syndicated
Borrowing, a new Facility B Syndicated Borrowing shall be deemed to be made
on the date such Facility B Loans mature in an amount equal to the
principal amount of the Facility B Loans so maturing, and the Facility B
Loans comprising such new Facility B Syndicated Borrowing shall be Base
Rate Loans.
(i) Notwithstanding anything to the contrary contained herein,
(i) there shall not be more than 10 different Interest Periods outstanding
at the same time (for which purpose (A) Interest Periods applicable to Base
Rate Loans shall be disregarded, and (B) Interest Periods described in
different numbered clauses of the definition of the term "Interest Period"
shall be deemed to be different Interest Periods even if they are
coterminous), (ii) the proceeds of any Facility A Syndicated Borrowing
consisting of Base Rate Loans shall be applied first to repay the unpaid
principal amount of all Base Rate Loans which are Facility A Loans (if any)
outstanding immediately before such Facility A Syndicated Borrowing, and
(iii) the proceeds of any Facility B Syndicated Borrowing consisting of
Base Rate Loans shall be applied first to repay the unpaid principal amount
of all Base Rate Loans which are Facility B Loans (if any) outstanding
immediately before such Facility B Syndicated Borrowing.
SECTION 2.03. Money Market Loans. (a) (i) In addition to making
Facility A Syndicated Borrowings, the Borrower may, as set forth in this
Section, request the Banks to make offers to make Facility A Money Market
Loans to the Borrower. The Banks may, but shall have no obligation to,
make such offers and the Borrower may, but shall have no obligation to,
accept any such offers in the manner set forth in this Section, provided
that:
(A) there may be no more than 10 different Interest
Periods for both Euro-Dollar Loans and Money Market Loans
outstanding at the same time (for which purpose Interest
Periods described in different numbered clauses of the
definition of the term "Interest Period" shall be deemed to
be different Interest Periods even if they are coterminous);
and
(B) the aggregate principal amount of all Facility A
Money Market Loans, together with the aggregate principal
amount of all Facility A Syndicated Loans, at any one time
outstanding shall not exceed the aggregate amount of the
Facility A Commitments of all of the Banks at such time.
(ii) When the Borrower wishes to request offers to make Facility
A Money Market Loans, it shall give the Agent (which shall promptly notify
the Banks) notice substantially in the form of Exhibit E-1 hereto (a
"Facility A Money Market Quote Request") so as to be received no later than
11:00 A.M. (Atlanta, Georgia time) one Domestic Business Day prior to the
date of the Facility A Money Market Borrowing proposed therein (or such
other time and date as the Borrower and the Agent, with the consent of the
Required Banks, may agree), specifying:
(A) the proposed date of such Facility A Money Market
Borrowing, which shall be a Domestic Business Day (the
"Facility A Quotation Date");
(B) the aggregate amount of such Facility A Money
Market Borrowing, which shall be at least $5,000,000 (and in
larger multiples of $1,000,000) but shall not cause the
limits specified in Section 2.03(a)(i) to be violated; and
(C) the duration of the Interest Period applicable
thereto, which shall be 7 to 180 days.
The Borrower may request offers to make Facility A Money Market
Loans for up to three different Interest Periods in a single Facility A
Money Market Quote Request; provided that the request for each separate
Interest Period shall be deemed to be a separate Facility A Money Market
Quote Request for a separate Facility A Money Market Borrowing. Except as
otherwise provided in the immediately preceding sentence, the Borrower
shall not deliver a Facility A Money Market Quote Request more frequently
than once every 3 Domestic Business Days.
(iii) (A) Each Bank may, but shall have no obligation to,
submit a Facility A Money Market Quote containing an offer to make a
Facility A Money Market Loan in response to any Facility A Money Market
Quote Request; provided that, if the Borrower's request under Section
2.03(a)(ii) specified more than one Interest Period, such Bank may, but
shall have no obligation to, make a single submission containing a separate
offer for each such Interest Period and each such separate offer shall be
deemed to be a separate Facility A Money Market Quote. Each Facility A
Money Market Quote must be submitted to the Agent not later than 10:00 A.M.
(Atlanta, Georgia time) on the Facility A Quotation Date (or such other
time and date as the Borrower and the Agent, with the consent of the
Required Banks, may agree); provided that any Facility A Money Market Quote
submitted by Wachovia may be submitted, and may only be submitted, if
Wachovia notifies the Borrower of the terms of the offer contained therein
not later than 9:45 A.M. (Atlanta, Georgia time) on the Facility A
Quotation Date. Subject to Section 6.01, any Facility A Money Market Quote
so made shall be irrevocable except with the written consent of the Agent
given on the instructions of the Borrower.
(B) Each Facility A Money Market Quote shall be in
substantially the form of Exhibit F-1 hereto and shall
specify:
(1) the proposed date of the Facility A
Money Market Borrowing and the duration of the
Interest Period therefor, which shall be 7 to 180
days;
(2) the maximum principal amount of the
Facility A Money Market Loan which the quoting
Bank is willing to make for the applicable
Interest Period, which principal amount (x) may be
greater than or less than the Facility A
Commitment of the quoting Bank, (y) shall be at
least $5,000,000 or a larger multiple of
$1,000,000, and (z) may not exceed the principal
amount of the Facility A Money Market Borrowing
for which offers were requested;
(3) the rate of interest per annum (rounded,
if necessary, to the nearest 1/100th of 1%) (the
"Facility A Money Market Rate") offered for each
such Facility A Money Market Loan; and
(4) the identity of the quoting Bank.
Unless otherwise agreed by the Agent and the Borrower, no Facility A Money
Market Quote shall contain qualifying, conditional or similar language or
propose terms other than or in addition to those set forth in the
applicable Facility A Money Market Quote Request (other than setting forth
the maximum principal amount of the Facility A Money Market Loan which the
quoting Bank is willing to make for the applicable Interest Period).
(iv) The Agent shall as promptly as practicable after the
Facility A Money Market Quote is submitted (but in any event not later than
10:30 A.M. (Atlanta, Georgia time)) notify the Borrower of the terms (i) of
any Facility A Money Market Quote submitted by a Bank that is in accordance
with Section 2.03(a)(iii) and (ii) of any Facility A Money Market Quote
that amends, modifies or is otherwise inconsistent with a previous Facility
A Money Market Quote submitted by such Bank with respect to the same
Facility A Money Market Quote Request. Any such subsequent Facility A
Money Market Quote shall be disregarded by the Agent unless such subsequent
Facility A Money Market Quote is submitted solely to correct a manifest
error in such former Facility A Money Market Quote. The Agent's notice to
the Borrower shall specify (A) the maximum aggregate principal amount of
the Facility A Money Market Borrowing for which offers have been received
and (B) the maximum principal amount and Facility A Money Market Rates so
offered by each Bank (identifying the Bank that made each Facility A Money
Market Quote).
(v) Not later than 11:00 A.M. (Atlanta, Georgia time) on the
Facility A Quotation Date (or such other time and date as the Borrower and
the Agent, with the consent of the Required Banks, may agree), the Borrower
shall notify the Agent of its acceptance or nonacceptance of the offers so
notified to it pursuant to Section 2.03(a)(iv) and the Agent shall promptly
notify each Bank that has submitted a Facility A Money Market Quote. In
the case of acceptance, such notice shall specify the aggregate principal
amount of offers for each Interest Period that are accepted. The Borrower
may accept any Facility A Money Market Quote in whole or in part (provided
that any Facility A Money Market Quote accepted in part from any Bank shall
not be less than the amount set forth in the Facility A Money Market Quote
of such Bank as the minimum principal amount of the Facility A Money Market
Loan such Bank was willing to make for the applicable Interest Period);
provided that:
(A) the aggregate principal amount of each Facility A
Money Market Borrowing may not exceed the applicable amount
set forth in the related Facility A Money Market Quote
Request;
(B) the aggregate principal amount of each Facility A
Money Market Borrowing shall be at least $5,000,000 (and in
larger multiples of $1,000,000) but shall not cause the
limits specified in Section 2.03(a)(i) to be violated;
(C) acceptance of offers may only be made in ascending
order of Facility A Money Market Rates; and
(D) the Borrower may not accept any offer where the
Agent has advised the Borrower that such offer fails to
comply with Section 2.03(a)(iii)(A) or otherwise fails to
comply with the requirements of this Agreement (including,
without limitation, Section 2.03(a)(i)).
If offers are made by two or more Banks with the same Facility A Money
Market Rates for a greater aggregate principal amount than the amount in
respect of which offers are accepted for the related Interest Period, the
principal amount of Facility A Money Market Loans in respect of which such
offers are accepted shall be allocated by the Borrower among such Banks as
nearly as possible (in multiples of $100,000) in proportion to the
aggregate principal amount of such offers. Determinations by the Borrower
of the amounts of Facility A Money Market Loans shall be conclusive in the
absence of manifest error.
(vi) Any Bank whose offer to make any Facility A Money Market
Loan has been accepted shall, not later than 12:00 P.M. (Atlanta, Georgia
time) on the Facility A Quotation Date, make the amount of such Facility A
Money Market Loan available to the Agent at its address referred to in
Section 9.01 in immediately available funds. The amount so received by the
Agent shall, subject to the terms and conditions of this Agreement, be made
available to the Borrower on such date by depositing the same, in
immediately available funds, in an account of such Borrower maintained with
Wachovia.
(b) (i) In addition to making Facility B Syndicated Borrowings,
the Borrower may, as set forth in this Section, request the Banks to make
offers to make Facility B Money Market Loans to the Borrower. The Banks
may, but shall have no obligation to, make such offers and the Borrower
may, but shall have no obligation to, accept any such offers in the manner
set forth in this Section, provided that:
(A) there may be no more than 10 different Interest
Periods for both Syndicated Loans and Money Market Loans
outstanding at the same time (for which purpose Interest
Periods described in different numbered clauses of the
definition of the term "Interest Period" shall be deemed to
be different Interest Periods even if they are coterminous);
and
(B) the aggregate principal amount of all Facility B
Money Market Loans, together with the aggregate principal
amount of all Facility B Syndicated Loans, at any one time
outstanding shall not exceed the aggregate amount of the
Facility B Commitments of all of the Banks at such time.
(ii) When the Borrower wishes to request offers to make Facility
B Money Market Loans, it shall give the Agent (which shall promptly notify
the Banks) notice substantially in the form of Exhibit E-2 hereto (a
"Facility B Money Market Quote Request") so as to be received no later than
11:00 A.M. (Atlanta, Georgia time) one Domestic Business Day prior to the
date of the Facility B Money Market Borrowing proposed therein (or such
other time and date as the Borrower and the Agent, with the consent of the
Required Banks, may agree), specifying:
(A) the proposed date of such Facility B Money Market
Borrowing, which shall be a Domestic Business Day (the
"Facility B Quotation Date");
(B) the aggregate amount of such Facility B Money
Market Borrowing, which shall be at least $5,000,000 (and in
larger multiples of $1,000,000) but shall not cause the
limits specified in Section 2.03(b)(i) to be violated; and
(C) the duration of the Interest Period applicable
thereto, which shall be 7 to 180 days.
The Borrower may request offers to make Facility B Money Market
Loans for up to three different Interest Periods in a single Facility B
Money Market Quote Request; provided that the request for each separate
Interest Period shall be deemed to be a separate Facility B Money Market
Quote Request for a separate Facility B Money Market Borrowing. Except as
otherwise provided in the immediately preceding sentence, the Borrower
shall not deliver a Facility B Money Market Quote Request more frequently
than once every 3 Domestic Business Days.
(iii) (A) Each Bank may, but shall have no obligation to,
submit a Facility B Money Market Quote containing an offer to make a
Facility B Money Market Loan in response to any Facility B Money Market
Quote Request; provided that, if the Borrower's request under Section
2.03(b)(ii) specified more than one Interest Period, such Bank may, but
shall have no obligation to, make a single submission containing a separate
offer for each such Interest Period and each such separate offer shall be
deemed to be a separate Facility B Money Market Quote. Each Facility B
Money Market Quote must be submitted to the Agent not later than 10:00 A.M.
(Atlanta, Georgia time) on the Facility B Quotation Date (or such other
time and date as the Borrower and the Agent, with the consent of the
Required Banks, may agree); provided that any Facility B Money Market Quote
submitted by Wachovia may be submitted, and may only be submitted, if
Wachovia notifies the Borrower of the terms of the offer contained therein
not later than 9:45 A.M. (Atlanta, Georgia time) on the Facility B
Quotation Date. Subject to Section 6.01, any Facility B Money Market Quote
so made shall be irrevocable except with the written consent of the Agent
given on the instructions of the Borrower.
(B) Each Facility B Money Market Quote shall be in
substantially the form of Exhibit F-2 hereto and shall
specify:
(1) the proposed date of the Facility B
Money Market Borrowing and the duration of the
Interest Period therefor, which shall be 7 to 180
days;
(2) the maximum principal amount of the
Facility B Money Market Loan which the quoting
Bank is willing to make for the applicable
Interest Period, which principal amount (x) may be
greater than or less than the Facility B
Commitment of the quoting Bank, (y) shall be at
least $5,000,000 or a larger multiple of
$1,000,000, and (z) may not exceed the principal
amount of the Facility B Money Market Borrowing
for which offers were requested;
(3) the rate of interest per annum (rounded,
if necessary, to the nearest 1/100th of 1%) (the
"Facility B Money Market Rate") offered for each
such Facility B Money Market Loan; and
(4) the identity of the quoting Bank.
Unless otherwise agreed by the Agent and the Borrower, no Facility B Money
Market Quote shall contain qualifying, conditional or similar language or
propose terms other than or in addition to those set forth in the
applicable Facility B Money Market Quote Request (other than setting forth
the maximum principal amount of the Facility B Money Market Loan which the
quoting Bank is willing to make for the applicable Interest Period).
(iv) The Agent shall as promptly as practicable after the
Facility B Money Market Quote is submitted (but in any event not later than
10:30 A.M. (Atlanta, Georgia time)) notify the Borrower of the terms (i) of
any Facility B Money Market Quote submitted by a Bank that is in accordance
with Section 2.03(b)(iii) and (ii) of any Facility B Money Market Quote
that amends, modifies or is otherwise inconsistent with a previous Facility
B Money Market Quote submitted by such Bank with respect to the same
Facility B Money Market Quote Request. Any such subsequent Facility B
Money Market Quote shall be disregarded by the Agent unless such subsequent
Facility B Money Market Quote is submitted solely to correct a manifest
error in such former Facility B Money Market Quote. The Agent's notice to
the Borrower shall specify (A) the maximum aggregate principal amount of
the Facility B Money Market Borrowing for which offers have been received
and (B) the maximum principal amount and Facility B Money Market Rates so
offered by each Bank (identifying the Bank that made each Facility B Money
Market Quote).
(v) Not later than 11:00 A.M. (Atlanta, Georgia time) on the
Facility B Quotation Date (or such other time and date as the Borrower and
the Agent, with the consent of the Required Banks, may agree), the Borrower
shall notify the Agent of its acceptance or nonacceptance of the offers so
notified to it pursuant to Section 2.03(b)(iv) and the Agent shall promptly
notify each Bank that has submitted a Facility B Money Market Quote. In
the case of acceptance, such notice shall specify the aggregate principal
amount of offers for each Interest Period that are accepted. The Borrower
may accept any Facility B Money Market Quote in whole or in part (provided
that any Facility B Money Market Quote accepted in part from any Bank shall
not be less than the amount set forth in the Facility B Money Market Quote
of such Bank as the minimum principal amount of the Facility B Money Market
Loan such Bank was willing to make for the applicable Interest Period);
provided that:
(A) the aggregate principal amount of each Facility B
Money Market Borrowing may not exceed the applicable amount
set forth in the related Facility B Money Market Quote
Request;
(B) the aggregate principal amount of each Facility B
Money Market Borrowing shall be at least $5,000,000 (and in
larger multiples of $1,000,000) but shall not cause the
limits specified in Section 2.03(b)(i) to be violated;
(C) acceptance of offers may only be made in ascending
order of Facility B Money Market Rates; and
(D) the Borrower may not accept any offer where the
Agent has advised the Borrower that such offer fails to
comply with Section 2.03(b)(iii)(A) or otherwise fails to
comply with the requirements of this Agreement (including,
without limitation, Section 2.03(b)(i)).
If offers are made by two or more Banks with the same Facility B Money
Market Rates for a greater aggregate principal amount than the amount in
respect of which offers are accepted for the related Interest Period, the
principal amount of Facility B Money Market Loans in respect of which such
offers are accepted shall be allocated by the Borrower among such Banks as
nearly as possible (in multiples of $100,000) in proportion to the
aggregate principal amount of such offers. Determinations by the Borrower
of the amounts of Facility B Money Market Loans shall be conclusive in the
absence of manifest error.
(vi) Any Bank whose offer to make any Facility B Money Market
Loan has been accepted shall, not later than 12:00 P.M. (Atlanta, Georgia
time) on the Facility B Quotation Date, make the amount of such Facility B
Money Market Loan available to the Agent at its address referred to in
Section 9.01 in immediately available funds. The amount so received by the
Agent shall, subject to the terms and conditions of this Agreement, be made
available to the Borrower on such date by depositing the same, in
immediately available funds, in an account of such Borrower maintained with
Wachovia.
SECTION 2.04. Notes. (a) The Facility A Syndicated Loans of
each Bank shall be evidenced by a single Facility A Syndicated Note payable
to the order of such Bank for the account of its Lending Office in an
amount equal to the original principal amount of such Bank's Facility A
Commitment.
(b) The Facility B Syndicated Loans of each Bank shall be
evidenced by a single Facility B Syndicated Note payable to the order of
such Bank for the account of its Lending Office in an amount equal to the
original principal amount of such Bank's Facility B Commitment.
(c) The Facility A Money Market Loans made by any Bank to the
Borrower shall be evidenced by a single Facility A Money Market Note
payable to the order of such Bank for the account of its Lending Office.
(d) The Facility B Money Market Loans made by any Bank to the
Borrower shall be evidenced by a single Facility B Money Market Note
payable to the order of such Bank for the account of its Lending Office.
(e) Upon receipt of each Bank's Notes pursuant to Section 3.01,
the Agent shall deliver such Notes to such Bank. Each Bank shall record,
and prior to any transfer of its Notes shall endorse on the schedule
forming a part thereof appropriate notations to evidence, the date, amount
and maturity of, and effective interest rate for, each Loan made by it
endorsed by such Note, the date and amount of each payment of principal
made by the Borrower with respect thereto and whether, in the case of such
Bank's Syndicated Notes, such Syndicated Loan evidenced by such Note is a
Base Rate Loan or Euro-Dollar Loan, and such schedule shall constitute
rebuttable presumptive evidence of the principal amount owing and unpaid on
such Bank's Notes; provided that the failure of any Bank to make, or any
error in making, any such recordation or endorsement shall not affect the
obligation of the Borrower hereunder or under the Notes or the ability of
any Bank to assign its Notes. Each Bank is hereby irrevocably authorized
by the Borrower so to endorse its Notes and to attach to and make a part of
any Note a continuation of any such schedule as and when required.
SECTION 2.05. Maturity of Loans. (a) Each Facility A Loan
included in any Facility A Borrowing shall mature, and the principal amount
thereof shall be due and payable, on the last day of the Interest Period
applicable to such Facility A Borrowing.
(b) Each Facility B Loan included in any Facility B Borrowing
shall mature, and the principal amount thereof shall be due and payable, on
the last day of the Interest Period applicable to such Facility B
Borrowing.
(c) Upon written request of the Borrower, which shall be in
writing and delivered to the Agent on a Domestic Business Day not more than
60, nor fewer than 45, days prior to the then effective Facility B
Conversion Date, the Banks and the Agent in their sole and absolute
discretion may (but shall not be obligated to) extend the then effective
Facility B Conversion Date for a period of 364 days; provided that in no
event shall the Facility B Conversion Date be extended to a date later than
the Facility B Termination Date. In connection with any such extension
request, each Bank shall undertake a bona fide credit analysis of the
Borrower utilizing current information on the financial condition of the
Borrower and trends in the financial performance of the Borrower and in the
industry or industries in which the Borrower operates. The terms of any
extension of the Facility B Conversion Date shall be independently
negotiated among the Borrower, the Banks and the Agent at the time of the
extension request, provided that the terms of the extension may be the same
as those in effect prior to any extension should the Borrower, the Banks
and the Agent so agree; provided, further, that should the terms of the
extension be other than those in effect prior to the extension, then the
Loan Documents shall be amended to the extent necessary to incorporate any
such different terms. In the event that a Bank chooses to extend the
Facility B Conversion Date for such a 364 day period, notice shall be given
by such Bank to the Borrower and the Agent not more than 30, nor fewer than
15, days prior to the then effective Facility B Conversion Date; provided
that the Facility B Conversion Date shall not be extended with respect to
any of the Banks unless the Required Banks are willing to extend the
Facility B Conversion Date and either (i) the remaining Banks shall on the
Facility B Conversion Date (prior to its extension hereunder) purchase
ratable assignments (without any obligation to do so) from each Bank (a
"Terminating Bank") that has not elected to extend the Facility B
Conversion Date (in the form of an Assignment and Acceptance) of the
Terminating Bank's Commitments in accordance with their respective
percentage of the remaining aggregate amount of the Commitments; provided
that such remaining Banks shall be provided such opportunity (which
opportunity shall allow such Banks at least five Domestic Business Days in
which to make a decision) prior to the Borrower finding another bank
pursuant to the immediately succeeding clause (ii); and provided, further,
that should any of the remaining Banks elect not to purchase such an
assignment, then such other remaining Banks shall be entitled to purchase
an assignment on the Facility B Conversion Date (prior to its extension
hereunder) from any Terminating Bank which includes the ratable interest
that was otherwise available to such non-purchasing remaining Bank or
Banks, as the case may be, (ii) the Borrower shall find another bank or
banks, as the case may be, acceptable to the Agent, willing to accept an
assignment from any such Terminating Bank effective on the Facility B
Conversion Date (prior to its extension hereunder) (in the form of an
Assignment and Acceptance) in an amount equal to the Commitments of any
such Terminating Banks or (iii) the Borrower shall reduce the aggregate
amount of the Commitments effective on the Facility B Conversion Date
(prior to its extension hereunder) in an amount equal to the Commitments of
any such Terminating Banks.
SECTION 2.06. Interest Rates. (a) "Applicable Margin" shall be
determined quarterly based upon the ratio of Consolidated Debt to
Consolidated Total Capitalization (calculated as of the last day of each
Fiscal Quarter), as follows:
Facility A Facility B
Ratio of Consolidated Debt to Base Rate Euro-Dollar Euro-Dollar
Consolidated Total Capitalization Loans Loans Loans
Greater than or equal to .55 to 1.00 0% .300% .325%
Greater than or equal to .45 to 1.00
but less than .55 to 1.00 0% .185% .210%
Greater than or equal to .35 to 1.00
but less than .45 to 1.00 0% .150% .180%
Greater than or equal to .25 to 1.00
but less than .35 to 1.00 0% .125% .150%
Less than .25 to 1.00 0% .115% .130%
The Applicable Margin shall be determined effective as of the date which is
60 days after the last day of the Fiscal Quarter as of the end of which the
foregoing ratio is being determined (the "Rate Determination Date"), based
on the quarterly financial statements for such Fiscal Quarter, and the
Applicable Margin so determined shall remain effective from such Rate
Determination Date until the next succeeding Rate Determination Date;
provided that (i) for the period from and including the Closing Date to but
excluding the Rate Determination Date next following the Closing Date, the
Applicable Margin shall be (A) 0% for Base Rate Loans, (B) .150% for
Facility A Loans that are Euro-Dollar Loans, and (C) .180% for Facility B
Loans that are Euro-Dollar Loans, (ii) in the case of any Applicable Margin
determined for the fourth and final Fiscal Quarter of a Fiscal Year, the
Rate Determination Date shall be the date which is 105 days after the last
day of such final Fiscal Quarter and such Applicable Margin shall be
determined based upon the annual audited financial statements for the
Fiscal Year ended on the last day of such final Fiscal Quarter, and (iii)
if on any Rate Determination Date the Borrower shall have failed to deliver
to the Banks the financial statements required to be delivered pursuant to
Section 5.04(a) with respect to the Fiscal Quarter most recently ended
prior to such Rate Determination Date, then for the period beginning on
such Rate Determination Date and ending on the earlier of (A) the date on
which the Borrower shall deliver to the Banks the financial statements to
be delivered pursuant to Section 5.04(a) with respect to such Fiscal
Quarter or any subsequent Fiscal Quarter, or (B) the date on which the
Borrower shall deliver to the Banks annual financial statements required to
be delivered pursuant to Section 5.04(b) with respect to the Fiscal Year
which includes such Fiscal Quarter or any subsequent Fiscal Year, the
Applicable Margin shall be determined as if the ratio of Consolidated Debt
to Consolidated Total Capitalization were more than .55 to 1.00 at all
times during such period. Any change in the Applicable Margin on any Rate
Determination Date shall result in a corresponding change, effective on and
as of such Rate Determination Date, in the interest rate applicable to each
Syndicated Loan outstanding on such Rate Determination Date, provided that
(x) for Euro-Dollar Loans, changes in the Applicable Margin shall only be
effective for Interest Periods commencing on or after such Rate
Determination Date, and (y) no Applicable Margin shall be decreased
pursuant to this Section if a Default is in existence on such Rate
Determination Date, but shall be automatically decreased upon any cure or
waiver (given in accordance with Section 9.05(a)) of such Default.
(b) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made
until it becomes due, at a rate per annum equal to the Base Rate for such
day plus the Applicable Margin. Such interest shall be payable for each
Interest Period on the last day thereof. Any overdue principal of and, to
the extent permitted by applicable law, overdue interest on any Base Rate
Loan shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the Default Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the sum of the Applicable Margin plus the
applicable Adjusted London Interbank Offered Rate for such Interest Period;
provided that if any Euro-Dollar Loan shall, as a result of clause (1)(c)
of the definition of Interest Period, have an Interest Period of less than
one month, such Euro-Dollar Loan shall bear interest during such Interest
Period at the rate applicable to Base Rate Loans during such period. Such
interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than 3 months, at intervals of 3
months after the first day thereof. Any overdue principal of and, to the
extent permitted by applicable law, overdue interest on any Euro-Dollar
Loan shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the Default Rate.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained
(rounded upward, if necessary, to the next higher 1/100th of 1%) by
dividing (i) the applicable London Interbank Offered Rate for such Interest
Period by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Euro-Dollar
Loan means for the Interest Period of such Euro-Dollar Loan the rate per
annum determined on the basis of the rate for deposits in Dollars of
amounts equal or comparable to the principal amount of such Euro-Dollar
Loan offered for a term comparable to such Interest Period, which rate
appears on the display designated on Page "3750" of the Telerate Service
(or such other page as may replace page 3750 of that service or such other
service or services as may be nominated by the British Banker's Association
for the purpose of displaying London Interbank Offered Rates for U.S.
dollar deposits) determined as of 1:00 p.m. New York City time, 2 Euro-
Dollar Business Days prior to the first day of such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member
bank of the Federal Reserve System in respect of "Eurocurrency liabilities"
(or in respect of any other category of liabilities which includes deposits
by reference to which the interest rate on Euro-Dollar Loans is determined
or any category of extensions of credit or other assets which includes
loans by a non-United States office of any Bank to United States
residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-
Dollar Reserve Percentage.
(d) Each Money Market Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the Money Market Rate for such Loan
quoted by the Bank making such Loan in accordance with Section 2.03. Such
interest shall be payable for such Interest Period on the last day thereof
and, if such Interest Period is longer than 90 days, at intervals of 90
days after the first day thereof. Any overdue principal of and, to the
extent permitted by law, overdue interest on any Money Market Loan shall
bear interest, payable on demand, for each day until paid at a rate per
annum equal to the Default Rate.
(e) The Agent shall determine each interest rate applicable to
the Loans hereunder. The Agent shall give prompt notice to the Borrower
and the Banks by telecopy of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(f) After the occurrence and during the continuance of a Default
(other than a Default under Section 6.01(a)), the principal amount of the
Loans (and, to the extent permitted by applicable law, all accrued interest
thereon) may, at the election of the Required Banks, bear interest at the
Default Rate.
SECTION 2.07. Fees. (a) The Borrower shall pay to the Agent for
the ratable account of each Bank a facility fee equal to the sum of (i) an
amount equal to the product of: (A) the aggregate of the daily average
amounts of such Bank's Facility A Commitment, times (B) a per annum
percentage equal to the Applicable Facility Fee Rate, plus (ii) an amount
equal to the product of: (A) the aggregate of the daily average amounts of
such Bank's Facility B Commitment, times (B) a per annum percentage equal
to the Applicable Facility Fee Rate. Such facility fee shall accrue from
and including the Closing Date to and including the Facility A Termination
Date (in the case of the Facility A Commitments) and the Facility B
Termination Date (in the case of the Facility B Commitments). Facility
fees shall be payable quarterly in arrears on the first Facility Fee
Payment Date following each Facility Fee Determination Date and on the
Facility A Termination Date (in the case of the Facility A Commitments) and
the Facility B Termination Date (in the case of the Facility B
Commitments); provided that should the Facility A Commitments be terminated
at any time prior to the Facility A Termination Date for any reason or the
Facility B Commitments be terminated at any time prior to the Facility B
Termination Date for any reason, the entire accrued and unpaid facility fee
shall be paid on the date of such termination. The "Applicable Facility
Fee Rate" shall be determined quarterly based upon the ratio of
Consolidated Debt to Consolidated Total Capitalization (calculated as of
the last day of each Fiscal Quarter) as follows:
Ratio of Consolidated Debt to Applicable Facility Fee
Applicable Facility Fee Rate for Rate for
Consolidated Total Capitalization Facility A Facility B
Commitments Commitments
Greater than or equal to .55 to 1.00 .150% .125%
Greater than or equal to .45 to 1.00
but less than .55 to 1.00 .115% .090%
Greater than or equal to .35 to 1.00
but less than .45 to 1.00 .100% .070%
Greater than or equal to .25 to 1.00
but less than .35 to 1.00 .075% .050%
Less than .25 to 1.00 .060% .045%
The Applicable Facility Fee Rate shall be determined effective as of the
date which is 60 days after the last day of the Fiscal Quarter as of the
end of which the foregoing ratio is being determined (the "Facility Fee
Determination Date"), based on the quarterly financial statements for such
Fiscal Quarter, and the Applicable Facility Fee Rate so determined shall
remain effective from such Facility Fee Determination Date until the next
succeeding Facility Fee Determination Date; provided that (i) for the
period from and including the Closing Date to but excluding the Facility
Fee Determination Date next following the Closing Date, the Applicable
Facility Fee Rate for Facility A Commitments shall be .100% and the
Applicable Facility Fee Rate for Facility B Commitments shall be .070%;
(ii) in the case of any Applicable Facility Fee Rate determined for the
fourth and final Fiscal Quarter of a Fiscal Year, the Facility Fee
Determination Date shall be the date which is 105 days after the last day
of such final Fiscal Quarter and such Applicable Facility Fee Rate shall be
determined based upon the annual audited financial statements for the
Fiscal Year ended on the last day of such final Fiscal Quarter, and (iii)
if on any Facility Fee Determination Date the Borrower shall have failed to
deliver to the Banks the financial statements required to be delivered
pursuant to Section 5.04(a) with respect to the Fiscal Quarter most
recently ended prior to such Facility Fee Determination Date, then for the
period beginning on such Facility Fee Determination Date and ending on the
earlier of (A) the date on which the Borrower shall deliver to the Banks
the financial statements to be delivered pursuant to Section 5.04(a) with
respect to such Fiscal Quarter or any subsequent Fiscal Quarter, and (B)
the date on which the Borrower shall deliver to the Banks annual financial
statements required to be delivered pursuant to Section 5.04(b) with
respect to the Fiscal Year which includes such Fiscal Quarter or any
subsequent Fiscal Year, the Applicable Facility Fee Rate shall be
determined as if the ratio of Consolidated Debt to Consolidated Total
Capitalization were more than .55 to 1.00 at all times during such period.
No applicable Facility Fee Rate shall be decreased pursuant to this Section
2.07 if a Default is in existence on such Facility Fee Determination Date,
but shall be automatically decreased upon any cure or waiver (given in
accordance with Section 9.05(a)) of such Default.
(b) The Borrower shall pay to the Agent, for the account and
sole benefit of the Agent, such fees and other amounts at such times as set
forth in the Agent's Letter Agreement.
SECTION 2.08. Optional Termination or Reduction of Commitments.
(a) The Borrower may, upon at least 3 Domestic Business Days' notice to the
Agent, terminate at any time, or proportionately reduce from time to time
by an aggregate amount of at least $10,000,000 or any larger multiple of
$5,000,000, the Facility A Commitments. If the Facility A Commitments are
terminated in their entirety, all accrued fees (as provided under
Section 2.07) on such Facility A Commitments shall be payable on the
effective date of such termination.
(a) The Borrower may, upon at least 3 Domestic Business Days'
notice to the Agent, terminate at any time, or proportionately reduce from
time to time by an aggregate amount of at least $10,000,000 or any larger
multiple of $5,000,000, the Facility B Commitments. If the Facility B
Commitments are terminated in their entirety, all accrued fees (as provided
under Section 2.07) on such Facility B Commitments shall be payable on the
effective date of such termination.
SECTION 2.09. Mandatory Termination or Reduction of Commitments.
(a) The Facility A Commitments shall terminate on the Facility A
Termination Date and any Facility A Loans then outstanding (together with
accrued interest thereon) shall be due and payable on such date.
(b) The Facility B Commitments shall terminate on the Facility B
Termination Date and any Facility B Loans then outstanding (together with
accrued interest thereon) shall be due and payable on such date.
(c) On the Facility B Conversion Date there shall be a mandatory
pro rata reduction of the Facility B Commitments to an aggregate amount
equal to the aggregate principal amount of all Facility B Loans outstanding
on the Facility B Conversion Date.
(d) If after the Facility B Conversion Date the Borrower shall
repay or prepay any Facility B Loans other than with the proceeds of a new
Facility B Borrowing, then there shall be a mandatory reduction of the
Facility B Commitments to an aggregate amount equal to the aggregate
principal amount of all facility B Loans then outstanding (after giving
effect to such repayment or prepayment).
SECTION 2.10. Optional Prepayments. (a) The Borrower may, upon
at least 1 Domestic Business Day's notice to the Agent, prepay any Base
Rate Borrowing in whole at any time, or from time to time in part in
amounts aggregating at least $1,000,000 or any larger multiple of $500,000,
by paying the principal amount to be prepaid together with accrued interest
thereon to the date of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Base Rate Loans of the several Banks included
in such Base Rate Borrowing.
(b) The Borrower may, upon notice provided by the Borrower to
the Agent prior to 1:00 P.M. (Atlanta, Georgia time) on the Euro-Dollar
Business Day prior to the date of the prepayment of a Euro-Dollar
Borrowing, prepay any Euro-Dollar Borrowing in whole at any time, or from
time to time in part in amounts aggregating at least $5,000,000 or any
larger multiple of $1,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment and any
and all amounts as provided under Section 8.05 in connection with such
prepayment. Each such optional prepayment shall be applied to prepay
ratably the Euro-Dollar Loans of the several Banks included in such Euro-
Dollar Borrowing.
(c) The Borrower may, upon notice provided by the Borrower to
the Agent prior to 1:00 P.M. (Atlanta, Georgia time) on the Domestic
Business Day prior to the date of the prepayment of a Money Market
Borrowing, prepay any Money Market Borrowing in whole at any time, or from
time to time in part in amounts aggregating at least $5,000,000 or any
larger multiple of $1,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment and any
and all amounts as provided under Section 8.05 in connection with such
prepayment. Each such optional prepayment shall be applied to prepay
ratably the Money Market Loans of the several Banks included in such Money
Market Borrowing.
(d) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof
and of such Bank's ratable share of such prepayment and such notice shall
not thereafter be revocable by the Borrower.
SECTION 2.11. Mandatory Prepayments. On each date on which the
Commitments are reduced pursuant to Section 2.08 or Section 2.09, the
Borrower shall repay or prepay such principal amount of the outstanding
Loans, if any (together with interest accrued thereon and any amounts due
under Section 8.05(a)), as may be necessary so that after such payment (i)
the aggregate unpaid principal amount of the Facility A Loans does not
exceed the aggregate amount of the Facility A Commitments as then reduced
and (ii) the aggregate unpaid principal amount of the Facility B Loans does
not exceed the aggregate amount of the Facility B Commitments as then
reduced. Each such payment or prepayment shall be applied to repay or
prepay ratably the Facility A Loans or Facility B Loans (as appropriate) of
the several Banks; provided that such prepayment shall be applied, first,
to Facility A Syndicated Loans or Facility B Syndicated Loans (as
appropriate) outstanding on the date of such prepayment (in direct order of
maturity) and then, to the extent necessary, to Facility A Money Market
Loans or Facility B Money Market Loans (as appropriate) outstanding on the
date of such prepayment (in direct order of maturity).
SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the
Loans and of facility fees hereunder, not later than 11:00 A.M. (Atlanta,
Georgia time) on the date when due, in Federal or other funds immediately
available in Atlanta, Georgia, to the Agent at its address referred to in
Section 9.01. The Agent will promptly distribute to each Bank its ratable
share of each such payment received by the Agent for the account of the
Banks.
(b) Whenever any payment of principal of, or interest on, the
Base Rate Loans or the Money Market Loans or of fees shall be due on a day
which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever any
payment of principal of, or interest on, the Euro-Dollar Loans shall be due
on a day which is not a Euro-Dollar Business Day, the date for payment
thereof shall be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding Euro-
Dollar Business Day. If the date for any payment of principal is extended
by operation of law or otherwise, interest thereon shall be payable for
such extended time.
(c) All payments of principal, interest and fees and all other
amounts to be made by the Borrower pursuant to this Agreement with respect
to any Loan or fee relating thereto shall be paid without deduction for,
and free from, any tax, imposts, levies, duties, deductions, or
withholdings of any nature now or at anytime hereafter imposed by any
governmental authority or by any taxing authority thereof or therein
excluding in the case of each Bank, taxes imposed on or measured by its net
income, and franchise taxes imposed on it, by the jurisdiction under the
laws of which such Bank is organized or any political subdivision thereof
and, in the case of each Bank, taxes imposed on its income, and franchise
taxes imposed on it, by the jurisdiction of such Bank's applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
imposts, levies, duties, deductions or withholdings of any nature being
"Taxes"). In the event that the Borrower is required by applicable law to
make any such withholding or deduction of Taxes with respect to any Loan or
fee or other amount, the Borrower shall pay such deduction or withholding
to the applicable taxing authority, shall promptly furnish to any Bank in
respect of which such deduction or withholding is made all receipts and
other documents evidencing such payment and shall pay to such Bank
additional amounts as may be necessary in order that the amount received by
such Bank after the required withholding or other payment shall equal the
amount such Bank would have received had no such withholding or other
payment been made. If no withholding or deduction of Taxes are payable in
respect of any Loan or fee relating thereto, the Borrower shall furnish any
Bank, at such Bank's request, a certificate from each applicable taxing
authority or an opinion of counsel acceptable to such Bank, in either case
stating that such payments are exempt from or not subject to withholding or
deduction of Taxes. If the Borrower fails to provide such original or
certified copy of a receipt evidencing payment of Taxes or certificate(s)
or opinion of counsel of exemption, the Borrower hereby agrees to
compensate such Bank for, and indemnify them with respect to, the tax
consequences of the Borrower's failure to provide evidence of tax payments
or tax exemption.
Each Bank that is organized under the laws of any jurisdiction other
than the United States of America or any state thereof (including the
District of Columbia) agrees to furnish to the Borrower and the Agent,
prior to the time it becomes a Bank hereunder, two copies of either U.S.
Internal Revenue Service Form 4224 or U.S. Internal Revenue Service Form
1001 or any successor forms thereto (wherein such Bank claims entitlement
to complete exemption from or reduced rate of U.S. Federal withholding tax
on interest paid by the Borrower hereunder) and to provide to the Borrower
and the Agent a new Form 4224 or Form 1001 or any successor forms thereto
if any previously delivered form is found to be incomplete or incorrect in
any material respect or upon the obsolescence of any previously delivered
form; provided, however, that no Bank shall be required to furnish a form
under this paragraph after the date that it becomes a Bank hereunder if it
is not entitled to claim an exemption from or a reduced rate of withholding
under applicable law.
In the event any Bank receives a refund of any Taxes paid by the
Borrower pursuant to this Section 2.12, it will pay to the Borrower the
amount of such refund promptly upon receipt thereof; provided, however, if
at any time thereafter it is required to return such refund, the Borrower
shall promptly repay to it the amount of such refund.
Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.12 shall be applicable with respect to any
Participant, Assignee or other Transferee, and any calculations required by
such provisions (i) shall be made based upon the circumstances of such
Participant, Assignee or other Transferee, and (ii) constitute a continuing
agreement and shall survive the termination of this Agreement and the
payment in full or cancellation of the Notes.
SECTION 2.13. Computation of Interest and Fees. Interest on
Loans shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed, calculated as to each Interest Period from
and including the first day thereof to but excluding the last day thereof.
Any fees payable hereunder shall be computed on the basis of a year of 360
days and paid for the actual number of days elapsed (including the first
day but excluding the last day).
ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. Conditions to First Borrowing. The obligation of
each Bank to make a Loan on the occasion of the first Borrowing is subject
to the satisfaction of the conditions set forth in Section 3.02 and the
following additional conditions:
(a) receipt by the Agent from each of the parties hereto of
either (i) a duly executed counterpart of this Agreement signed by such
party or (ii) a facsimile transmission stating that such party has duly
executed a counterpart of this Agreement and sent such counterpart to the
Agent;
(b) receipt by the Agent of duly executed Syndicated Notes and
duly executed Money Market Notes for the account of each Bank complying
with the provisions of Section 2.04;
(c) receipt by the Agent of an opinion (together with any
opinions of local counsel relied on therein) of McDermott, Will & Emery,
counsel for the Borrower, dated as of the Closing Date, substantially in
the form of Exhibit C hereto and covering such additional matters relating
to the transactions contemplated hereby as the Agent or any Bank may
reasonably request;
(d) receipt by the Agent of an opinion of Womble Carlyle
Sandridge & Rice, PLLC, special counsel for the Agent, dated as of the
Closing Date, substantially in the form of Exhibit D hereto and covering
such additional matters relating to the transactions contemplated hereby as
the Agent may reasonably request;
(e) receipt by the Agent of a certificate (the "Closing
Certificate"), dated the date of the first Borrowing, substantially in the
form of Exhibit G hereto, signed by a principal financial officer of the
Borrower, to the effect that (i) no Default has occurred and is continuing
on the date of the first Borrowing and (ii) the representations and
warranties of the Borrower contained in Article IV are true on and as of
the date of the first Borrowing hereunder;
(f) receipt by the Agent of all documents which the Agent or any
Bank may reasonably request relating to the existence of the Borrower, the
corporate authority for and the validity of this Agreement and the Notes,
and any other matters relevant hereto, all in form and substance
satisfactory to the Agent, including without limitation a certificate of
incumbency of the Borrower (the "Officer's Certificate"), signed by the
Secretary or an Assistant Secretary of the Borrower, substantially in the
form of Exhibit H hereto, certifying as to the names, true signatures and
incumbency of the officer or officers of the Borrower authorized to execute
and deliver the Loan Documents, and certified copies of the following
items: (i) the Borrower's Articles of Incorporation, (ii) the Borrower's
Bylaws, (iii) a certificate of the Secretary of State of the State of
Wisconsin as to the good standing of the Borrower as a Wisconsin
corporation, and (iv) the action taken by the Board of Directors of the
Borrower authorizing the Borrower's execution, delivery and performance of
this Agreement, the Notes and the other Loan Documents to which the
Borrower is a party;
(g) receipt by the Agent of evidence satisfactory to it of
repayment in full of all Debt outstanding under the Existing Credit
Agreements and termination of the Existing Credit Agreements;
(h) receipt by the Agent of evidence satisfactory to it of
consummation of the Repap Acquisition upon the terms and conditions set
forth in the Repap Purchase Agreement; and
(i) receipt by the Agent of a Notice of Borrowing (in the case
of a Syndicated Borrowing) or a Money Market Quote Request (in the case of
a Money Market Borrowing).
SECTION 3.02. Conditions to All Borrowings. The obligation of
each Bank to make a Loan on the occasion of each Borrowing is subject to
the satisfaction of the following conditions:
(a) either (i) receipt by the Agent of Notice of Borrowing as
required by Section 2.02 (if such Borrowing is a Syndicated Borrowing), or
(ii) compliance with the provisions of Section 2.03 (if such Borrowing is a
Money Market Borrowing);
(b) the fact that, immediately before and after such Borrowing,
no Default shall have occurred and be continuing;
(c) the fact that the representations and warranties of the
Borrower contained in Article IV of this Agreement shall be true on and as
of the date of such Borrowing; and
(d) the fact that, immediately after such Borrowing (i) the
aggregate outstanding principal amount of the Facility A Syndicated Loans
of each Bank will not exceed the amount of its Facility A Commitment, (ii)
the aggregate outstanding principal amount of Facility B Syndicated Loans
of each Bank will not exceed the amount of its Facility B Commitment, (iii)
the aggregate outstanding principal amount of the Facility A Loans will not
exceed the aggregate amount of the Facility A Commitments of all of the
Banks as of such date, and (iv) the aggregate outstanding principal amount
of the Facility B Loans will not exceed the aggregate amount of the
Facility B Commitments of all of the Banks as of such date.
Each Borrowing hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Borrowing as to the truth and
accuracy of the facts specified in clauses (b), (c) and (d) of this
Section; provided that such Borrowing shall not be deemed to be such a
representation and warranty to the effect set forth in Section 4.04(b) as
to any event, act or condition having a Material Adverse Effect which has
theretofore been disclosed in writing by the Borrower to the Banks if (x)
the aggregate outstanding principal amount of the Facility A Loans
immediately after such Borrowing will not exceed the aggregate outstanding
principal amount of Facility A Loans immediately before such Borrowing, and
(y) the aggregate outstanding principal amount of the Facility B Loans
immediately after such Borrowing will not exceed the aggregate outstanding
principal amount of Facility B Loans immediately before such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Wisconsin, is duly qualified to transact business in
every jurisdiction where, by the nature of its business, the failure to be
so qualified could reasonably be expected to have a Material Adverse
Effect, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as
now conducted (except for such governmental licenses, authorizations,
consents and approvals the failure to have which could not reasonably be
expected to have a Material Adverse Effect).
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of
this Agreement, the Note and the other Loan Documents (i) are within the
Borrower's corporate powers, (ii) have been duly authorized by all
necessary corporate action, (iii) require no action by or in respect of, or
filing with, any governmental body, agency or official, (iv) do not
contravene, or constitute a default under, any provision of applicable law
or regulation (if the contravention thereof could reasonably be expected to
have a Material Adverse Effect) or of the certificate of incorporation or
by-laws of the Borrower or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Borrower or any of its
Subsidiaries, and (v) do not result in the creation or imposition of any
Lien on any asset of the Borrower or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid
and binding agreement of the Borrower enforceable in accordance with its
terms, and the Note and the other Loan Documents, when executed and
delivered in accordance with this Agreement, will constitute valid and
binding obligations of the Borrower enforceable in accordance with their
respective terms, provided that the enforceability hereof and thereof is
subject in each case to general principles of equity and to bankruptcy,
insolvency and similar laws affecting the enforcement of creditors' rights
generally.
SECTION 4.04. Financial Information. (a) The consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of
December 31, 1996, and the related consolidated statements of income,
shareholders' equity and cash flows for the Fiscal Year then ended,
reported on by Arthur Andersen LLP, copies of which have been delivered to
each of the Banks, and the unaudited consolidated financial statements of
the Borrower and its Consolidated Subsidiaries for the interim period ended
June 30, 1997, copies of which have been delivered to each of the Banks,
fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such dates and their consolidated results
of operations and cash flows for such periods stated.
(b) Since December 31, 1996, there has been no material adverse
change in the business, financial position or results of operations of the
Borrower and its Consolidated Subsidiaries, taken as a whole.
SECTION 4.05. Litigation. Except as disclosed on Schedule 4.05
hereto, there is no action, suit, proceeding or labor dispute pending, or
to the knowledge of the Borrower threatened, against or affecting the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which (except as disclosed in writing
to the Bank prior to the Closing Date) could have a Material Adverse
Effect, or which in any manner draws into question the validity of, or
could impair the ability of the Borrower to perform its obligations under,
this Agreement, the Notes or any of the other Loan Documents.
SECTION 4.06. Compliance with ERISA. (a) The Borrower and each
ERISA Affiliate have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in
compliance in all material respects with the presently applicable
provisions of ERISA and the Code, and have not incurred any liability to
the PBGC or a Plan under Title IV of ERISA.
(b) Neither the Borrower nor any ERISA Affiliate is or ever has
been obligated to contribute to any Multiemployer Plan.
SECTION 4.07. Taxes. There have been filed on behalf of the
Borrower and its Subsidiaries all Federal, state and local income, excise,
property and other tax returns which are required to be filed by them and
all taxes due pursuant to such returns or pursuant to any assessment
received by or on behalf of the Borrower or any Subsidiary have been paid.
The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of taxes or other governmental charges are adequate
under generally accepted accounting principles consistently applied.
United States income tax returns of the Borrower and its Subsidiaries have
been examined and closed through the Fiscal Year ended December 31, 1988.
SECTION 4.08. Subsidiaries. Each of the Borrower's Significant
Subsidiaries is a corporation or other legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, and has all corporate or other powers and
all governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted (except where the failure to have
such governmental licenses, authorizations, consents and approvals could
not reasonably be expected to have a Material Adverse Effect).
SECTION 4.09. Not an Investment Company. Neither the Borrower
nor any of its Subsidiaries is an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
SECTION 4.10. Ownership of Property; Liens. Each of the Borrower
and its Subsidiaries has title to its properties sufficient for the conduct
of its business, and none of such property is subject to any Lien except
for Permitted Encumbrances.
SECTION 4.11. No Default. Neither the Borrower nor any of its
Consolidated Subsidiaries is in default under or with respect to any
agreement, instrument or undertaking to which it is a party or by which it
or any of its property is bound, which default could reasonably be expected
to have a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 4.12. Full Disclosure. All information heretofore
furnished by the Borrower to the Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is,
and all such information hereafter furnished by the Borrower to the Agent
or any Bank will be, true, accurate and complete in every material respect
or based on reasonable estimates on the date as of which such information
is stated or certified. The Borrower has disclosed to the Banks in writing
any and all facts which materially and adversely affect or may affect (to
the extent the Borrower can now reasonably foresee), the business,
operations, properties, assets, or conditions (financial or otherwise) of
the Borrower and its Subsidiaries, taken as a whole, or the ability of the
Borrower to perform its obligations under this Agreement.
SECTION 4.13. Environmental Matters. (a) Neither the Borrower
nor any Subsidiary is subject to any Environmental Liability which is
likely to have a Material Adverse Effect, and, except as disclosed on
Schedule 4.13 hereto, neither the Borrower nor any Subsidiary has been
designated as a potentially responsible party under CERCLA or under any
state statute similar to CERCLA. Except as disclosed on Schedule 4.13
hereto, none of the Real Properties have been identified on any current or
proposed (i) National Priorities List under 40 C.F.R. Section 300, (ii)
CERCLIS list or (iii) any list arising from a state statute similar to
CERCLA.
(b) No Hazardous Materials have been or are being used,
produced, manufactured, processed, generated, stored, disposed of, managed
at, or shipped or transported to or from the Real Properties or are
otherwise present at, on, in or under the Real Properties, or, to the best
of the knowledge of the Borrower, at or from any adjacent site or facility,
except for Hazardous Materials used, produced, manufactured, processed,
generated, stored, disposed of, and managed in compliance with all
applicable Environmental Requirements, except where the failure to comply
with such Environmental Requirements could not reasonably be expected to
have a Material Adverse Effect.
(c) The Borrower, and each of its Subsidiaries and Affiliates,
has procured all Environmental Authorizations necessary for the conduct of
its business and is in compliance with all Environmental Requirements in
connection with the operation of the Real Properties and the Borrower's and
each of its Subsidiaries' and Affiliates' respective businesses, except
where the failure to obtain such Environmental Authorization or to comply
with such Environmental Requirements could not reasonably be expected to
have a Material Adverse Effect.
SECTION 4.14. Compliance with Laws. The Borrower and each
Subsidiary is in compliance with all applicable laws, except where any
failure to comply with any such laws would not, alone or in the aggregate,
have a Material Adverse Effect.
SECTION 4.15. Transactions with Affiliates. Neither the Borrower
nor any of its Subsidiaries has entered into, or is a party to, any
transaction with any Affiliate of the Borrower or such Subsidiary (which
Affiliate is not the Borrower or a Subsidiary), except as permitted by law
and which are on terms and conditions which are not less favorable to the
Borrower or such Subsidiary than would be obtained in a comparable arm's
length transaction with a Person which is not an Affiliate of the Borrower
or such Subsidiary.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Corporate Existence, etc. The Borrower will at
all times preserve and keep in full force and effect its corporate
existence. Subject to the provisions governing mergers, consolidations,
and sales and other dispositions of assets, the Borrower will at all times
preserve and keep in full force and effect the corporate existence of each
of its Subsidiaries (unless merged into the Borrower or a Subsidiary) and
all rights and franchises of the Borrower and its Subsidiaries unless the
termination of or failure to preserve and keep in full force and effect
such corporate existence, right or franchise would not, individually or in
the aggregate, have a Material Adverse Effect.
SECTION 5.02. Compliance with Laws; Payment of Taxes. (a) The
Borrower will, and will cause each of its Subsidiaries to, comply with
applicable laws (including but not limited to ERISA and Environmental
Requirements), regulations and similar requirements of governmental
authorities (including but not limited to PBGC) and will obtain and
maintain in effect all licenses, certificates, permits, franchises and
other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses,
except where the necessity of such compliance is being contested in good
faith through appropriate proceedings and except where noncompliance could
not reasonably be expected to have or cause a Material Adverse Effect.
(b) The Borrower will, and will cause each of its Subsidiaries
to, pay before they become delinquent all taxes,
assessments, governmental charges, claims for labor,
supplies, rent and other obligations which, if unpaid, might
become a lien against the property of the Borrower or any
Subsidiary, except
(i) liabilities being contested in good faith and in
appropriate proceedings, and in respect of which the
Borrower or a Subsidiary has established adequate
reserves therefor in accordance with GAAP on the books
of the Borrower or such Subsidiary or
(ii) the inadvertent nonpayment of all such taxes and
assessments if in the aggregate such nonpayment would
not reasonably be expected to have a Material Adverse
Effect.
SECTION 5.03. Environmental Notices. The Borrower shall furnish
to the Banks and the Agent prompt written notice of all material
Environmental Liabilities, pending, threatened or anticipated material
Environmental Proceedings, material Environmental Notices, Environmental
Judgments and Orders, and material Environmental Releases at, on, in, under
or in any way affecting the Real Properties or any adjacent property, and
all facts, events, or conditions that could reasonably be expected to lead
to any of the foregoing. For purposes of this provision, disclosure of
such matters by the Borrower in its filings with the Securities and
Exchange Commission shall constitute notice to the Banks and the Agent of
such matters.
SECTION 5.04. Financial and Business Information. The Borrower
shall deliver to each of the Banks:
(a) Quarterly Statements - within 60 days after the end of each
Fiscal Quarter (other than the last Fiscal Quarter of each
Fiscal Year), duplicate copies of
(i) a consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such Fiscal Quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Borrower and
its Subsidiaries, for such Fiscal Quarter and (in the
case of the second and third Fiscal Quarters) for the
portion of the Fiscal Year ending with such Fiscal
Quarter,
setting forth in each case in comparative form the figures
for the corresponding periods in the previous Fiscal Year,
all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position
of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from
year-end adjustments, provided that delivery within the time
period specified above of copies of the Borrower's Quarterly
Report on Form 10-Q prepared in compliance with the
requirements therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the
requirements of this subparagraph.
(b) Annual Statements - within 105 days after the end of each
Fiscal Year duplicate copies of
(i) a consolidated balance sheet of the Borrower and its
Subsidiaries, as at the end of such Fiscal Year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Borrower and
its Subsidiaries, for such Fiscal Year,
setting forth in each case in comparative form the figures
for the previous Fiscal Year, all in reasonable detail,
prepared in accordance with GAAP, and certified by, and
accompanied by an opinion thereon of, independent certified
public accountants of recognized national standing, which
certification shall be free of exceptions and qualifications
not acceptable to the Required Banks and which opinion shall
state that such financial statements present fairly, in all
material respects, the financial position of the companies
being reported upon and their results of operations and cash
flows and have been prepared in conformity with GAAP, and
that the examination of such accountants in connection with
such financial statements has been made in accordance with
generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the
circumstances, provided that the delivery within the time
period specified above of the Borrower's Annual Report on
Form 10-K for such fiscal year (together with the Borrower's
annual report to shareholders, if any, prepared pursuant to
Rule 14a-3 under the Securities Exchange Act of 1934, as
amended) prepared in accordance with the requirements
therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of
this subparagraph.
(c) SEC and Other Reports - promptly upon their becoming
available, one copy of
(i) each financial statement, report, notice or proxy
statement sent by the Borrower or any Subsidiary to
public securities holders generally, and
(ii) each regular or periodic report, each registration
statement that shall have become effective (without
exhibits except as expressly requested by a Bank), and
each final prospectus and all amendments thereto filed
by the Borrower or any Subsidiary with the Securities
and Exchange Commission.
(d) Notice of Default or Event of Default - promptly, and in any
event within five days after a Responsible Officer becomes
aware of the existence of any Default or Event of Default, a
written notice specifying the nature and period of existence
thereof and what action the Borrower is taking or proposes
to take with respect thereto.
(e) ERISA matters - promptly, and in any event within five
Business Days after a Responsible Officer becomes aware of
any of the following, a written notice setting forth the
nature thereof and the action, if any, that the Borrower or
any ERISA Affiliate proposed to take with respect thereto:
(i) with respect to any Plan, any reportable event, as
defined in section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been
waived pursuant to such regulations as in effect on the
date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of,
proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Borrower or
any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with
respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the
Borrower or any ERISA Affiliate pursuant to Title I or
IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans, or in the
imposition of any Lien on any of the rights, properties
or assets of the Borrower or any ERISA Affiliate
pursuant to title I or IV of ERISA or such penalty or
excise tax provisions.
(f) Requested Information - with reasonable promptness, such
other data and information relating to the business,
operations, affairs, financial condition, assets or
properties of the Borrower or any of its Subsidiaries or
relating to the ability of the Borrower to perform its
obligations under this Agreement and under the Notes as from
time to time may be reasonably requested by the Agent at the
request of any Bank.
(g) Each set of financial statements delivered to the Banks
pursuant to Section 5.04(b) shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(i) Covenant Compliance - the information (including
detailed calculations) required in order to establish
whether the Borrower was in compliance with the
requirements of Sections 5.08 and 5.09, inclusive,
during the Fiscal Quarter or the Fiscal Year covered by
the statements then being furnished (including with
respect to each such Section, where applicable, the
calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the
terms of such Sections, and the calculation of the
amount, ratio or percentage then in existence); and
(ii) Event of Default - a statement that such Senior
Financial Officer has reviewed the relevant terms
hereof and has made, or caused to be made, under his or
her supervision, a review of the transactions and
conditions of the Borrower and its Subsidiaries from
the beginning of the Fiscal Quarter or the Fiscal Year
covered by the statements then being furnished to the
date of the certificate and that such review shall not
have disclosed the existence during such period of any
condition or event that constitutes a Default or Event
of Default, or, if any such condition or event existed
or exists (including, without limitation, any such
event or condition resulting from the failure of the
Borrower or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of
existence thereof and what action the Borrower shall
have taken or proposes to take with respect thereto.
SECTION 5.05. Inspection of Property, Books and Records. The
Borrower will keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries in conformity
with generally accepted accounting principles shall be made of all dealings
and transactions in relation to its business and activities; and will
permit, and will cause each Subsidiary to permit, representatives of any
Bank at such Bank's expense prior to the occurrence of an Event of Default
and at the Borrower's expense after the occurrence of an Event of Default
to visit and inspect any of their respective properties, to examine and
make abstracts from any of their respective books and records and to
discuss their respective affairs, finances and accounts with their
respective officers, employees and independent public accountants (provided
that prior to the occurrence of any Default, a Bank shall only be permitted
to discuss such matters with such independent public accountants if a
representative of the Borrower is present and reasonable prior notice has
been given to the Borrower). The Borrower agrees to cooperate and assist
in such visits and inspections, in each case at such reasonable times and
as often as may reasonably be desired.
SECTION 5.06. Insurance. The Borrower will maintain, and will
cause each of its Subsidiaries to maintain (either in the name of the
Borrower or in such Subsidiary's own name), with financially sound and
reputable insurance companies, insurance on all its property in at least
such amounts and against at least such risks as are usually insured against
in the same general area by companies of established repute engaged in the
same or similar business and subject to self-insurance retentions; and to
the extent usually insured (subject to self-insured retentions) by
companies similarly situated and conducting similar businesses, the
Borrower will also insure, and cause each Subsidiary to insure, employers'
and public and product liability risks in good and responsible insurance
companies. The Borrower will upon request of any Bank furnish to such Bank
a summary setting forth the nature and extent of the insurance maintained
pursuant to this Section.
SECTION 5.07. Maintenance of Properties. The Borrower will and
will cause each of its Subsidiaries to maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working
order and condition (other than ordinary wear and tear), so that the
business carried on in connection therewith may be properly conducted at
all times, provided that this Section shall not prevent the Borrower or any
Subsidiary from discontinuing the operation and the maintenance of any of
its properties if such discontinuance is desirable in the conduct of its
business and the Borrower has concluded that such discontinuance would not,
individually or in the aggregate, have or cause a Material Adverse Effect.
SECTION 5.08. Ratio of Consolidated Debt to Consolidated Total
Capitalization. The ratio of Consolidated Debt to Consolidated Total
Capitalization will not at any time exceed .60 to 1.00.
SECTION 5.09. Fixed Charges Coverage. At the end of each
Fiscal Quarter, commencing with the Fiscal Quarter ending September 30,
1997, the ratio of Income Available for Fixed Charges for the immediately
preceding 4 Fiscal Quarters then ended to Consolidated Fixed Charges for
the immediately preceding 4 Fiscal Quarters then ended, shall not have been
less than 2.50 to 1.00.
SECTION 5.10. Line of Business. The Borrower will not, and will
not permit any of its Subsidiaries to, engage to any substantial extent in
any business other than the businesses in which the Borrower and its
Subsidiaries are engaged on the date of this Agreement as described in the
Borrower's most recent Annual Report on Form 10-K filed with the Securities
and Exchange Commission and businesses reasonably related thereto or in
furtherance thereof.
SECTION 5.11. Loans, Advances or Investments. Neither the
Borrower nor any of its Subsidiaries shall make loans or advances to, or
Investments in, any Person except (i) deposits required by governmental
agencies or public utilities, (ii) loans, advances or Investments
constituting Acceptable Obligations, (iii) loans or advances to, or
Investments in, any Repap Entity at any time the Repap Debt is outstanding,
to the extent the aggregate amount of such Investments made on or after the
Closing Date in, together with the aggregate outstanding principal amount
of loans and advances made on or after the Closing Date to, Repap Entities
does not exceed $75,000,000, (iv) in addition to Investments permitted
under clause (iii) of this Section, any Investment constituting a Permitted
Acquisition, (v) any loan or advance to, or Investment in, any Wholly-Owned
Subsidiary (other than any Repap Entity at any time the Repap Debt is
outstanding), (vi) any loans or advances to, or Investments in, Repap
Wisconsin (other than loans or advances to, or Investments in, Repap
Wisconsin to the extent permitted pursuant to clause (iii) of this
Section), to the extent the proceeds of such loans, advances or Investments
are used to repay or prepay Repap Debt, (vii) Investments described on
Schedule 5.11 hereto existing on the Closing Date, and (viii) Investments
(in addition to Investments permitted by the foregoing clauses (i) through
(vii) of this Section) made after the Closing Date in an aggregate amount
not in excess of $25,000,000; provided that after giving effect to the
making of any loans, advances or Investments permitted by clause (i),
clause (ii), clause (iii), clause (iv), clause (v), clause (vi), clause
(vii) or clause (viii) of this sentence, no Default or Event of Default
would exist.
SECTION 5.12. Sale of Assets, etc.. The Borrower will not, and
will not permit any of its Subsidiaries to, make any Transfer of property,
provided that the foregoing restriction does not apply to a Transfer if:
(a) the property that is the subject of such Transfer
constitutes either
(i) inventory held for sale, or
(ii) equipment, fixtures, supplies or materials no
longer required in the operation of the business
of the Borrower or such Subsidiary or that is
obsolete,
and, in the case of any Transfer described in the
preceding clause (i) or clause (ii), such Transfer is
in the ordinary course of business (an "Ordinary Course
Transfer");
(b) (i) such Transfer is from a Subsidiary to the Borrower
or a Wholly-Owned Subsidiary, or
(ii) such Transfer is from a Subsidiary to another
Subsidiary, or
(iii) such Transfer is the Number 35 Sale/Lease-
Back,
so long as immediately before and immediately after the
consummation of such transaction, and after giving
effect thereto, no Default or Event of Default exists
or would exist (each such Transfer, an "Intergroup
Transfer"); and
(c) such Transfer is not an Ordinary Course Transfer or an
Intergroup Transfer (such transfers collectively
referred to as "Excluded Transfers"), and all of the
following conditions shall have been satisfied with
respect thereto (the date of the consummation of such
Transfer of property being referred to herein as the
"Property Disposition Date"):
(i) such Transfer does not involve a Substantial
Portion of the property of the Borrower and its
Subsidiaries,
(ii) in the good faith opinion of the Borrower, such
Transfer is in exchange for consideration with a
Fair Market Value at least equal to that of the
property exchanged, and is in the best interests
of the Borrower, and
(iii)immediately after giving effect to such
Transfer no Default or Event of Default would
exist.
SECTION 5.13. Merger, Consolidation, etc. The Borrower will
not, and will not permit any of its Subsidiaries to, consolidate with or
merge with any other corporation or convey, transfer or lease substantially
all of its assets in a single transaction or series of transactions to any
Person (except that a Subsidiary of the Borrower may (x) consolidate with
or merge with, or convey, transfer or lease substantially all of its assets
in a single transaction or series of transactions to, a Wholly-Owned
Subsidiary or the Borrower and (y) convey, transfer or lease all of its
assets in compliance with Section 5.12), provided that the foregoing
restriction does not apply to merger of the Borrower with any Person so
long as (i) such Person was organized under the laws of the United States
of America or one of its states, (ii) the Borrower is the corporation
surviving such merger, and (iii) immediately after giving effect to such
merger, no Default or Event of Default would exist.
SECTION 5.14. Dissolution. Neither the Borrower nor any of its
Significant Subsidiaries shall suffer or permit dissolution or liquidation
either in whole or in part or redeem or retire any shares of its own stock
or that of any Subsidiary, except through corporate reorganization to the
extent permitted by Sections 5.12 and 5.13.
SECTION 5.15. Limitation on Priority Debt. The Borrower shall
not permit the outstanding principal amount of Priority Debt (other than
Excepted Priority Debt) to exceed, in the aggregate, more than 10% of
Consolidated Net Worth at any time.
SECTION 5.16. Negative Pledge. Neither Borrower nor any
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except for Permitted Encumbrances.
SECTION 5.17. Use of Proceeds. No portion of the proceeds of
any Loan will be used by the Borrower, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any Margin Stock or for any purpose in violation of any applicable
law or regulation.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be
continuing:
(a) the Borrower shall fail to pay when due any principal of any
Loan, or shall fail to pay any interest on any Loan within 3 Domestic
Business Days after such interest shall become due, or shall fail to pay
any fee or other amount payable hereunder within 3 Domestic Business Days
after such fee or other amount becomes due; or
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.01, 5.05 or 5.08 to 5.16, inclusive; or
(c) the Borrower shall fail to observe or perform any covenant
or agreement contained or incorporated by reference in this Agreement
(other than those covered by clause (a) or (b) above) for 30 days after the
earlier of (i) the first day on which any Responsible Officer of the
Borrower has knowledge of such failure or (ii) written notice thereof has
been given to the Borrower by the Agent at the request of any Bank; or
(d) any representation, warranty, certification or statement
made or deemed made by the Borrower in Article IV of this Agreement or in
any certificate, financial statement or other document delivered pursuant
to this Agreement shall prove to have been incorrect or misleading in any
material respect when made (or deemed made); or
(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of Debt outstanding in an aggregate amount equal to or
exceeding $25,000,000 (other than the Notes) when due or within any
applicable grace period; or
(f) any event or condition shall occur which results in the
acceleration of the maturity of Debt outstanding in an aggregate amount
equal to or exceeding $25,000,000 of the Borrower or any Subsidiary or the
mandatory prepayment or purchase of such Debt by the Borrower (or its
designee) or such Subsidiary (or its designee) prior to the scheduled
maturity thereof, or enables (or, with the giving of notice or lapse of
time or both, would enable) the holders of such Debt or any Person acting
on such holders' behalf to accelerate the maturity thereof or require the
mandatory prepayment or purchase thereof prior to the scheduled maturity
thereof, without regard to whether such holders or other Person shall have
exercised or waived their right to do so; or
(g) the Borrower or any Material Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall
fail generally, or shall admit in writing its inability, to pay its debts
as they become due, or shall take any corporate action to authorize any of
the foregoing; or
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Material Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be entered
against the Borrower or any Material Subsidiary under the federal
bankruptcy laws as now or hereafter in effect; or
(i) the Borrower or any ERISA Affiliate shall fail to pay when
due any material amount which it shall have become liable to pay to the
PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate
a Plan or Plans shall be filed under Title IV of ERISA by the Borrower, any
ERISA Affiliate, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA
to terminate or to cause a trustee to be appointed to administer any such
Plan or Plans or a proceeding shall be instituted by a fiduciary of any
such Plan or Plans to enforce Section 515 or 4219(c)(5) of ERISA and such
proceeding shall not have been dismissed within 30 days thereafter; or a
condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any such Plan or Plans must be
terminated; or
(j) one or more judgments or orders for the payment of money in
an aggregate amount in excess of $25,000,000 shall be rendered against the
Borrower or any Subsidiary and such judgment or order shall continue
unsatisfied and unstayed for a period of 30 days; or
(k) a federal tax lien shall be filed against the Borrower under
Section 6323 of the Code or a lien of the PBGC shall be filed against the
Borrower or any Subsidiary under Section 4068 of ERISA and in either case
such lien shall remain undischarged for a period of 25 days after the date
of filing; or
(l) any Person or 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 Securities Exchange Act of
1934) of 20% or more of the outstanding shares of the voting stock of the
Borrower (it being understood and agreed that any change in any person or
group of persons having power to cause the trustee of any voting trust to
vote, shall constitute a change in voting power, except to the extent that
the members of the Mead Voting Trust (which is evidenced by a voting trust
agreement dated December 20, 1986) are all descendants of George W. Mead,
I, or spouses thereof, and the aforesaid change constitutes a transfer of
such power from one member of the aforesaid Mead Voting Trust to another
member of the Mead Voting Trust); or (ii) as of any date a majority of the
Board of Directors of the Borrower consists of individuals who were not
either (A) directors of the Borrower as of the corresponding date of the
previous year, (B) selected or nominated to become directors by the Board
of Directors of the Borrower of which a majority consisted of individuals
described in clause (A), or (C) selected or nominated to become directors
by the Board of Directors of the Borrower of which a majority consisted of
individuals described in clause (A) and individuals described in clause
(B);
then, and in every such event, the Agent shall (i) if requested by the
Required Banks, by notice to the Borrower terminate the Commitments and
they shall thereupon terminate, and (ii) if requested by the Required
Banks, by notice to the Borrower declare the Notes (together with accrued
interest thereon) and all other amounts payable hereunder and under the
other Loan Documents to be, and the Notes (together with all accrued
interest thereon) and all other amounts payable hereunder and under the
other Loan Documents shall thereupon become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; provided that if any Event of
Default specified in clause (g) or (h) above occurs with respect to the
Borrower, without any notice to the Borrower or any other act by the Agent
or the Banks, the Commitments shall thereupon automatically terminate and
the Notes (together with accrued interest thereon) and all other amounts
payable hereunder and under the other Loan Documents shall automatically
become immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
Notwithstanding the foregoing, the Agent shall have available to it all
other remedies at law or equity, and shall exercise any one or all of them
at the request of the Required Banks.
SECTION 6.02. Notice of Default. The Agent shall give notice to
the Borrower of any Default under Section 6.01(c) promptly upon being
requested to do so by any Bank and shall thereupon notify all the Banks
thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment, Powers and Immunities. Each Bank
hereby irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Agent by the terms hereof and thereof,
together with such other powers as are reasonably incidental thereto. The
Agent: (a) shall have no duties or responsibilities except as expressly
set forth in this Agreement and the other Loan Documents, and shall not by
reason of this Agreement or any other Loan Document be a trustee for any
Bank; (b) shall not be responsible to the Banks for any recitals,
statements, representations or warranties contained in this Agreement or
any other Loan Document, or in any certificate or other document referred
to or provided for in, or received by any Bank under, this Agreement or any
other Loan Document, or for the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document
or any other document referred to or provided for herein or therein or for
any failure by the Borrower to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any litigation
or collection proceedings hereunder or under any other Loan Document except
to the extent requested by the Required Banks, and then only on terms and
conditions satisfactory to the Agent, and (d) shall not be responsible for
any action taken or omitted to be taken by it hereunder or under any other
Loan Document or any other document or instrument referred to or provided
for herein or therein or in connection herewith or therewith, except for
its own gross negligence or willful misconduct. The Agent may employ
agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected
by it with reasonable care. The provisions of this Article VII are solely
for the benefit of the Agent and the Banks, and the Borrower shall not have
any rights as a third party beneficiary of any of the provisions hereof.
In performing its functions and duties under this Agreement and under the
other Loan Documents, the Agent shall act solely as agent of the Banks and
does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for the Borrower. The
duties of the Agent shall be ministerial and administrative in nature, and
the Agent shall not have by reason of this Agreement or any other Loan
Document a fiduciary relationship in respect of any Bank.
SECTION 7.02. Reliance by Agent. The Agent shall be entitled to
rely upon any certification, notice or other communication (including any
thereof by telephone, telefax, telegram or cable) believed by it to be
genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants or other experts selected by the Agent. As to any
matters not expressly provided for by this Agreement or any other Loan
Document, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder and thereunder in accordance with
instructions signed by the Required Banks, and such instructions of the
Required Banks in any action taken or failure to act pursuant thereto shall
be binding on all of the Banks.
SECTION 7.03. Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of a Default or an Event of Default (other than
the non-payment of principal of or interest on the Loans) unless the Agent
has received notice from a Bank or the Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In
the event that the Agent receives such a notice of the occurrence of a
Default or an Event of Default, the Agent shall give prompt notice thereof
to the Banks. The Agent shall give each Bank prompt notice of each non-
payment of principal of or interest on the Loans, whether or not it has
received any notice of the occurrence of such non-payment. The Agent shall
(subject to Section 9.05) take such action with respect to such Default or
Event of Default as shall be directed by the Required Banks, provided that,
unless and until the Agent shall have received such directions, the Agent
may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Banks.
SECTION 7.04. Rights of Agent and its Affiliates as a Bank. With
respect to any Loan made by Wachovia or an Affiliate of Wachovia, such
Affiliate and Wachovia in their capacity as a Bank hereunder shall have the
same rights and powers hereunder as any other Bank and may exercise the
same as though it were not an Affiliate of Wachovia (or in Wachovia's case,
acting as the Agent), and the term "Bank" or "Banks" shall, unless the
context otherwise indicates, include such Affiliate of Wachovia or Wachovia
in its individual capacity. Such Affiliate and Wachovia may (without
having to account therefor to any Bank) accept deposits from, lend money to
and generally engage in any kind of banking, trust or other business with
the Borrower (and any of its Affiliates) as if they were not an Affiliate
of the Agent or the Agent, respectively; and such Affiliate and Wachovia
may accept fees and other consideration from the Borrower (in addition to
any agency fees and arrangement fees heretofore agreed to between the
Borrower and Wachovia) for services in connection with this Agreement or
any other Loan Document or otherwise without having to account for the same
to the Banks.
SECTION 7.05. Indemnification. Each Bank severally agrees to
indemnify the Agent, to the extent the Agent shall not have been reimbursed
by the Borrower, ratably in accordance with its Commitments, for any and
all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including, without limitation, counsel
fees and disbursements) or disbursements of any kind and nature whatsoever
which may be imposed on, incurred by or asserted against the Agent in any
way relating to or arising out of this Agreement or any other Loan Document
or any other documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby (excluding, unless an Event
of Default has occurred and is continuing, the normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or
the enforcement of any of the terms hereof or thereof or any such other
documents; provided, however, that no Bank shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Agent. If any indemnity furnished to the Agent for any
purpose shall, in the opinion of the Agent, be insufficient or become
impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional
indemnity is furnished.
SECTION 7.06. CONSEQUENTIAL DAMAGES. THE AGENT SHALL NOT BE
RESPONSIBLE OR LIABLE TO ANY BANK, THE BORROWER OR ANY OTHER PERSON OR
ENTITY FOR ANY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE
ALLEGED AS A RESULT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY OF
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 7.07. Payee of Note Treated as Owner. The Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
hereof unless and until a written notice of the assignment or transfer
thereof shall have been filed with the Agent and the provisions of Section
9.07(c) have been satisfied. Any requests, authority or consent of any
Person who at the time of making such request or giving such authority or
consent is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of that Note or of any Note or
Notes issued in exchange therefor or replacement thereof.
SECTION 7.08. Non-Reliance on Agent and Other Banks. Each Bank
agrees that it has, independently and without reliance on the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and decision to
enter into this Agreement and that it will, independently and without
reliance upon the Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this
Agreement or any of the other Loan Documents. The Agent shall not be
required to keep itself (or any Bank) informed as to the performance or
observance by the Borrower of this Agreement or any of the other Loan
Documents or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Borrower or any other
Person. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder or
under the other Loan Documents, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of the Borrower or
any other Person (or any of their Affiliates) which may come into the
possession of the Agent.
SECTION 7.09. Failure to Act. Except for action expressly
required of the Agent hereunder or under the other Loan Documents, the
Agent shall in all cases be fully justified in failing or refusing to act
hereunder and thereunder unless it shall receive further assurances to its
satisfaction by the Banks of their indemnification obligations under
Section 7.05 against any and all liability and expense which may be
incurred by the Agent by reason of taking, continuing to take, or failing
to take any such action.
SECTION 7.10. Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the
Agent may resign at any time by giving notice thereof to the Banks and the
Borrower and the Agent may be removed at any time with or without cause by
the Required Banks. Upon any such resignation or removal, the Required
Banks shall have the right to appoint a successor Agent. If no successor
Agent shall have been so appointed by the Required Banks and shall have
accepted such appointment within 30 days after the retiring Agent's notice
of resignation or the Required Banks' removal of the retiring Agent, then
the retiring Agent may, on behalf of the Banks, appoint a successor Agent.
Any successor Agent shall be a bank which has a combined capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall
be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions
of this Article VII shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was acting as the
Agent hereunder.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period:
(a) the Agent determines that deposits in Dollars (in the
applicable amounts) are not being offered in the relevant market for such
Interest Period, or
(b) the Required Banks advise the Agent that the London
Interbank Offered Rate as determined by the Agent will not adequately and
fairly reflect the cost to such Banks of funding the Euro-Dollar Loans for
such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the
Banks, whereupon until the Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, the
obligations of the Banks to make Euro-Dollar Loans shall be suspended.
Unless the Borrower notifies the Agent at least 2 Domestic Business Days
before the date of any Borrowing of a Euro-Dollar Loan for which a Notice
of Borrowing has previously been given that it elects not to borrow on such
date, such Borrowing shall instead be made as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, after the date hereof, the
adoption of any applicable law, rule or regulation, or any change in any
existing or future law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof (any such authority, bank or agency being referred
to as an "Authority" and any such event being referred to as a "Change of
Law"), or compliance by any Bank (or its Lending Office) with any request
or directive (whether or not having the force of law) of any Authority
shall make it unlawful or impossible for any Bank (or its Lending Office)
to make, maintain or fund its Euro-Dollar Loans and such Bank shall so
notify the Agent, the Agent shall forthwith give notice thereof to the
other Banks and the Borrower, whereupon until such Bank notifies the
Borrower and the Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of such Bank to make Euro-Dollar
Loans shall be suspended. Before giving any notice to the Agent pursuant
to this Section, such Bank shall designate a different Lending Office if
such designation will avoid the need for giving such notice and will not,
in the judgment of such Bank, be otherwise disadvantageous to such Bank.
If such Bank shall determine that it may not lawfully continue to maintain
and fund any of its outstanding Euro-Dollar Loans to maturity and shall so
specify in such notice, the Borrower shall immediately prepay in full the
then outstanding principal amount of each Euro-Dollar Loan of such Bank,
together with accrued interest thereon and any amount due such Bank
pursuant to Section 8.05(a). Concurrently with prepaying each such Euro-
Dollar Loan, the Borrower shall borrow a Base Rate Loan in an equal
principal amount from such Bank (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of the other
Banks), and such Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If after
the date hereof, a Change of Law or compliance by any Bank (or its Lending
Office) with any request or directive (whether or not having the force of
law) of any Authority:
(i) shall subject any Bank (or its Lending Office) to any
tax, duty or other charge with respect to its Euro-Dollar Loans,
its Notes or its obligation to make Euro-Dollar Loans, or shall
change the basis of taxation of payments to any Bank (or its
Lending Office) of the principal of or interest on its Euro-
Dollar Loans or any other amounts due under this Agreement in
respect of its Euro-Dollar Loans or its obligation to make Euro-
Dollar Loans (except for changes in the rate of tax on the
overall net income of such Bank or its Lending Office imposed by
the jurisdiction in which such Bank's principal executive office
or Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding with
respect to any Euro-Dollar Loan any such requirement included in
an applicable Euro-Dollar Reserve Percentage) against assets of,
deposits with or for the account of, or credit extended by, any
Bank (or its Lending Office); or
(iii) shall impose on any Bank (or its Lending Office)
or the London interbank market any other condition affecting its
Euro-Dollar Loans, its Notes or its obligation to make Euro-
Dollar Loans;
and the result of any of the foregoing is to increase the cost to such Bank
(or its Lending Office) of making or maintaining any Euro-Dollar Loan, or
to reduce the amount of any sum received or receivable by such Bank (or its
Lending Office) under this Agreement or under its Notes with respect
thereto, by an amount deemed by such Bank to be material, then, within
15 days after demand by such Bank (with a copy to the Agent), the Borrower
shall pay to such Bank such additional amount or amounts as will compensate
such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that after the date hereof
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any existing or future law, rule or regulation,
or any change in the interpretation or administration thereof, or
compliance by any Bank (or its Lending Office or a corporation controlling
such Bank) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any Authority, has or would
have the effect of reducing the rate of return on such Bank's or such
corporation's capital as a consequence of its obligations hereunder to a
level below that which such Bank or such corporation could have achieved
but for such adoption, change or compliance (taking into consideration such
Bank's or such corporation's policies with respect to capital adequacy) by
an amount deemed by such Bank or such corporation to be material, then from
time to time, within 15 days after demand by such Bank or such corporation,
the Borrower shall pay to such Bank or such corporation such additional
amount or amounts as will compensate such Bank or such corporation for such
reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of
any event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section and will
designate a different Lending Office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank claiming compensation under this Section and
setting forth the additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of manifest error. In determining such
amount, such Bank may use any reasonable averaging and attribution methods.
(d) The provisions of this Section 8.03 shall be applicable with
respect to any Participant, Assignee or other Transferee, and any
calculations required by such provisions shall be made based upon the
circumstances of such Participant, Assignee or other Transferee.
SECTION 8.04. Base Rate Loans Substituted for Affected Euro-
Dollar Loans. If (i) the obligation of any Bank to make or maintain Euro-
Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any Bank
has demanded compensation under Section 8.03, and the Borrower shall, by at
least 5 Euro-Dollar Business Days' prior notice to such Bank through the
Agent, have elected that the provisions of this Section shall apply to such
Bank, then, unless and until such Bank notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer apply:
(a) all Loans which would otherwise be made by such Bank as
Euro-Dollar Loans shall be made instead as Base Rate Loans (in all cases
interest and principal on such Loans shall be payable contemporaneously
with the related Euro-Dollar Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all
payments of principal which would otherwise be applied to repay such Euro-
Dollar Loans shall be applied to repay its Base Rate Loans instead.
In the event that the Borrower shall elect that the provisions of this
Section shall apply to any Bank, the Borrower shall remain liable for, and
shall pay to such Bank as provided herein, all amounts due such Bank under
Section 8.03 in respect of the period preceding the date of conversion of
such Bank's Loans resulting from the Borrower's election.
SECTION 8.05. Compensation. Upon the request of any Bank,
delivered to the Borrower and the Agent, the Borrower shall pay to such
Bank such amount or amounts as shall compensate such Bank for any loss,
cost or expense incurred by such Bank as a result of:
(a) any payment or prepayment (pursuant to Section 2.09, Section
2.10, Section 8.02 or otherwise) of a Euro-Dollar Loan or a Money Market
Loan on a date other than the last day of an Interest Period for such Euro-
Dollar Loan or Money Market Loan, as the case may be;
(b) any failure by the Borrower to prepay a Euro-Dollar Loan or
a Money Market Loan on the date for such prepayment specified in the
relevant notice of prepayment hereunder;
(c) any failure by the Borrower to borrow a Euro-Dollar Loan on
the date for the Euro-Dollar Borrowing of which such Euro-Dollar Loan is a
part specified in the applicable Notice of Borrowing delivered pursuant to
Section 2.02; or
(d) any failure by the Borrower to borrow a Money Market Loan
(with respect to which the Borrower has accepted a Money Market Quote) on
the date for the Money Market Borrowing of which such Money Market Loan is
a part specified in the applicable Money Market Quote Request delivered
pursuant to Section 2.03;
such compensation to include, without limitation, an amount equal to the
excess, if any, of (x) the amount of interest which would have accrued on
the amount so paid or prepaid or not prepaid or borrowed for the period
from the date of such payment, prepayment or failure to prepay or borrow to
the last day of the then current Interest Period for such Euro-Dollar Loan
(or, in the case of a failure to prepay or borrow, the Interest Period for
such Euro-Dollar Loan which would have commenced on the date of such
failure to prepay or borrow) at the applicable rate of interest for such
Euro-Dollar Loan provided for herein over (y) the amount of interest (as
reasonably determined by such Bank) such Bank would have paid on deposits
in Dollars of comparable amounts having terms comparable to such period
placed with it by leading banks in the London interbank market (if such
Euro-Dollar Loan is a Euro-Dollar Loan).
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including
facsimile transmission or similar writing) and shall be given to such party
at its address or telecopy number set forth on the signature pages hereof
or such other address or telecopy number as such party may hereafter
specify for the purpose by notice to each other party. Each such notice,
request or other communication shall be effective (i) if given by
telecopier, when such telecopy is transmitted to the telecopy number
specified in this Section and the telecopy machine used by the sender
provides a written confirmation that such telecopy has been so transmitted
or receipt of such telecopy transmission is otherwise confirmed, (ii) if
given by mail, 72 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid, and (iii) if
given by any other means, when delivered at the address specified in this
Section; provided that notices to the Agent under Article II or
Article VIII shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or
any Bank in exercising any right, power or privilege hereunder or under any
Note or other Loan Document shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 9.03. Expenses; Documentary Taxes; Indemnification. (a)
The Borrower shall pay (i) all out-of-pocket expenses of the Agent,
including fees and disbursements of special counsel for the Agent, in
connection with the preparation of this Agreement and the other Loan
Documents, any waiver or consent hereunder or thereunder or any amendment
hereof or thereof or any Default or alleged Default hereunder or thereunder
and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred
by the Agent or any Bank, including fees and disbursements of counsel
(including allocated costs of internal counsel), in connection with such
Event of Default and collection and other enforcement proceedings resulting
therefrom, including out-of-pocket expenses incurred in enforcing this
Agreement and the other Loan Documents.
(b) The Borrower shall indemnify the Agent and each Bank against
any transfer taxes, documentary taxes, assessments or charges made by any
Authority by reason of the execution and delivery of this Agreement or the
other Loan Documents.
(c) The Borrower shall indemnify the Agent, the Banks and each
Affiliate thereof and their respective directors, officers, employees and
agents from, and hold each of them harmless against, any and all losses,
liabilities, claims or damages to which any of them may become subject,
insofar as such losses, liabilities, claims or damages arise out of or
result from any actual or proposed use by the Borrower of the proceeds of
any extension of credit by any Bank hereunder or breach by the Borrower of
this Agreement or any other Loan Document or from investigation, litigation
(including, without limitation, any actions taken by the Agent or any of
the Banks to enforce this Agreement or any of the other Loan Documents) or
other proceeding (including, without limitation, any threatened
investigation or proceeding) relating to the foregoing, and the Borrower
shall reimburse the Agent and each Bank, and each Affiliate thereof and
their respective directors, officers, employees and agents, upon demand for
any expenses (including, without limitation, legal fees and the allocated
costs of internal counsel) incurred in connection with any such
investigation or proceeding; but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified.
SECTION 9.04. Setoffs; Sharing of Set-Offs. (a) The Borrower
hereby grants to each Bank and each Affiliate of such Bank, as security for
the full and punctual payment and performance of the obligations of the
Borrower under this Agreement, a continuing lien on and security interest
in all deposits and other sums credited by or due from such Bank or such
Affiliate to the Borrower or subject to withdrawal by the Borrower; and
regardless of the adequacy of any collateral or other means of obtaining
repayment of such obligations, each Bank and each Affiliate of such Bank
may at any time upon or after the occurrence of any Event of Default, and
without notice to the Borrower, set off the whole or any portion or
portions of any or all such deposits and other sums against such
obligations, whether or not any other Person or Persons could also withdraw
money therefrom.
(b) Each Bank agrees that if it shall, by exercising any right
of set-off or counterclaim or otherwise, receive payment of a proportion of
the aggregate amount of principal and interest owing with respect to the
Facility A Syndicated Notes or the Facility B Syndicated Notes held by it
which is greater than the proportion received by any other Bank in respect
of the aggregate amount of all principal and interest owing with respect to
the Facility A Syndicated Notes or the Facility B Syndicated Notes held by
such other Bank, the Bank receiving such proportionately greater payment
shall purchase such participations in the Facility A Syndicated Notes or
the Facility B Syndicated Notes held by the other Banks owing to such other
Banks, and/or such other adjustments shall be made, as may be required so
that all such payments of principal and interest with respect to the
Facility A Syndicated Notes or Facility B Syndicated Notes held by the
Banks owing to such other Banks shall be shared by the Banks pro rata;
provided that (i) nothing in this Section shall impair the right of any
Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness
(including, without limitation, Money Market Loans) of the Borrower other
than its indebtedness under the Syndicated Notes, and (ii) if all or any
portion of such payment received by the purchasing Bank is thereafter
recovered from such purchasing Bank, such purchase from each other Bank
shall be rescinded and such other Bank shall repay to the purchasing Bank
the purchase price of such participation to the extent of such recovery
together with an amount equal to such other Bank's ratable share (according
to the proportion of (x) the amount of such other Bank's required repayment
to (y) the total amount so recovered from the purchasing Bank) of any
interest or other amount paid or payable by the purchasing Bank in respect
of the total amount so recovered. The Borrower agrees, to the fullest
extent it may effectively do so under applicable law, that any holder of a
participation in a Syndicated Note, whether or not acquired pursuant to the
foregoing arrangements, may exercise rights of set-off or counterclaim and
other rights with respect to such participation as fully as if such holder
of a participation were a direct creditor of the Borrower in the amount of
such participation.
SECTION 9.05. Amendments and Waivers. (a) Any provision of this
Agreement, the Notes or any other Loan Documents may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by
the Borrower and the Required Banks (and, if the rights or duties of the
Agent are affected thereby, by the Agent); provided that no such amendment
or waiver shall, unless signed by all the Banks, (i) increase the
Commitment of any Bank or subject any Bank to any additional obligation,
(ii) reduce the principal of or rate of interest on any Loan or any fees
hereunder, (iii) extend the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder, (iv) reduce the amount of
principal, interest or fees due on any date fixed for the payment thereof,
(v) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the percentage of Banks, which shall be
required for the Banks or any of them to take any action under this Section
or any other provision of this Agreement, (vi) change the manner of
application of any payments made under this Agreement or the Notes, (vii)
release or substitute all or any substantial part of the collateral (if
any) held as security for the Loans, or (viii) release any guaranty given
to support payment of the Loans.
(b) The Borrower will not solicit, request or negotiate for or
with respect to any proposed waiver or amendment of any of the provisions
of this Agreement unless each Bank shall be informed thereof by the
Borrower and shall be afforded an opportunity of considering the same and
shall be supplied by the Borrower with sufficient information to enable it
to make an informed decision with respect thereto. Executed or true and
correct copies of any waiver or consent effected pursuant to the provisions
of this Agreement shall be delivered by the Agent to each Bank forthwith
following the date on which the same shall have been executed and delivered
by the requisite percentage of Banks. The Borrower will not, directly or
indirectly, pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, to any Bank (in its
capacity as such) as consideration for or as an inducement to the entering
into by such Bank of any waiver or amendment of any of the terms and
provisions of this Agreement unless such remuneration is concurrently paid,
on the same terms, ratably to all such Banks.
SECTION 9.06. Margin Stock Collateral. Each of the Banks
represents to the Agent and each of the other Banks that it in good faith
is not, directly or indirectly (by negative pledge or otherwise), relying
upon any Margin Stock as collateral in the extension or maintenance of the
credit provided for in this Agreement.
SECTION 9.07. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns; provided that
the Borrower may not assign or otherwise transfer any of its rights under
this Agreement.
(b) Any Bank may at any time sell to one or more Persons (each a
"Participant") participating interests in any Loan owing to such Bank, any
Note held by such Bank, any Commitment hereunder or any other interest of
such Bank hereunder. In the event of any such sale by a Bank of a
participating interest to a Participant, such Bank's obligations under this
Agreement shall remain unchanged, such Bank shall remain solely responsible
for the performance thereof, such Bank shall remain the holder of any such
Note for all purposes under this Agreement, and the Borrower and the Agent
shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement. In no event
shall a Bank that sells a participation be obligated to the Participant to
take or refrain from taking any action hereunder except that such Bank may
agree that it will not (except as provided below), without the consent of
the Participant, agree to (i) the extension of any date fixed for the
payment of principal of or interest on the related Loan or Loans, (ii) the
reduction of the amount of any principal, interest or fees due on any date
fixed for the payment thereof with respect to the related Loan or Loans,
(iii) the reduction of the principal of the related Loan or Loans, (iv) any
reduction in the rate at which either interest is payable thereon or (if
the Participant is entitled to any part thereof) facility fee is payable
hereunder from the rate at which the Participant is entitled to receive
interest or facility fee (as the case may be) in respect of such
participation, (v) the release or substitution of all or any substantial
part of the collateral (if any) held as security for the Loans, or (vi) the
release of any guaranty given to support payment of the Loans. Each Bank
selling a participating interest in any Loan, Note, Commitment or other
interest under this Agreement shall, within 10 Domestic Business Days of
such sale, provide the Borrower and the Agent with written notification
stating that such sale has occurred and identifying the Participant and the
interest purchased by such Participant. The Borrower agrees that each
Participant shall be entitled to the benefits of Article VIII with respect
to its participation in Loans outstanding from time to time.
(c) Any Bank may at any time assign to one or more banks or
financial institutions (each an "Assignee") all, or a proportionate part of
all, of its rights and obligations under this Agreement, the Notes and the
other Loan Documents, and such Assignee shall assume all such rights and
obligations, pursuant to an Assignment and Acceptance in the form attached
hereto as Exhibit I, executed by such Assignee, such transferor Bank and
the Agent (and, in the case of (x) an Assignee that is not then a Bank or
an Affiliate of a Bank, and (y) an assignment not made during the existence
of a Default, by the Borrower); provided that (i) no interest may be sold
by a Bank pursuant to this paragraph (c) unless the Assignee shall agree to
assume ratably equivalent portions of the transferor Bank's Facility A
Commitment and Facility B Commitment, (ii) the aggregate amount of the
Commitments of the assigning Bank subject to such assignment (determined as
of the effective date of the assignment) shall be equal to or greater than
$10,000,000, (iii) no interest may be sold by a Bank pursuant to this
paragraph (c) to any Assignee that is not then a Bank or an Affiliate of a
Bank without the consent of the Borrower, which consent shall not be
unreasonably withheld, provided that the Borrower's consent shall not be
necessary with respect to any assignment made during the existence of a
Default, and (iv) no interest may be sold by a Bank pursuant to this
paragraph (c) to any Assignee that is not then a Bank or an Affiliate of a
Bank without the consent of the Agent, which consent shall not be
unreasonably withheld. Upon (A) execution of the Assignment and Acceptance
by such transferor Bank, such Assignee, the Agent and (if applicable) the
Borrower, (B) delivery of an executed copy of the Assignment and Acceptance
to the Borrower and the Agent, (C) payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between
such transferor Bank and such Assignee, and (D) payment of a processing and
recordation fee of $2,500 to the Agent, such Assignee shall for all
purposes be a Bank party to this Agreement and shall have all the rights
and obligations of a Bank under this Agreement (including, without
limitation, the rights of a Bank under Section 2.03) to the same extent as
if it were an original party hereto with a Facility A Commitment and
Facility B Commitment as set forth in such instrument of assumption, and
the transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by the Borrower, the
Banks or the Agent shall be required. Upon the consummation of any
transfer to an Assignee pursuant to this paragraph (c), the transferor
Bank, the Agent and the Borrower shall make appropriate arrangements so
that, if required, new Notes are issued to each of such Assignee and such
transferor Bank.
(d) Subject to the provisions of Section 9.08, the Borrower
authorizes each Bank to disclose to any Participant, Assignee or other
transferee (each a "Transferee") and any prospective Transferee any and all
financial and other information in such Bank's possession concerning the
Borrower which has been delivered to such Bank by the Borrower pursuant to
this Agreement or which has been delivered to such Bank by the Borrower in
connection with such Bank's credit evaluation prior to entering into this
Agreement.
(e) No Transferee shall be entitled to receive any greater
payment under Section 8.03 than the transferor Bank would have been
entitled to receive with respect to the rights transferred, unless such
transfer is made with the Borrower's prior written consent or by reason of
the provisions of Section 8.02 or 8.03 requiring such Bank to designate a
different Lending Office under certain circumstances or at a time when the
circumstances giving rise to such greater payment did not exist.
(f) Anything in this Section 9.07 to the contrary
notwithstanding, any Bank may assign and pledge all or any portion of the
Loans and/or obligations owing to it to any Federal Reserve Bank or the
United States Treasury as collateral security pursuant to Regulation A of
the Board of Governors of the Federal Reserve System and Operating Circular
issued by such Federal Reserve Bank, provided that any payment in respect
of such assigned Loans and/or obligations made by the Borrower to the
assigning and/or pledging Bank in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect of
such assigned Loans and/or obligations to the extent of such payment. No
such assignment shall release the assigning and/or pledging Bank from its
obligations hereunder.
SECTION 9.08. Confidentiality. Each Bank agrees to exercise its
best efforts to keep any information delivered or made available by the
Borrower to it which is clearly indicated to be confidential information,
confidential from anyone other than persons employed or retained by such
Bank or any Affiliate of such Bank who are or are expected to become
engaged in evaluating, approving, structuring or administering the Loans;
provided, however, that nothing herein shall prevent any Bank from
disclosing such information (i) to any other Bank, (ii) upon the order of
any court or administrative agency, (iii) upon the request or demand of any
regulatory agency or authority having jurisdiction over such Bank, (iv)
which has been publicly disclosed, (v) to the extent reasonably required in
connection with any litigation to which the Agent, any Bank or their
respective Affiliates may be a party, (vi) to the extent reasonably
required in connection with the exercise of any remedy hereunder, (vii) to
such Bank's legal counsel and independent auditors and (viii) to any actual
or proposed Participant, Assignee or other Transferee of all or part of its
rights hereunder which has agreed in writing to be bound by the provisions
of this Section 9.08.
SECTION 9.09. Representation by Banks. Each Bank hereby
represents that it is a commercial lender or financial institution which
makes loans in the ordinary course of its business and that it will make
its Loans hereunder for its own account in the ordinary course of such
business; provided, however, that, subject to Section 9.07, the disposition
of the Note or Notes held by that Bank shall at all times be within its
exclusive control.
SECTION 9.10. Obligations Several. The obligations of each Bank
hereunder are several, and no Bank shall be responsible for the obligations
or commitment of any other Bank hereunder. Nothing contained in this
Agreement and no action taken by the Banks pursuant hereto shall be deemed
to constitute the Banks to be a partnership, an association, a joint
venture or any other kind of entity. The amounts payable at any time
hereunder to each Bank shall be a separate and independent debt, and each
Bank shall be entitled to protect and enforce its rights arising out of
this Agreement or any other Loan Document and it shall not be necessary for
any other Bank to be joined as an additional party in any proceeding for
such purpose.
SECTION 9.11. Survival of Certain Obligations.
Sections 8.03(a), 8.03(b), 8.05 and 9.03, and the obligations of the
Borrower thereunder, shall survive, and shall continue to be enforceable
notwithstanding, the termination of this Agreement and the Commitments and
the payment in full of the principal of and interest on all Loans.
SECTION 9.12. Georgia Law. This Agreement and each Note shall
be construed in accordance with and governed by the law of the State of
Georgia.
SECTION 9.13. Severability. In case any one or more of the
provisions contained in this Agreement, the Notes or any of the other Loan
Documents should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby and
shall be enforced to the greatest extent permitted by law.
SECTION 9.14. Interest. In no event shall the amount of
interest due or payable hereunder or under the Notes exceed the maximum
rate of interest allowed by applicable law, and in the event any such
payment is inadvertently made to any Bank by the Borrower or inadvertently
received by any Bank, then such excess sum shall be credited as a payment
of principal, unless the Borrower shall notify such Bank in writing that it
elects to have such excess sum returned forthwith. It is the express
intent hereof that the Borrower not pay and the Banks not receive, directly
or indirectly in any manner whatsoever, interest in excess of that which
may legally be paid by the Borrower under applicable law.
SECTION 9.15. Interpretation. No provision of this Agreement or
any of the other Loan Documents shall be construed against or interpreted
to the disadvantage of any party hereto by any court or other governmental
or judicial authority by reason of such party having or being deemed to
have structured or dictated such provision.
SECTION 9.16. Consent to Jurisdiction. The Borrower (a) submits
to personal jurisdiction in the State of Georgia, the courts thereof and
the United States District Courts sitting therein, for the enforcement of
this Agreement, the Notes and the other Loan Documents, (b) waives any and
all personal rights under the law of any jurisdiction to object on any
basis (including, without limitation, inconvenience of forum) to
jurisdiction or venue within the State of Georgia for the purpose of
litigation to enforce this Agreement, the Notes or the other Loan
Documents, and (c) agrees that service of process may be made upon it in
the manner prescribed in Section 9.01 for the giving of notice to the
Borrower. Nothing herein contained, however, shall prevent the Agent from
bringing any action or exercising any rights against any security and
against the Borrower personally, and against any assets of the Borrower,
within any other state or jurisdiction.
SECTION 9.17. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, under seal, by their respective authorized officers as
of the day and year first above written.
CONSOLIDATED PAPERS, INC.
By: ___________________________ (SEAL)
Title: Senior Vice President, Finance
231 First Avenue North
Wisconsin Rapids, Wisconsin 54495-8050
Attn: Richard J. Kenney,
Senior Vice President, Finance
Telecopy number: (715) 422-3203
Telephone number: (715) 422-3578
FACILITY A COMMITMENT WACHOVIA BANK, N.A., as Agent and as a Bank
$66,666,666.65
By: ___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$58,333,333.35 Wachovia Bank, N.A.
Syndication Services
191 Peachtree Street, N.E., Mail Code GA-0423
Atlanta, Georgia 30303-1757
Attention: Elizabeth Dreiling (27th Floor)
Telecopy number: (404) 332-4005
Telephone number: (404) 332-4008
with a copy to:
Wachovia Corporate Services, Inc.
70 West Madison Street, Suite 2440
Chicago, Illinois 60611
Attention: James Heinz
Telecopy number: (312) 853-0693
Telephone number: (312) 795-4343
FACILITY A COMMITMENT BANK OF MONTREAL, as Co-Agent
and as a Bank
$37,333,333.33
By:___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$32,666,666.67 Bank of Montreal
1155 South LaSalle Street
Chicago, Illinois 60603
Attention: Sue Blackburn
Telecopy number: (312) 750-3834
Telephone number: (312) 750-3887
FACILITY A COMMITMENT THE CHASE MANHATTAN BANK,
as Co-Agent and as a Bank
$37,333,333.33
By:___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$32,666,666.67 The Chase Manhattan Bank
Forest Products Group
270 Park Avenue, 23rd Floor
New York, New York 10017
Attention: Helene Santo
Telecopy number: (212) 270-4724
Telephone number: (212) 270-8330
with a copy to:
The Chase Manhattan Bank
10 South LaSalle Street
Chicago, Illinois 60603
Telecopy number: (312) 807-4550
Telephone number: (312) 807-4038
FACILITY A COMMITMENT CIBC INC., as Co-Agent and as a Bank
$37,333,333.33
By:___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$32,666,666.67 CIBC Inc.
2 Paces Ferry Road
2727 Paces Ferry Road, Suite 1200
Atlanta, Georgia 30339
Attention: Clare Coyne
Telecopy number: (770) 319-4950
Telephone number: (770) 319-4813
FACILITY A COMMITMENT DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH,
$37,333,333.33 as Co-Agent and as a Bank
By:___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$32,666,666.67 Deutsche Bank A.G., New York
and/or Cayman Islands Branch
31 West 52nd Street, 24th Floor
New York, New York 10019
Attention: Hans-Josef Theile
Telecopy number: (212) 469-8212
Telephone number: (212) 469-8649
FACILITY A COMMITMENT NATIONSBANK, N.A.,
as Co-Agent and as a Bank
$37,333,333.33
By:___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$32,666,666.67 NationsBank, N.A.
NationsBank Corporate Finance
Mail Code NC1-007-08-05
100 North Tryon Street, 8th Floor
Charlotte, North Carolina 28255
Attention: Joseph L. Corah
Telecopy number: (704) 386-9835
Telephone number: (704) 386-5976
FACILITY A COMMITMENT THE BANK OF TOKYO-MITSUBISHI, LTD.,
CHICAGO BRANCH
$18,666,666.67
By:___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$16,333,333.33 The Bank of Tokyo-Mitsubishi, Ltd.,
Chicago Branch
227 West Monroe Street, Suite 2300
Chicago, Illinois 60606
Attention: Wayne Yamanaka
Telecopy number: (312) 696-4535
Telephone number: (312) 696-4664
FACILITY A COMMITMENT DRESDNER BANK AG, NEW YORK
AND GRAND CAYMAN BRANCHES
$18,666,666.67
By:___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$16,333,333.33 Dresdner Bank AG, New York Branch
Credit Administration
75 Wall Street, 33rd Floor
New York, New York 10005
Attention: Claudia Zou
Telecopy number: (212) 429-2130
Telephone number: (212) 429-2684
with a copy to:
Dresdner Kleinwort Benson
190 South La Salle Street, Suite 2700
Chicago, Illinois 60603-3497
Attention: James Jerz
Telecopy number: (312) 444-1305
Telephone number: (312) 444-1314
FACILITY A COMMITMENT ROYAL BANK OF CANADA
$18,666,666.67
By:___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$16,333,333.33 Royal Bank of Canada
1 Financial Square, 23rd Floor
New York, New York 10005
Attention: Danielle Gilles
Telecopy number: (212) 428-2372
Telephone number: (212) 428-6332
FACILITY A COMMITMENT SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION
$18,666,666.67
By:___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$16,333,333.33 SunTrust Bank, Central Florida,
National Association
200 S. Orange Avenue
Orlando, Florida 32801
Attention: Joseph Kabourk
Telecopy number: (407) 237-6894
Telephone number: (407) 237-4284
FACILITY A COMMITMENT TORONTO DOMINION (TEXAS), INC.
$18,666,666.67
By:___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$16,333,333.33 Toronto-Dominion Bank, Houston Agency
909 Fannin Street, Suite 1700
Houston, Texas 77010
Attention: Manager, Credit Administration
Telecopy number: (713) 951-9921
Telephone number: (713) 653-8200
with a copy to:
Toronto-Dominion Bank
31 West 52nd Street
New York, New York 10019-6101
Attention: Simon Goulet
Telecopy number: (212) 397-4135
Telephone number: (212) 468-0705
FACILITY A COMMITMENT THE BANK OF NEW YORK
$10,666,666.67
By:___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$9,333,333.33 The Bank of New York
One Wall Street, 19th Floor
New York, New York 10286
Attention: Mark Familo
Telecopy number: (212) 635-1208
Telephone number: (212) 635-1165
FACILITY A COMMITMENT BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
$10,666,666.67
By:___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$9,333,333.33 Bank of America National Trust and
Savings Association
555 California Street
41st Floor, Unit #9973
San Francisco, California 94104
Attention: Chris Gernhard
Telecopy number: (415) 622-4585
Telephone number: (415) 953-5753
FACILITY A COMMITMENT FIRST UNION NATIONAL BANK
$10,666,666.67
By:___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$9,333,333.33 First Union National Bank
1 First Union Center
Charlotte, North Carolina 28288-0735
Attention: Steve Staples,
Director - Forest Products Group
Telecopy number: (704) 383-6670
Telephone number: (704) 374-4536
FACILITY A COMMITMENT FIRSTAR BANK MILWAUKEE, N.A.
$10,666,666.67
By:___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$9,333,333.33 Firstar Bank Milwaukee, N.A.
U. S. Banking
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Robert A. Flosbach
Telecopy number: (414) 765-5367
Telephone number: (414) 765-4438
FACILITY A COMMITMENT THE FUJI BANK, LIMITED
$10,666,666.67
By:___________________________ (SEAL)
Title:
FACILITY B COMMITMENT
Lending Office
$9,333,333.33 The Fuji Bank, Limited
225 West Wacker Drive, Suite 2000
Chicago, Illinois 60606
Attention: Steve Peca
Telecopy number: (312) 621-0539 or
(312) 419-3677
Telephone number: (312) 621-9484
_________________
TOTAL FACILITY A COMMITMENTS:
$400,000,000
TOTAL FACILITY B COMMITMENTS:
$350,000,000
LIST OF SCHEDULES AND EXHIBITS TO
CREDIT AGREEMENT
SCHEDULE 4.05 Description of Potential Litigation
SCHEDULE 4.13 Potentially Responsible Party Designation and Properties on
National Priorities List or CERCLIS List
EXHIBIT A-1 Form of Facility A Syndicated Note
EXHIBIT A-2 Form of Facility B Syndicated Note
EXHIBIT B-1 Form of Facility A Money Market Note
EXHIBIT B-2 Form of Facility B Money Market Note
EXHIBIT C Form of Opinion of Counsel for the Borrower
EXHIBIT D Form of Opinion of Special Counsel for the Agent
EXHIBIT E-1 Form of Facility A Money Market Quote Request
EXHIBIT E-2 Form of Facility B Money Market Quote Request
EXHIBIT F-1 Form of Facility A Money Market Quote
EXHIBIT F-2 Form of Facility B Money Market Quote
EXHIBIT G Form of Closing Certificate
EXHIBIT H Form of Secretary's Certificate
EXHIBIT I Form of Assignment and Acceptance
EXHIBIT J-1 Form of Facility A Notice of Borrowing
EXHIBIT J-2 Form of Facility B Notice of Borrowing
Public Affairs Department
Scott A. Deitz
Phone: (715) 422-4023 or
Tami Barber
Phone: (715) 422-3632
FOR IMMEDIATE RELEASE September 30, 1997
CONSOLIDATED PAPERS COMPLETES ACQUISITION OR REPAP USA
WISCONSIN RAPIDS, WIS. - Gorton M. Evans, president and chief executive
officer, and George W. Mead, Chairman of the board, of Consolidated Papers, Inc.
(NYSE: CDP), today announced that the company has completed the acquisition of
Repap USA, Inc., a wholly owned subsidiary of Repap Enterprises Inc. Repap USA
is the holding company for Repap Wisconsin, Inc. and Repap Sales Corporation.
The operations will now be called Inter Lake Papers, Inc., a company of
Consolidated Papers, Inc.
The completed transaction results in Consolidated's full ownership of the
acquired companies as of October 1, 1997. Consolidated paid $227 million in
cash and assumed $433 million of net debt and $14 million for postretirement
benefits of the acquired companies. The transaction totals $674 million and is
subject to certain postclosing adjustments based on September 30, 1997, audited
financial statements.
"This is a strategically significant addition for Consolidated Papers,"
Evans said. "The vision we share at Consolidated is to build the 21st century
through continuous improvement and growth. It is a rare acquisition opportunity
to add pulp and papermakers of the highest caliber like the people at Inter Lake
Papers. It is an equally rare opportunity to expand through acquisition in your
own neighborhood. We have achieved both with the addition of Inter Lake
Papers."
Inter Lake Papers, in Kimberly, Wisconsin, just 90 miles from
Consolidated's headquarters, manufactures coated papers for the printing and
publishing industries. The company's products are used for brochures,
advertising inserts, annual reports, catalogs and magazines. The mill has a
capacity of 508,000 tons of coated paper annually as well as an integrated
groundwood pulp mill, a 140,000-ton-per-year paper converting capability and a
paper recycling facility. The company has achieved ISO 9002 certification.
Employing approximately 1,000 people, the company reported 1996 sales of $405
million and 1995 sales of $510 million.
CONSOLIDATED PAPERS, INC. PROFILE
Consolidated Papers is North America's largest producer of coated printing
papers with an annual capacity of 1,330,000 tons. The company is also a major
manufacturer of supercalendered printing papers with an annual capacity of
240,000 tons. The company's coated and supercalendered printing papers are
produced primarily for the printing and publishing industries.
In addition, Consolidated Papers is the leading manufacturer of coated
specialty papers with an annual capacity of 180,000 tons. These papers are used
in consumer product packaging and labeling.
Consolidated Papers has the capacity to produce 370,000 tons annually of
kraft pulp for internal use using an elemental chlorine-free process. The
company also produces recycled pulp from post-consumer office wastepaper. Other
Consolidated products include paperboard, paperboard products and corrugated
displays and containers. Employing approximately 6,000 people, the company
reported 1996 sales of $1.5 billion and 1995 sales of $1.6 billion. The company
is headquartered in Wisconsin Rapids, Wisconsin.
