SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
ILLINOIS CENTRAL CORPORATION
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(Name of Issuer)
Common Stock,
$.001 Par Value
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(Title of Class of Securities)
136375102
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(CUSIP Number)
Winthrop B. Conrad, Jr.
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Tel. No.: (212) 450-4000
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
March 13, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d- 1(b)(3) or
(4), check the following box |_|.
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 16 Pages)
<PAGE>
13D
CUSIP No. 136375102 Page 2 of 16 pages
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(1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Blackhawk Merger Sub, Inc.
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(2) Check the Appropriate Box if a Member of a Group (a) |X|
(b) |_|
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(3) SEC Use Only
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(4) Source of Funds
WC, AF
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) |_|
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(6) Citizenship or Place of Organization
Delaware
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Number of (7) Sole Voting Power 0
Shares
Beneficially (8) Shared Voting Power 46,051,761
Owned by
Each (9) Sole Dispositive Power 0
Reporting
Person with (10) Shared Dispositive Power 46,051,761
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
46,051,761
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(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares |_|
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(13) Percent of Class Represented by Amount in Row (11)
74.4%
*See response to Item 5 below.
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(14) Type of Reporting Person
CO
13D
CUSIP No. 136375102 Page 3 of 16 pages
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(1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Grand Trunk Corporation
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(2) Check the Appropriate Box if a Member of a Group (a) |X|
(b) |_|
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(3) SEC Use Only
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(4) Source of Funds
WC, AF, BK
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(5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) |_|
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(6) Citizenship or Place of Organization
Delaware
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Number of (7) Sole Voting Power 0
Shares
Beneficially (8) Shared Voting Power 46,051,761
Owned by
Each (9) Sole Dispositive Power 0
Reporting
Person with (10) Shared Dispositive Power 46,051,761
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
46,051,761
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(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares |_|
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(13) Percent of Class Represented by Amount in Row (11)
74.4%
*See response to Item 5 below.
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(14) Type of Reporting Person
CO, HC
13D
CUSIP No. 136375102 Page 4 of 16 pages
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(1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Canadian National Railway Company
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(2) Check the Appropriate Box if a Member of a Group (a) |X|
(b) |_|
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(3) SEC Use Only
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(4) Source of Funds
WC, BK
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) |_|
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(6) Citizenship or Place of Organization
Canada
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Number of (7) Sole Voting Power 0
Shares
Beneficially (8) Shared Voting Power 46,051,761
Owned by
Each (9) Sole Dispositive Power 0
Reporting
Person with (10) Shared Dispositive Power 46,051,761
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
46,051,761
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(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares |_|
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(13) Percent of Class Represented by Amount in Row (11)
74.4%
*See response to Item 5 below.
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(14) Type of Reporting Person
CO, HC
13D
CUSIP No. 136375102 Page 5 of 16 pages
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(1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
The Bank of New York, as Voting Trustee
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(2) Check the Appropriate Box if a Member of a Group (a) |_|
(b) |_|
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(3) SEC Use Only
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(4) Source of Funds
N/A
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) |_|
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(6) Citizenship or Place of Organization
New York
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Number of (7) Sole Voting Power 0
Shares
Beneficially (8) Shared Voting Power 46,051,761
Owned by
Each (9) Sole Dispositive Power 0
Reporting
Person with (10) Shared Dispositive Power 46,051,761
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
46,051,761
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(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares |_|
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(13) Percent of Class Represented by Amount in Row (11)
74.4%
*See response to Item 5 below.
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(14) Type of Reporting Person
BK
Item 1. Security and Issuer.
This statement relates to the common stock, par value $.001 per share
(the "IC Common Stock"), of Illinois Central Corporation, a Delaware corporation
("IC"). The principal executive offices of IC are located at 455 North Cityfront
Plaza, Chicago, Illinois 60611-5504.
Item 2. Identity and Background.
This statement is filed by Blackhawk Merger Sub, Inc. ("Merger Sub"),
Grand Trunk Corporation ("GTC"), Canadian National Railway Company ("CN") and
The Bank of New York (the "Trustee"; CN, GTC, Merger Sub and the Trustee,
collectively, the "Reporting Persons"). Merger Sub is a wholly-owned subsidiary
of GTC and GTC is a wholly-owned subsidiary of CN. Merger Sub and GTC are
organized under the laws of Delaware. CN is organized under the laws of Canada.
The Trustee is organized under the laws of New York. The address of the
principal business and principal office of Merger Sub, GTC and CN is 935 de La
Gauchetiere Street West, Montreal, Quebec, Canada H3B 2M9. The address of the
principal corporate trust office of the Trustee is 101 Barclay Street, New York,
New York 10286.
CN operates the larger of Canada's two principal railroads and is the
sixth largest railroad in North America based on its 1997 annual revenues. GTC
is a holding company for CN's operations in the United States. Merger Sub was
incorporated on February 3, 1998 and to date has engaged in no activities other
than those undertaken in connection with the Offer (as defined in Item 4) and
the Merger (as defined in Item 4). The Trustee's principal business is the
provision of commercial banking, custody, trust and other financial services.
Pursuant to Rule 13d-4 (17 CFR 240.13d-4) under the Exchange Act, the Trustee
hereby declares that the filing of this statement shall not be construed as an
admission that the Trustee is for purposes of Sections 13(d) or 13(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the beneficial
owner of any securities covered by this statement.
During the past five years, none of the Reporting Persons have been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), nor have they been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
been subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to United States federal or
state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Consideration
The total amount of funds required by CN and Merger Sub to consummate
the Offer and the Merger and to pay related fees and expenses is estimated to be
approximately US$1.8 billion. Merger Sub obtained the necessary funds from
capital contributions and advances made directly or indirectly by CN and the
U.S. Borrower (as defined below), including borrowings under the Credit
Facilities referred to below. CN and certain of its subsidiaries have entered
into two credit agreements each dated as of March 16, 1998 (collectively, the
"Loan Agreements") with Goldman Sachs Canada Credit Partners Co. ("Goldman
Canada"), Goldman Sachs Credit Partners L.P. ("Goldman Credit LP") and Bank of
Montreal ("BMO") and certain other lenders (with Goldman Credit LP, Goldman
Canada and BMO, the "Lenders") pursuant to which the Lenders severally committed
to provide senior credit facilities (the "Credit Facilities") in an aggregate
principal amount of up to US$1.8 billion. A copy of each Loan Agreement is filed
as an exhibit to this filing and is incorporated herein by reference, and the
following summary of the Loan Agreements and the Credit Facilities provided for
herein is qualified in its entirety by reference thereto.
The borrowers under the Credit Facilities are CN and a U.S. subsidiary
of CN (the "U.S. Borrower" and, together with CN, the "Borrowers"). CN, at its
option, may add other subsidiaries as borrowers under the Credit Facilities. The
Credit Facilities in the aggregate consist of a US$800 million term loan
facility (the "Term Facility") and a US$1 billion revolving credit facility (the
"Revolving Facility"). At the option of CN, a portion of the Revolving Facility
is available in Canadian Dollars. In addition, up to $200 million of the
Revolving Facility will be available for letters of credit. Proceeds of
borrowing under the Credit Facilities are to be used to finance the Offer, will
be used to pay related fees and expenses in connection therewith and with the
Merger, to finance certain outstanding indebtedness of CN and, in the case of
the Revolving Facility only, may also be used for general corporate purposes,
including working capital purposes and commercial paper backstop. On March 24,
1998, CN and the U.S. Borrower will draw down funds under the Term Facility and
the Revolving Facility, which together with existing working capital, will be
used to purchase the shares of IC Common Stock pursuant to the Offer.
Borrowings under the Credit Facilities will mature, one year in the case of
the Term Facility, or five years in the case of the Revolving Facility, from the
date of initial drawdown under the Credit Facilities, and will bear interest at
a rate per annum equal to, at the option of the Borrowers, (i) the Eurodollar
Rate plus a margin (the "Applicable Margin"), initially expected to be 0.275%
per annum, which will vary based on CN's unsecured long term senior debt rating,
(ii) the Base Rate and (iii) in the case of Revolving Facility borrowings in
Canadian Dollars only, the Canadian Bankers Acceptance Rate plus the Applicable
Margin; provided that during any period when more than $900 million of the
Credit Facilities in the aggregate are drawn and outstanding, the Applicable
Margin shall be increased by 0.05% per annum. The Credit Facilities provide for
a facility fee payable on the aggregate amount of the Revolving Facility
(whether drawn or undrawn) and the aggregate outstanding principal amount of the
loans under the Term Facility at a rate per annum that is initially expected to
be 0.125% and that will vary based on CN's unsecured long term senior debt
rating. The Credit Facilities contain certain negative covenants applicable to
CN and its subsidiaries, including, without limitation, restrictions on liens
and mergers and acquisitions and the following financial covenants; maximum debt
to total capitalization, minimum tangible net worth requirement and, solely if
CN's unsecured long term senior debt ratings remains below a certain threshold,
minimum fixed charge coverage.
All borrowings and issuances of letters of credit under the Credit
Facilities, including the initial borrowings, are subject to the satisfaction or
waiver of certain conditions, including, without limitation: (i) the accuracy of
representations and warranties, (ii) the absence of any default or event of
default under the Credit Facilities and (iii) the non-occurrence of any material
adverse change in respect of CN or IC.
Amounts outstanding under the Credit Facilities are cross-guaranteed by CN
and the other Borrower and by all present and future material subsidiaries of
CN, provided that IC and its subsidiaries are not required to provide any such
guarantees until permitted by law to do so and Canadian National Railway
Properties Inc. has provided such guarantee only to the extent permitted by
applicable law for borrowers other than CN. The terms of the Credit Facilities
provide that, while the Voting Trust is in effect, net proceeds generated from
sales of shares of IC Common Stock or from asset sales by IC and its
subsidiaries (subject to certain exceptions) actually received by CN and its
subsidiaries (other than any subsidiaries held through the Voting Trust) are to
be applied first to repay outstandings under the Term Facility and second to
repay outstandings under the Revolving Facility and to reduce commitments
thereunder, unless, in the case of the Revolving Facility, at the time of
receipt of such proceeds CN's unsecured long-term senior debt rating is above a
certain threshold and the commitments under the Revolving Facility do not exceed
US$700 million.
Pursuant to the Loan Agreements and the commitment letter related
thereto, CN paid certain fees to Goldman Canada, Goldman Credit L.P. and BMO and
has agreed to reimburse the Lenders for certain expenses and to provide certain
indemnities, as is customary for commitments of the type described herein.
Item 4. Purpose of the Transaction
On February 10, 1998, CN, Merger Sub and Illinois Central Corporation
("IC") entered into an Agreement and Plan of Merger (the "Merger Agreement"), as
amended on March 4, 1998, whereby CN will acquire IC for a purchase price of
approximately $1.8 billion payable as to 75% in cash and 25% in common shares of
CN. As a first-step in the acquisition, on February 13, 1998, CN and Merger Sub
launched their cash tender offer (the "Offer") for up to 46,051,761 shares of IC
Common Stock (representing approximately 75% of the outstanding shares of IC) at
a cash price of $39.00 per share. On March 13, 1998, Merger Sub successfully
completed its Offer. The Merger Agreement also provides for a second-step merger
(the "Merger") of Merger Sub with and into IC, with IC, as the surviving
corporation (the "Surviving Corporation"), becoming an indirect wholly-owned
subsidiary of CN. Pursuant to the Merger Agreement, the remaining 25% of the
shares of IC Common Stock not acquired in the Offer will be exchanged for shares
of CN common stock with a value equal to the same cash price paid in the tender
offer, subject to certain collar arrangements.
Pursuant to the Merger Agreement, the shares of IC Common Stock
acquired in the Offer, as well as those of the Surviving Corporation to be
acquired in the Merger, will be placed, upon completion of the Offer, in an
irrevocable voting trust (the "Voting Trust") pending approval of the
transaction by the United States Surface Transportation Board (the "STB"). CN,
Merger Sub and the Trustee have entered into a voting trust agreement (the
"Voting Trust Agreement") dated as of March 13, 1998, pursuant to which, inter
alia, the Trustee has agreed to act as trustee (the "Trustee") of the Voting
Trust.
Following the Offer, Merger Sub beneficially owns approximately 74.4%
of the outstanding shares of IC Common Stock. Therefore, Merger Sub (through the
voting trust arrangements) has sufficient voting power under Delaware law to
effect the adoption of the Merger Agreement without the affirmative vote or
written consent of any other IC stockholder. The Merger is expected to be
consummated during the second calendar quarter of 1998.
Pursuant to the terms of the Merger Agreement, CN and IC will file an
application with the STB prior to the end of the second quarter of 1998 to seek
approval by the STB of CN's acquisition of control of IC. STB approval may take
up to 15 months and CN and IC intend to request the STB to expedite the approval
process. STB approval is expected in early 1999.
Pursuant to the Merger Agreement, IC has granted registration rights to
CN that entitles CN to three registration rights within three years from the
termination of the Merger Agreement in order to allow CN to sell or dispose of
any or all of the shares held in the Voting Trust.
Pursuant to the terms of the Merger Agreement, CN will (i) appoint Mr.
E. Hunter Harrison (formerly the President and Chief Executive Officer and a
director of IC) to the position of Chief Operating Officer of CN, and (ii)
appoint Messrs. Gilbert H. Lamphere (formerly IC's Chairman of the Board of
Directors) and Alexander P. Lynch (formerly a director of IC) to the Board of
Directors of CN. Messrs. Lamphere, Lynch and Harrison have resigned from their
positions with IC.
Pursuant to the terms of the Merger Agreement, and subject to the
rules, regulations and practices of the STB, CN has appointed Mr. Edward D.
Sleven, an individual who was previously identified to IC and reasonably
satisfactory to the Board of Directors of IC, to the Board of Directors of IC
immediately following the resignations of Messrs. Lamphere and Lynch from the
Board of Directors of IC. Mr. Sleven is independent of CN.
Following the Merger, the shares of IC Common Stock will be delisted
from the NYSE and deregistered under the Exchange Act.
Item 5. Interest in the Securities of the Issuer.
(a) As of March 13, 1998, pursuant to the Offer, Merger Sub had
acquired, and for purposes of Rule 13d-3 promulgated under the Exchange Act may
be deemed to own beneficially, 46,051,761 shares of IC Common Stock,
representing approximately 74.4% of the total number of shares of IC Common
Stock outstanding.
GTC, as the sole stockholder of Merger Sub, has the power to direct the
voting and disposition by Merger Sub of the shares of IC Common Stock owned by
Merger Sub.
CN, as the sole stockholder of GTC, has the power to control the
actions of GTC with respect to the voting and disposition of the shares of IC
Common Stock owned by Merger Sub. Accordingly, each of CN, GTC and Merger Sub
may be deemed to have shared voting and dispositive power with respect to the
46,051,761 shares of IC Common Stock beneficially owned by Merger Sub.
The Trustee, in its capacity as Trustee of the Voting Trust, holds the
46,051,761 shares of IC Common Stock acquired by Merger Sub in the Offer in
trust on behalf of Merger Sub, pursuant to the provisions of the Voting Trust
Agreement. Accordingly, the Trustee may be deemed to have shared voting and
dispositive power with respect to such shares of IC Common Stock beneficially
owned by Merger Sub.
(b) Except as otherwise described herein, the Reporting Persons do not
have any sole or shared power to vote or to direct the vote of any shares of IC
Common Stock nor sole or shared power to dispose of or direct the disposition of
any shares of IC Common Stock.
(c) Except for the transactions described in Item 4 hereof, no
transactions in shares of IC Common Stock have been effected during the past 60
days by any Reporting Persons nor by any other person controlling any Reporting
Persons.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
In addition to the Voting Trust Agreement and the arrangements
described in Item 4, in connection with the transaction, Mr. Lamphere and Mr.
Lynch have each entered into agreements with CN pursuant to which Messrs.
Lamphere and Lynch have each agreed to roll-over 100% of their existing options
to purchase shares of IC Common Stock into options to purchase shares of CN
Common Stock and to vote their shares of IC Common Stock in favor of the
adoption by the stockholders of the Merger Agreement. Mr. Lamphere has also
agreed to acquire, within 90 days following the date of the consummation of the
Merger, at least 98,150 (including any shares of CN Common Stock received
pursuant to the Merger) shares of CN common stock; provided that Mr. Lamphere is
not obligated to invest an amount in excess of $7,000,000 (including the spread
value of the options rolled-over to CN options). Any required acquisitions of
shares by Mr. Lamphere (other than pursuant to the Merger) will be made in the
open market at market prices.
Except for the agreements described above, to the best knowledge of the
Reporting Persons, there are no contracts, arrangements, understandings or
relationships (legal or otherwise) between the persons enumerated in Item 2, and
any other person, with respect to any securities of IC, including, but not
limited to, transfer or voting of any of the securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or, or the giving or withholding of proxies.
Item 7. Material Filed as Exhibits.
2. Agreement and Plan of Merger dated as of February 10, 1998 among CN,
Merger Sub and IC, as amended by Amendment No. 1 dated as of March 4,
1998.*
4.1 Voting Trust Agreement dated March 13, 1998 among CN, Merger Sub and The
Bank of New York.****
4.2 $1,080,000,000 Credit Agreement by and among CN and the other parties
thereto, dated as of March 16, 1998.****
4.3 $720,000,000 Credit Agreement by and among GTC and the other parties
thereto, dated as of March 16, 1998.****
10.1. Investment Commitment Agreement dated as of February 10, 1998 between CN
and Gilbert H. Lamphere.**
10.2 Investment Commitment Agreement dated as of February 10, 1998 between CN
and Alexander P. Lynch.***
- --------
* Filed as Exhibit (c)(1) to IC's Schedule 14D-9 filed on February 13, 1998
and incorporated herein by reference.
** Filed as Exhibit (c)(3) to IC's Schedule 14D-9 filed on February 13,
1998 and incorporated herein by reference.
*** Filed as Exhibit (c)(4) to IC's Schedule 14D-9 filed on February 13,
1998 and incorporated herein by reference.
**** Filed herewith.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
accurate.
Dated: March 23, 1998
CANADIAN NATIONAL RAILWAY
COMPANY
By: /s/ Brigitte K. Catellier
------------------------------------
Name: Brigitte K. Catellier
Title: Associate Secretary
GRAND TRUNK CORPORATION
By: /s/ Brigitte K. Catellier
------------------------------------
Name: Brigitte K. Catellier
Title: Assistant Secretary
BLACKHAWK MERGER SUB, INC.
By: /s/ Brigitte K. Catellier
------------------------------------
Name: Brigitte K. Catellier
Title: Secretary
The filing of this statement by The Bank of New York shall not be construed
as an admission that The Bank of New York is, for the purposes of Section 13(d)
or 13(g) of the Exchange Act of 1934, as amended, the beneficial owner of any
securities described in this Schedule 13D.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
accurate with respect to The Bank of New York and the Voting Trust.
THE BANK OF NEW YORK,
solely as Voting Trustee
By: /s/ W.T. Cunningham
------------------------------------
Name: W.T. Cunningham
Title: Vice-President
Exhibit 4
THIS VOTING TRUST AGREEMENT, dated as of March 13, 1998, by and among
Canadian National Railway Company, a Canadian corporation ("Parent"), Blackhawk
Merger Sub, a Delaware corporation and an indirect wholly owned subsidiary of
Parent ("Merger Subsidiary") and The Bank of New York, a New York banking
corporation (the "Trustee"),
W I T N E S S E T H:
WHEREAS, it is intended that Merger Subsidiary will commence and
complete a cash tender offer (the "Offer") for up to an aggregate of [ ]
outstanding shares of common stock ("Shares") of Blackhawk, a Delaware
corporation (the "Company") to be followed by a merger of Merger Subsidiary with
and into the Company (the "Merger") pursuant to, and upon the terms and
conditions set forth in, the Agreement and Plan of Merger dated as of February
16, 1998 among the Company, Parent and Merger Subsidiary, as it may be amended
from time to time (the "Merger Agreement") (a copy of which is attached hereto
as Exhibit A);
WHEREAS, it is intended that the consummation of the Merger will occur
prior to any issuance by the Surface Transportation Board (the "STB") of any
required approval for, or exemption of, Parent's control of the Company;
WHEREAS, Parent and Merger Subsidiary intend, simultaneously with the
acquisition of the Shares of the Company pursuant to the Offer and pursuant to
the Merger (the corporation surviving the Merger also referred to herein as the
"Company"), to cause the deposit of such shares in an independent, irrevocable
voting trust, pursuant to the rules of the STB, in order to avoid any allegation
or assertion that Parent or any of its affiliates is controlling or has the
power to control the Company prior to the receipt of any required STB approval
or exemption;
WHEREAS, neither the Trustee nor any of its affiliates has any officers
or board members in common or any direct or indirect business arrangements or
dealings (as described in Paragraph 9 hereof) with Parent or any of its
affiliates; and
WHEREAS, the Trustee is willing to act as voting trustee pursuant to
the terms of this Trust Agreement and the rules of the STB,
NOW, THEREFORE, the parties hereto agree as follows:
1. Parent and Merger Subsidiary hereby appoint The Bank of New York as
Trustee hereunder, and The Bank of New York hereby accepts said appointment and
agrees to act as Trustee under this Trust Agreement as provided herein.
2. Parent and Merger Subsidiary agree that, prior to acceptance of any
tendered Shares pursuant to the Offer, Merger Subsidiary will direct the
depositary for the offer to transfer to the Trustee any Shares accepted for
payment pursuant to the Offer. Parent and Merger Subsidiary also agree that
immediately upon receipt, acquisition or purchase by either of them or by any of
their affiliates of any additional Shares, or any other voting securities of the
Company, it will transfer or cause to be transferred to the Trustee the
certificate or certificates representing such additional Shares or other
securities. Parent also agrees that, simultaneously with the effectiveness of
the Merger, Parent will cause the transfer to the Trustee of the certificate or
certificates representing 100 percent of the issued and outstanding shares of
the Company, as the corporation surviving the Merger. All such certificates
shall be duly endorsed or accompanied by proper instruments duly executed for
transfer thereof to the Trustee, and shall be exchanged for one or more Voting
Trust Certificates substantially in the form attached hereto as Attachment A
(the "Trust Certificates"), with the blanks therein appropriately filled. All
Shares at any time delivered to the Trustee hereunder are hereinafter called the
"Company Trust Stock." The Trustee shall present to the Company all certificates
representing Company Trust Stock for surrender and cancellation and for the
issuance and delivery to the Trustee of new certificates (the "Trust Stock")
registered in the name of the Trustee or its nominee.
3. The Trustee shall be present, in person or represented by proxy, at
all annual and special meetings of shareholders of the Company so that all Trust
Stock may be counted for the purposes of determining the presence of a quorum at
such meetings. The Trustee shall be entitled and it shall be its duty to
exercise any and all voting rights in respect of the Trust Stock either in
person or by proxy or consent, as hereinafter provided, unless otherwise
directed by an order of the STB or a court of competent jurisdiction. Parent and
Merger Subsidiary agree, and the Trustee acknowledges, that the Trustee shall
not participate in or interfere with the management of the Company and shall
take no other actions with respect to the Company except in accordance with the
terms hereof. The Trustee shall exercise all voting rights in respect of the
Trust Stock in favor of any proposal or action necessary or desirable to effect,
or consistent with the effectuation of, the acquisition of the Company by Parent
and Merger Subsidiary pursuant to the Merger Agreement and, without limiting the
generality of the foregoing, if there shall be with respect to the Board of
Directors of the Company an "Election Contest" as defined in the Proxy Rules of
the Securities and Exchange Commission (the "SEC"), in which one slate of
nominees shall support the effectuation of the Merger and another oppose it,
in favor of the slate supporting the effectuation of the Merger. In addition,
for so long as the Merger Agreement is in effect, the Trustee shall vote all
shares of Trust Stock to cause any other proposed merger, business combination
or similar transaction (including, without limitation, any consolidation, sale
of all or substantially all the assets, reorganization, recapitalization,
liquidation or winding up of or by the Company) involving the Company, but not
involving Parent or one of its affiliates (other than in connection with a
disposition pursuant to paragraph 8), not to be effected. The Trustee shall vote
all shares of Trust Stock in favor of any proposal or action necessary or
desirable to dispose of Trust Stock in accordance with Paragraph 8 hereof.
Except as otherwise expressly provided in the three immediately preceding
sentences, the Trustee shall vote all shares of Trust Stock with respect to all
matters, including, without limitation, the election or removal of directors,
voted on by the shareholders of the Company (whether at a regular or special
meeting or pursuant to a unanimous written consent) in the Trustee's sole
discretion, having due regard for the interests of the holders of the Trust
Certificates as investors in the Company, determined without reference to such
holders' interests in railroads other than the Company or its subsidiaries;
provided that the Trustee shall not vote the Trust Stock in favor of taking or
doing any act which would violate any provision of the Merger Agreement or
impede the Company's performance thereunder or which if taken or done prior to
the consummation of the Merger would have been a violation of the Merger
Agreement. Notwithstanding the foregoing provisions of this Paragraph 3 or any
other provision of this Agreement, the registered holder of a Trust Certificate
may at any time -- but only with the prior written approval of the STB --
instruct the Trustee in writing to vote the Trust Stock represented by such
Trust Certificate in any manner, in which case the Trustee shall vote such
shares in accordance with such instructions. In exercising its voting rights in
accordance with this Paragraph 3, the Trustee shall take such actions at all
annual, special or other meetings of stockholders of the Company or in
connection with any action by consent in lieu of a meeting.
4. This Trust Agreement and the nomination of the Trustee during the
term of the trust shall be irrevocable by Parent and its affiliates and shall
terminate only in accordance with the provisions of Paragraphs 8 and 14 hereof.
5. Subject to Paragraph 3, the Trustee shall not exercise the voting
powers of the Trust Stock in any way so as to create any dependence or
intercorporate relationship between (i) Parent and its affiliates, on the one
hand, and (ii) the Company or its affiliates, on the other hand. The term
"affiliate" or "affiliates" wherever used in this Trust Agreement shall have the
meaning specified in Section 11323(c) of Title 49 of the United States Code, as
amended. The Trustee shall not, without the prior approval of the STB, vote the
Trust Stock to elect any officer, director, nominee or representative of Parent
or any of its affiliates as an officer or director of the Company or of any
affiliate of the Company. The Trustee shall be kept informed respecting the
business operations of the Company by means of the financial statements and
other public disclosure documents periodically filed by the Company and
affiliates of the Company with the SEC and with the STB, and by means of
information respecting the Company contained in such statements and other
documents filed by Parent with the SEC and the STB, copies of which shall be
promptly furnished to the Trustee by the Company or Parent, as the case may be,
and the Trustee shall be fully protected in relying upon such information. The
Trustee shall not be liable for any mistakes of fact or law or any error of
judgment, or for any act or omission, except as a result of the Trustee's
willful misconduct or gross negligence.
6. All Trust Certificates shall be transferable on the books of the
Trustee by the registered holder upon the surrender thereof properly assigned,
in accordance with rules from time to time established for the purpose by the
Trustee. Until so transferred, the Trustee may treat the registered holder as
owner for all purposes. Each transferee of a Trust Certificate issued hereunder
shall, by his acceptance thereof, assent to and become a party to this Trust
Agreement, and shall assume all attendant rights and obligations.
7. Pending the termination of this Trust as hereinafter provided, the
Trustee shall, immediately following the receipt of each cash dividend or cash
distribution as may be declared and paid upon the Trust Stock, pay the same over
to or as directed the registered holder(s) of Trust Certificates hereunder as
then known to the Trustee. The Trustee shall receive and hold dividends and
distributions other than cash upon the same terms and conditions as the Trust
Stock and shall issue Trust Certificates representing any new or additional
securities that may be paid as dividends upon the Trust Stock or otherwise
distributed upon the Trust Stock to the registered holder(s) of Trust
Certificates in proportion to their respective interests.
8. (a) This Trust is accepted by the Trustee subject to the right
hereby reserved in Parent at any time to sell or make any other disposition of
the whole or any part of the Trust Stock, whether or not an event described in
subparagraph (b) below has occurred. The Trustee shall take all actions
reasonably requested by Parent with respect to (including, without limitation,
exercising all voting rights in respect of Trust Stock in favor of any proposal
or action necessary or desirable to effect, or consistent with the effectuation
of) any proposed sale or other disposition of the whole or any part of the Trust
Stock by Parent. The Trustee shall at any time upon the receipt of a direction
from Parent signed by its President or one of its Vice Presidents and under its
corporate seal designating the person or entity to whom Parent has directly or
indirectly sold or otherwise disposed of the whole or any part of the Trust
Stock and certifying that such person or entity is not an affiliate of Parent
and has all necessary regulatory authority, if any be required, to purchase the
Trust Stock (upon which certification the Trustee shall be entitled to rely),
immediately transfer to the person or entity therein named all the Trustee's
right, title and interest in such amount of the Trust Stock as may be set forth
in said direction. If the foregoing direction shall specify all of the Trust
Stock, then following transfer of the Trustee's right, title and interest
therein, and in the event of a sale thereof, upon delivery to or upon the order
of the registered holder(s) of the Trust Certificates of the proceeds of such
sale, this Trust shall cease and come to an end. If the foregoing direction is
as to only a part of the Trust Stock, then this Trust shall cease as to said
part upon such transfer, and distribution of the net proceeds therefrom in the
event of sale, but shall remain in full force and effect as to the remaining
part of the Trust Stock. In the event of a direct or indirect sale of Trust
Stock by Parent, the Trustee shall, to the extent the consideration therefor is
payable to or controllable by the Trustee, promptly pay, or cause to be paid
upon the order of Parent the net proceeds of such sale on a pro rata basis to
the registered holder(s) of the Trust Certificates. It is the intention of this
paragraph that no violations of 49 U.S.C. Sections 11323 will result from a
termination of this Trust.
(b) In the event the STB Approval (as defined below) shall
have been granted, then immediately upon the direction of Parent and the
delivery of a certified copy of such order of the STB or other governmental
authority with respect thereof, or, in the event that Subtitle IV of Title 49 of
the United States Code, or other controlling law, is amended to allow Parent or
its affiliates to acquire control of the Company without obtaining STB or other
governmental approval, upon delivery of an opinion of independent counsel
selected by the Trustee that no order of the STB or other governmental authority
is required, the Trustee shall either (i) transfer to or upon the order of the
registered holder(s) of Trust Certificates hereunder as then known to the
Trustee, its right, title and interest in and to all of the Trust Stock then
held by it in accordance with the terms, conditions and agreements of this Trust
Agreement and not theretofore transferred by it as provided in subparagraph (a)
hereof, or (ii) if shareholder approval of the Merger has not previously been
obtained, vote the Trust Stock with respect to the Merger or any other merger
between the Company and Merger Subsidiary or any other affiliate of Parent as
directed by the registered holder(s) of the Trust Certificates; and upon any
such transfer or merger this Trust shall cease and come to an end.
- 5 -
<PAGE>
(c) In the event that there shall have been an STB Denial (as
defined below), Parent shall use its best efforts to sell the Trust Stock to one
or more eligible purchasers, or otherwise to dispose of the Trust Stock, during
a period of two years after such STB Denial or such extension of that period as
the STB shall approve. Any such disposition shall be subject to any jurisdiction
of the STB to oversee Parent's divestiture of Trust Stock. At all times, the
Trustee shall continue to perform its duties under this Trust Agreement and,
should Parent be unsuccessful in its efforts to sell or distribute the Trust
Stock during the period referred to, the Trustee shall as soon as practicable
sell the Trust Stock for cash to one or more eligible purchasers in such manner
and for such price as the Trustee in its discretion shall deem reasonable after
consultation with the Parent. (An "eligible purchaser" hereunder shall be a
person or entity that is not affiliated with the Parent and which has all
necessary regulatory authority, if any be required, to purchase the Trust
Stock.) Parent agrees to cooperate with the Trustee in effecting such
disposition, and the Trustee agrees to act in accordance with any direction made
by Parent as to any specific terms or method of disposition, to the extent not
inconsistent with the requirements of the terms of any STB or court order. The
proceeds of the sale shall be distributed on a pro rata basis to or upon the
order of the registered holder(s) of the Trust Certificates hereunder as then
known to the Trustee. The Trustee may, in its reasonable discretion, require the
surrender to it of the Trust Certificates hereunder before paying to the holder
his share of the proceeds. Upon disposition of the Trust Stock pursuant to this
Paragraph 8(c), this Trust shall cease and come to an end.
(d) Unless sooner terminated pursuant to any other provision
herein contained, this Trust Agreement shall terminate on March 13, 2003, and
may be extended by the parties hereto, so long as no violation of 49 U.S.C.
Sections 11323 will result from such termination or extension. All Trust Stock
and any other property held by the Trustee hereunder upon such termination shall
be distributed on a pro rata basis to or upon the order of the registered
holder(s) of Trust Certificates hereunder as then known to the Trustee. The
Trustee may, in its reasonable discretion, require the surrender to it of the
Trust Certificates hereunder before the release or transfer of the stock
interests evidenced thereby.
(e) The Trustee shall promptly inform the STB of any transfer
or disposition of Trust Stock pursuant to this Paragraph 8.
(f) Except as provided in this Paragraph 8, the Trustee shall
not dispose of, or in any way encumber, the Trust Stock.
(g) Notwithstanding the foregoing, if the STB issues a
declaratory order that the termination of the Trust will not cause Parent or its
affiliates to have control of the Company, the Trustee shall transfer on a pro
rata basis to or upon the order of the registered holder(s) of Trust
Certificates hereunder as then known to the Trustee, its right, title and
interest in and to all of the Trust Stock then held by it in accordance with the
terms and conditions of this Trust Agreement and not theretofore transferred by
it as provided in subparagraph (a) hereof, and this Trust shall cease and come
to an end. The Trustee may, in its reasonable discretion, require the surrender
to it of the Trust Certificates hereunder before the release or transfer of the
stock interests evidenced thereby.
(h) As used in this Paragraph 8, the terms "STB Approval" and
"STB Denial" shall have the following meanings:
"STB Approval" means the issuance by the STB of a
decision, which decision shall become effective and which
decision shall not have been stayed or enjoined, that (A)
constitutes a final agency action approving, exempting or
otherwise authorizing the acquisition of control over the
Company's railroad operations by Parent and its affiliates,
without the imposition of conditions that Parent, by written
notice to the Trustee, has deemed to be unacceptable, and (B)
does not require any change in the consideration paid or to be
paid pursuant to the Merger Agreement or other material
provisions thereof, unless Parent, by written notice to the
Trustee, has determined any such change to be acceptable to
Parent.
"STB Denial" means (i) STB Approval shall not have
been obtained by December 31, 2000 or (ii) the STB shall
have, by an order which shall have become final and no longer
subject to review by the courts, refused to approve the
control referred to in clause (A) of the definition of STB
Approval.
9. Neither the Trustee nor any affiliate of the Trustee may have (i)
any officers, or members of their respective boards or directors, in common with
Parent or any of its affiliates, or (ii) any direct or indirect business
arrangements or dealings, financial or otherwise, with Parent or any of its
affiliates, other than dealings pertaining to establishment and carrying out of
this Trust. Mere investment in the stock or securities of Parent or any of its
affiliates by the Trustee, short of obtaining a controlling interest, will not
be considered a proscribed business arrangement or dealing, but in no event
shall any such investment by the Trustee in voting securities of Parent or its
affiliates exceed 5 percent of their outstanding voting securities; and in no
event shall the Trustee hold a proportion of such voting securities so
substantial as to permit the Trustee in any way to control or direct the affairs
of Parent or its affiliates. Neither Parent nor its affiliates shall purchase
the stock or securities of the Trustee or any affiliate of the Trustee.
10. The Trustee shall be entitled to receive reasonable and customary
compensation for all services rendered by it as Trustee under the terms hereof,
and said compensation to the Trustee, together with all counsel fees, taxes, or
other expenses reasonably incurred hereunder, shall be promptly paid by Parent.
11. The Trustee may at any time or from time to time appoint an agent
or agents and may delegate to such agent or agents the performance of any
administrative duty of the Trustee and be entitled to reimbursement for the fees
and expenses of such agents.
12. The Trustee shall not be answerable for the default or misconduct
of any agent or attorney appointed by it in pursuance hereof if such agent or
attorney shall have been selected with reasonable care. The duties and
responsibilities of the Trustee shall be limited to those expressly set forth in
this Trust Agreement. The Trustee shall be fully protected by acting in reliance
upon any notice, advice, direction or other document or signature believed by
the Trustee to be genuine. The Trustee shall not be responsible for the
sufficiency or accuracy of the form, execution, validity or genuineness of the
Trust Stock, or of any other documents, or of any endorsement thereon, or for
any lack of endorsement thereon, or for any description therein, nor shall the
Trustee be responsible or liable in any respect on account of the identity,
authority or rights of the persons executing or delivering or purporting to
execute or deliver any such Trust Stock or other document or endorsement or this
Trust Agreement, except for the execution and delivery of this Trust Agreement
by this Trustee. The Parent agrees that it will at all times protect, indemnify
and save harmless the Trustee from any loss, damages, liability, cost or expense
of any kind or character whatsoever in connection with this Trust, except those,
if any, resulting from the gross negligence or willful misconduct of the
Trustee, and will at all times undertake, assume full responsibility for, and
pay on a current basis, but at least quarterly, all cost and expense of any suit
or litigation of any character, whether or not involving a third party,
including any proceedings before the STB, with respect to the Trust Stock or
this Trust Agreement, and if the Trustee shall be made a party thereto, or be
the subject of any investigation or proceeding (whether formal or informal), the
Parent will pay all costs, damages and expenses, including reasonable counsel
fees, to which the Trustee may be subject by reason thereof; provided, however,
that Parent shall not be responsible for the cost and expense of any suit that
the Trustee shall settle without first obtaining Parent's written consent. The
indemnification obligations of Parent shall survive any termination of this
Trust Agreement or the removal, resignation or other replacement of the Trustee.
The Trustee may consult with counsel selected by it and the opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken or omitted or suffered by the Trustee hereunder in good faith
and in accordance with such opinion.
13. To the extent requested to do so by Parent, Merger Subsidiary or
any registered holder of a Trust Certificate, the Trustee shall furnish to the
party making such request full information with respect to (i) all property
theretofore delivered to it as Trustee, (ii) all property then held by it as
Trustee, and (iii) all action theretofore taken by it as Trustee.
14. The Trustee, or any trustee hereafter appointed, may at any time
resign by giving sixty days' written notice of resignation to Parent, Merger
Subsidiary and the STB. Parent shall at least fifteen days prior to the
effective date of such notice appoint a successor trustee which shall (i)
satisfy the requirements of Paragraph 9 hereof and (ii) be a corporation
organized and doing business under the laws of the United States or of any State
thereof and authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by federal or state authority. If no successor
trustee shall have been appointed and shall have accepted appointment at least
fifteen days prior to the effective date of such notice of resignation, the
resigning Trustee may petition any authority or court of competent jurisdiction
for the appointment of a successor trustee. Upon written assumption by the
successor trustee of the Trustee's powers and duties hereunder a copy of the
assumption shall be delivered by the Trustee to Parent and to Merger Subsidiary,
and the STB and all registered holders of Trust Certificates shall be notified
of such assumption, whereupon the Trustee shall be discharged of its powers and
duties hereunder and the successor trustee shall become vested therewith. In the
event of any material violation by the Trustee of the terms and conditions of
this Trust Agreement, the Trustee shall become disqualified from acting as
trustee hereunder as soon as a successor trustee shall have been selected in the
manner provided by this paragraph.
15. This Trust Agreement may from time to time be modified or amended
by agreement executed by the Trustee, Parent, Merger Subsidiary and to the
registered holder(s) of the Trust Certificates (i) pursuant to an order of the
STB, (ii) with the prior approval of the STB, (iii) in order to comply with any
order of the STB, or (iv) upon receipt of an opinion of counsel satisfactory to
the Trustee and the registered holder(s) of Trust Certificates that an order of
the STB approving such modification or amendment is not required and that the
amendment is authorized under the Merger Agreement and is consistent with the
regulations of the STB regarding voting trusts.
16. The provisions of this Trust Agreement and the rights and
obligations of the parties hereunder shall be governed by the laws of the State
of Delaware, except that, to the extent any provision hereof may be found
inconsistent with the ICC Termination Act of 1995 or regulation promulgated
thereunder by the STB, such Act and regulations shall control and such provision
hereof shall be given effect only to the extent permitted by such Act and
regulations. In the event that the STB shall, at any time hereafter by final
order, find that compliance with law requires any other or different action by
the Trustee than is provided herein, the Trustee shall act in accordance with
such final order instead of the provisions of this Trust Agreement.
17. This Trust Agreement is executed in three counterparts, each of
which shall constitute an original, and one of which shall be retained by
Parent, one by Merger Subsidiary, and the other by the Trustee.
18. A copy of this Agreement and any amendments or modifications
thereto shall be filed with the STB by Parent.
19. This Trust Agreement shall be binding upon the successors and
assigns to the parties hereto, including without limitation successors to Parent
by merger, consolidation or otherwise.
20. For purposes of this Trust Agreement, the term "Surface
Transportation Board" or "STB", includes any successor agency or governmental
department that is authorized to carry out the responsibilities now carried out
by the STB with respect to voting trusts and control of common carriers.
21. (a) Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be mailed by U.S. mail, certified
mail, return receipt requested or by Federal Express, Express Mail, or similar
overnight delivery or courier service or delivered (in person or by telecopy)
against receipt to the party to whom it is to be given at the address of such
party set forth below (or to such other address as the party shall have given
notice of):
To the Trustee: The Bank of New York
Corporate Trust Administration
101 Barclay Street, 21W
New York, NY 10286
USA
Attention: W.T. Cunningham
Vice President
To Parent and (prior to the Merger)
Merger Subsidiary: Canadian National Railway Company
935 de la Gauchetiere Street West
16th Floor
Montreal, Quebec, Canada
H3B 2M9
Attention: Jean Pierre Ouellet
Chief Legal Officer
and Corporate Secretary
(b) Unless otherwise specifically provided herein, any notice
to or communication with the registered holder(s) of the Trust Certificates
hereunder shall be deemed to be sufficiently given or made if enclosed in
postpaid envelopes (regular not registered mail) addressed to such holders at
their respective addresses appearing on the Trustee's transfer books, and
deposited in any post office or post office box. The addresses of the holders of
Trust Certificates, as shown on the Trustee's transfer books, shall in all cases
be deemed to be the addresses of Trust Certificate holders for all purposes
under this Trust Agreement, without regard to what other or different addresses
the Trustee may have for any Trust Certificate holder on any other books or
records of the Trustee. Every notice so given of mailing shall be the date such
notice is deemed given for all purposes.
22. Each of the parties hereto acknowledges and agrees that in the
event of any breach of this Agreement, the non-breaching party would be
irreparably and immediately harmed and could not be made whole by monetary
damages. It is accordingly agreed that the parties hereto (a) will waive, in any
action for specific performance, the defense of adequacy of a remedy at law and
(b) shall be entitled, in addition to any other remedy to which they may be
entitled at law or in equity, to compel specific performance of this Agreement
in any action instituted in any state or federal court sitting in Wilmington,
Delaware. Each party hereto consents to personal jurisdiction in any such action
brought in any state or federal court sitting in Wilmington, Delaware.
IN WITNESS WHEREOF, Canadian National Railway Company and Blackhawk
Merger Sub, Inc. have caused this Trust Agreement to be executed by their
respective authorized officers, and their corporate seals to be affixed,
attested by their respective Corporate Secretaries or Assistant Corporate
Secretaries, and The Bank of New York has caused this Trust Agreement to be
executed by one of its duly authorized corporate officers and its corporate seal
to be affixed, attested to by its Corporate Secretary or one of its Assistant
Corporate Secretaries, all as of the day and year first above written.
Attest: Canadian National Railway Company
By /s/ Jean Pierre Ouellet
- ---------------------------- -------------------------------
Jean Pierre Ouellet
Chief Legal Officer and
Corporate Secretary
Attest: Blackhawk Merger Sub, Inc.
By /s/ Jean Pierre Ouellet
- ---------------------------- -------------------------------
Jean Pierre Ouellet
President & Director
Attest: The Bank of New York
By /s/ W.T. Cunningham
- ---------------------------- -------------------------------
W.T. Cunningham
Vice President
- 12 -
<PAGE>
ATTACHMENT A
TO VOTING TRUST AGREEMENT
No. Shares
VOTING TRUST CERTIFICATE
for
COMMON STOCK
$0.001 PER SHARE PAR VALUE
of
ILLINOIS CENTRAL CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS IS TO CERTIFY that will ___________ be entitled, on the surrender
of this Certificate, to receive on the termination of the Voting Trust Agreement
hereinafter referred to, or otherwise as provided in Paragraph 8 of said Voting
Trust Agreement, (i) a certificate or certificates, as the case may be, for
[______] shares of the Common Stock, $0.001 per share par value, of Illinois
Central Corporation, a Delaware corporation (the "Company"). This Certificate is
issued pursuant to, and the rights of the holder hereof are subject to and
limited by, the terms of a Voting Trust Agreement, dated as of March 13, 1998,
executed by Canadian National Railway Company, a Canadian corporation, Blackhawk
Merger Sub, Inc., a Delaware corporation ("Merger Subsidiary"and The Bank of New
York, as Voting Trustee, a copy of which Voting Trust Agreement is on file in
the registered office of Merger Subsidiary at [The Corporation Trust Co., 100
West Tenth Street, Wilmington, Delaware 19801], and open to inspection of any
stockholder of the Company and the holder hereof. The Voting Trust Agreement,
unless earlier terminated (or extended) pursuant to the terms thereof, will
terminate on March 13, 2003, so long as no violation of 49 U.S.C. Sections 11323
will result from such termination.
The holder of this Certificate shall be entitled to the benefits of
said Voting Trust Agreement, including the right to receive payment equal to the
cash dividends, if any, paid by the Company with respect to the number of shares
represented by this Certificate.
This Certificate shall be transferable only on the books of the
undersigned Voting Trustee or any successor, to be kept by it, on surrender
hereof by the registered holder in person or by attorney duly authorized in
accordance with the provisions of said Voting Trust Agreement, and until so
transferred, the Voting Trustee may treat the registered holder as the owner of
this Voting Trust Certificate for all purposes whatsoever, unaffected by any
notice to the contrary.
By accepting this Certificate, the holder hereof assents to all the
provisions of, and becomes a party to, said Voting Trust Agreement.
IN WITNESS WHEREOF, the Voting Trustee has caused this Certificate to
be signed by its officer duly authorized.
Dated:
By ___________________________
Authorized Officer
[FORM OF BACK OF VOTING TRUST CERTIFICATE]
FOR VALUE RECEIVED ____________________________________
hereby sells, assigns, and transfers unto _______________________
the within Voting Trust Certificate and all rights and interests represented
thereby, and does hereby irrevocably constitute and appoint
_________________________________ Attorney to transfer said Voting Trust
Certificate on the books of the within mentioned Voting Trust Certificate on the
books of the within mentioned Voting Trustee, with full power of substitution in
the premises.
-----------------------------
Dated:
In the Presence of:
- -----------------------------
CREDIT AGREEMENT
by and among
CANADIAN NATIONAL RAILWAY COMPANY
as Borrower
GRAND TRUNK CORPORATION,
GRAND TRUNK WESTERN RAILROAD INCORPORATED,
DULUTH, WINNIPEG AND PACIFIC RAILWAY COMPANY,
ST. CLAIR TUNNEL COMPANY and CANADIAN NATIONAL RAILWAY
PROPERTIES INC.
as Guarantors
THE FINANCIAL INSTITUTIONS NAMED
ON THE SIGNATURE PAGES HEREOF
as Lenders
GOLDMAN SACHS CREDIT PARTNERS L.P. and BANK OF MONTREAL
as Arrangers
GOLDMAN SACHS CREDIT PARTNERS L.P.
as Advisor and Syndication Agent
BANK OF MONTREAL
as Administrative Agent
THE BANK OF NOVA SCOTIA and NBD BANK
as Co-Documentation Agents
BANK OF MONTREAL
as Repayment Agent
---------------------------------
U.S. $1,080,000,000
---------------------------------
Dated as of March 16, 1998
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 INTERPRETATION......................................... 4
1.1 Definitions............................................ 4
1.2 Control................................................ 32
1.3 Computation of Time Periods............................ 32
1.4 Headings and Table of Contents......................... 32
1.5 References............................................. 32
1.6 Singular and Plural; Gender............................ 32
1.7 Generally Accepted Accounting Principles............... 33
1.8 Ratable - Portion of Accommodations.................... 33
1.9 Incorporation of Schedules............................. 33
ARTICLE 2 REPRESENTATIONS AND WARRANTIES......................... 33
2.1 Representations and Warranties......................... 33
2.2 Survival of Representations and Warranties............. 39
ARTICLE 3 THE CREDIT............................................. 40
3.1 Term Loan Commitment; Use of Proceeds.................. 40
3.2 Revolving Loan Commitment; Use of
Proceeds of Revolving Loans.......................... 40
3.3 Direct Advances........................................ 41
3.4 Bid Advances........................................... 42
3.5 Money Market Loans..................................... 46
3.6 Notice Provisions...................................... 48
3.7 Pro Rata Treatment..................................... 48
3.8 Accounts kept by the Administrative Agent.............. 49
3.9 Accounts kept by each Lender........................... 49
ARTICLE 4 REPAYMENT, CONVERSION AND REDUCTION.................... 49
4.1 Mandatory Repayment and Prepayment of
the Loan............................................. 49
4.2 Optional Repayments.................................... 50
4.3 Conversion Option...................................... 51
4.4 Requirements for Optional Repayments and
Optional Conversions................................. 52
4.5 Excess Advances........................................ 52
4.6 Authority to Debit..................................... 53
4.7 Reduction of the Commitments........................... 53
4.8 Increase of Revolving Loan Commitment.................. 54
ARTICLE 5 INTEREST AND FEES...................................... 55
5.1 Interest............................................... 55
5.2 Payment of Interest on Libor Loan...................... 55
5.3 Payment of Interest on Canadian Rate Loan.............. 55
5.4 Payment of Interest on Canadian Base
Rate Loan............................................ 56
5.5 Selection of Interest Periods.......................... 56
5.6 Default Interest....................................... 56
5.7 Determination of Interest Rates........................ 57
5.8 Acceptance Fee......................................... 57
5.9 Underwriting Fee....................................... 57
5.10 Facility Fee........................................... 57
5.11 Administrative Fee..................................... 58
5.12 Certain Computations................................... 58
ARTICLE 6 BANKERS' ACCEPTANCES................................... 58
6.1 Bankers' Acceptances................................... 58
6.2 Payments at Maturity................................... 59
6.3 BA Equivalent Advances................................. 60
6.4 Circumstances Making Bankers'
Acceptances Unavailable.............................. 60
6.5 Purchase of Bankers' Acceptances....................... 61
6.6 Pre-Signed Draft Forms................................. 61
ARTICLE 7 LETTERS OF CREDIT...................................... 62
7.1 Letter of Credit Commitment............................ 62
7.2 Letter of Credit Participations........................ 62
7.3 Repayment of Participants.............................. 63
7.4 Role of the Administrative Agent....................... 63
7.5 Lenders' Obligations Absolute.......................... 63
7.6 Reinstatement and Survival............................. 64
7.7 Procedure for Issuance and Renewal
of Letters of Credit................................. 64
7.8 Reimbursement of the Administrative Agent.............. 66
7.9 Commissions, Fees and Charges.......................... 66
7.10 Interest on Amounts Disbursed under
Letters of Credit.................................... 67
7.11 Computation of Interest and Fees; Payment
not on Business Day.................................. 67
7.12 Increased Costs........................................ 68
7.13 Further Assurances..................................... 69
7.14 Nature of Obligations; Indemnities..................... 69
7.15 Payments upon any Event of Default..................... 70
ARTICLE 8 CHANGE IN CIRCUMSTANCES................................ 71
8.1 Substitute Basis - Alternate Interest Rate............. 71
8.2 Increased Costs........................................ 71
8.3 Illegality............................................. 73
8.4 Indemnity.............................................. 73
8.5 Replacement of a Lender................................ 74
ARTICLE 9 PAYMENTS, TAXES, EXPENSES AND INDEMNITY................ 74
9.1 Payments by Borrower to Administrative Agent........... 74
ii
<PAGE>
9.2 Payments by Lenders to Administrative Agent............ 75
9.3 Payments by Administrative Agent to Borrower........... 75
9.4 Distribution to Lenders and Application of
Payments............................................. 75
9.5 Currency Payment....................................... 75
9.6 Set-off................................................ 76
9.7 Taxes.................................................. 76
9.8 Application of Payments................................ 77
9.9 Expenses and Indemnity................................. 77
9.10 Non-Receipt by Administrative Agent.................... 79
9.11 Indemnity by the Borrower.............................. 79
9.12 Survival of Indemnification Obligations................ 80
ARTICLE 10 CONDITIONS OF LENDING.................................. 80
10.1 Conditions Precedent to the Closing.................... 80
10.2 Conditions Precedent to the Term Loans and other
Advances on Initial Funding Date..................... 82
10.3 Conditions Precedent to each Advance................... 86
10.4 Waiver................................................. 87
ARTICLE 11 COVENANTS.............................................. 88
11.1 Affirmative Covenants.................................. 88
11.2 Financial Covenants.................................... 93
11.3 Merger and Voting Trust Covenants...................... 94
11.4 Negative Covenants..................................... 95
ARTICLE 12 DEFAULT................................................ 98
12.1 Events of Default...................................... 98
12.2 Effect of a Default....................................101
12.3 Remedies Cumulative; No Waiver.........................102
12.4 Set-Off................................................102
ARTICLE 13 NOTICE.................................................102
13.1 Notices, Etc...........................................102
ARTICLE 14 GOVERNING LAW: JURISDICTION; JUDGMENT CURRENCY.........103
14.1 Governing Law..........................................103
14.2 Jurisdiction...........................................103
14.3 Judgment Currency......................................104
ARTICLE 15 THE AGENTS AND THE LENDERS.............................105
15.1 Authorization of Agent.................................105
15.2 Agents' Responsibility.................................106
15.3 Rights of Agents as Lenders............................106
15.4 Indemnity..............................................107
15.5 Notice by Administrative Agent to Lenders..............107
15.6 Protection of Agents...................................107
15.7 Notice by Lenders to Administrative Agent..............108
15.8 Resignation of Administrative Agent....................108
15.9 Sharing Among the Lenders..............................109
15.10 Intercreditor Agreement................................110
15.11 Provisions for the Benefit of Lenders Only.............110
15.12 Amendment of Article 15................................110
15.13 Authorized Waivers, Variations and Omissions...........110
15.14 Dissenting Lenders.....................................111
ARTICLE 16 SUCCESSORS AND ASSIGNS.................................112
16.1 Successors and Assigns.................................112
ARTICLE 17 GUARANTEE..............................................115
17.1 Guarantee..............................................115
17.2 Guarantee Absolute.....................................116
17.3 Waiver.................................................117
17.4 Continuing Guarantee...................................117
17.5 Fraudulent Conveyance Limitation.......................118
17.6 Taxes..................................................119
ARTICLE 18 MISCELLANEOUS..........................................120
18.1 Severability...........................................120
18.2 Amendments, Waivers, Etc...............................121
18.3 Direct Obligation......................................121
18.4 Sharing of Information.................................121
18.5 Term of Agreement......................................121
18.6 Further Assurances.....................................122
18.7 Execution in Counterparts..............................122
18.8 Language...............................................122
18.9 Whole Agreement........................................122
<PAGE>
SCHEDULES
1.1A COMMITMENTS AND APPLICABLE LENDING OFFICES
1.1B FORM OF NOTICE OF BORROWING
1.1C FORM OF NOTICE OF CONVERSION
1.1D FORM OF NOTICE OF OPTIONAL REPAYMENT
2.1.5 MATERIAL LITIGATION
2.1.10 TITLE DEFECTS
2.1.13 CERTAIN PERMITS, LICENSES AND APPROVALS
2.1.14 PENSION PLANS
2.1.19 CERTAIN MATTERS
2.1.21 CANADIAN PENSION PLAN FUNDING DEFICIENCIES
2.1.22 U.S. UNDERFUNDED ERISA PLANS
3.4.1 FORM OF NOTICE OF BID BORROWINGS
4.6 ACCOUNTS OF BORROWER
6.6 FORM OF POWER OF ATTORNEY
10.1.1 OPINIONS OF COUNSEL
10.1.2 CAPITAL STRUCTURE
11.1.12 FORM OF JOINDER AGREEMENT
11.1.16 FORM OF BORROWER JOINDER AGREEMENT
16.1.7 FORM OF ASSIGNMENT AGREEMENT
16.1.9 FORM OF CONFIDENTIALITY AGREEMENT
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT IS DATED AS OF MARCH 16, 1998 AND ENTERED INTO
BY AND AMONG: CANADIAN NATIONAL RAILWAY COMPANY, a corporation continued and
existing under the Canada Business Corporations Act
(together with any other Person that may become a Borrower, here-
inafter called the "Borrower")
AND: GRAND TRUNK CORPORATION, a corporation incorporated and existing
under the Delaware General Corporation Law (hereinafter called
"Grand Trunk");
AND: GRAND TRUNK WESTERN RAILROAD INCORPORATED, a corporation
incorporated and existing under the Delaware General Corporation
Law
(hereinafter called "Western")
AND: DULUTH, WINNIPEG AND PACIFIC RAILWAY COMPANY, a corporation
incorporated and existing under the Minnesota Business
Corporation Act
(hereinafter called "Duluth")
AND: ST. CLAIR TUNNEL COMPANY, a corporation incorporated
and existing under the Michigan Railroad Code of 1993
(hereinafter called "St-Clair")
AND: CANADIAN NATIONAL RAILWAY PROPERTIES INC., a corpora-
tion incorporated and existing under the Canada Business
Corporations Act
(hereinafter called "CNR Properties")
(Grand Trunk, Western, Duluth, St-Clair and CNR Properties,
together with any other Person that may become a Guarantor, are
hereinafter collectively called the "Guarantors")
AND: THE FINANCIAL INSTITUTIONS NAMED ON THE SIGNATURE
PAGES HEREOF
<PAGE>
(hereinafter called individually a "Lender" and collectively the
"Lenders")
AND: BANK OF MONTREAL
(hereinafter called the "Administrative Agent")
AND: GOLDMAN SACHS CREDIT PARTNERS L.P. and BANK OF MONTREAL
(hereinafter called individually an "Arranger" and collectively
the "Arrangers")
AND: THE BANK OF NOVA SCOTIA and NBD BANK
(hereinafter called individually a "Co-Documentation Agent" and
collectively the "Co-Documentation Agents")
AND: GOLDMAN SACHS CREDIT PARTNERS L.P.
(hereinafter called the "Advisor" and the "Syndication Agent")
AND: BANK OF MONTREAL
(hereinafter called the "Repayment Agent")
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<PAGE>
PRELIMINARY STATEMENTS:
A. The Borrower has caused the formation of, and indirectly
owns all of the outstanding shares of capital stock of, Merger Sub (this and
other capitalized terms used in these Preliminary Statements without definition
being used as defined in Section 1.1) for the purpose of acquiring not less than
50.1% (on a fully diluted basis) of the outstanding shares of common stock, par
value US$0.001 per share, of Illinois Central Corporation, a Delaware
corporation (together with its successors, including without limitation, the
survivor to the Merger, "Target") (such common stock being the "Target Common
Stock").
B. Merger Sub has offered to purchase not less than 50.1% (on
a fully diluted basis) and not more than 46,051,761 of the issued and
outstanding shares of Target Common Stock at a price equal to US$39.00 per share
pursuant to the Tender Offer.
C. Simultaneously with the purchase of the Target Common
Stock, such Target Common Stock purchased by Merger Sub will be deposited into
the Voting Trust established pursuant to the Voting Trust Agreement.
D. The Borrower, Merger Sub and Target have entered into the
Merger Agreement pursuant to which, upon completion of the Tender Offer and,
with respect to clauses (1), (2) and (3) below, upon receipt of the approval by
holders of at least 50.1% of the outstanding shares of Target Common Stock (if
required by law):
(1) Merger Sub will merge with Target pursuant to the
Merger Agreement with Target being the surviving corporation in such
merger (such surviving corporation is sometimes referred to herein as
the "Surviving Corporation");
(2) If Merger Sub has purchased 46,051,761 shares of
Target Common Stock, each of the shares of Target Common Stock
outstanding immediately before the consummation of the Merger (other
than shares to be cancelled as described in clause (4) below and shares
held by those who perfect appraisal rights, if any, under state law)
will be converted into the right to receive a number of common shares,
without par value, of the Borrower (the "Borrower Common Stock")
determined in accordance with the Merger Agreement;
(3) If Merger Sub has purchased less than 46,051,761
shares of Target Common Stock, each of the shares of Target Common
Stock outstanding immediately before the consummation of the Merger
(other than shares to be cancelled as described in clause (4) below and
shares held by those who perfect appraisal rights, if any, under state
law) will be converted into the right to receive (x) a number of shares
of Borrower Common Stock determined in accordance with the Merger
Agreement and (y) a cash payment in an amount determined in accordance
with the Merger Agreement;
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<PAGE>
(4) Each of the shares of Target Common Stock
outstanding immediately before the consummation of the Merger held by
Merger Sub, Target or any of their respective direct or indirect
Subsidiaries (including shares held in the Voting Trust) (the "Other
Target Shares") shall be cancelled and retired without payment of any
consideration therefor;
(5) As a result of the Merger, each of the shares of
the capital stock of Merger Sub outstanding immediately before the
consummation of the Merger will be converted into and become one fully
paid and nonassessable share of common stock of Surviving Corporation
(the "Surviving Corporation Common Stock"); and
(6) Following the Merger, all of the outstanding
shares of Surviving Corporation Common Stock shall be deposited into
and subject to the provisions of the Voting Trust unless and until the
STB approves the acquisition of control of Target by the Borrower.
E. The Borrower desires that Lenders extend certain credit
facilities to the Borrower to provide (together with cash on hand of the
Borrower and the proceeds of borrowings on the Initial Funding Date under the US
Credit Agreement) for (i) the payment by Merger Sub of the cash consideration
for the Tendered Target Shares in an aggregate amount not exceeding
US$1,796,018,679.00; (ii) the refinancing of certain Indebtedness of the
Borrower and its Subsidiaries; (iii) the payment of Transaction Costs; (iv) the
working capital requirements and general corporate purposes of the Borrower and
its Subsidiaries, including, without limitation, commercial paper backstop; (v)
the issuance of Standby Letters of Credit and Commercial Letters of Credit as
described herein; and (vi) the other purposes described herein.
F. The Guarantors have agreed to guarantee the Obligations
hereunder.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the Borrower, Guarantors,
Lenders, and Agents hereby agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement unless something in the subject-matter or the context
otherwise is inconsistent therewith:
"Acceptance" - means Bankers' Acceptances pursuant to Section 6.1 and
BA Equivalent Advances pursuant to Section 6.3.
4
<PAGE>
"Acceptance Fee" - means the fee payable at the time of the acceptance
of Bankers' Acceptances established by multiplying the face amount of such
Bankers' Acceptances by the Applicable Margin and by multiplying the product so
obtained by a fraction having a numerator equal to the number of days in the
term of such Bankers' Acceptances and a denominator of 365.
"Acquisition" - means a take-over bid or offer to acquire all or
substantially all of the outstanding voting or equity securities of a
corporation or an acquisition of all or substantially all of the assets of any
Person.
"Administrative Agent" - means Bank of Montreal or the administrative
agent in office at such time pursuant to Article 15.
"Advance" - means (i) a direct advance by a Lender to the Borrower by
way of Canadian Rate Advances, Canadian Base Rate Advances and Libor Advances
pursuant to Section 3.3, (ii) Canadian Rate Advances pursuant to Section 7.8.1,
(iii) the face amount of Bankers' Acceptances pursuant to Section 6.1 and BA
Equivalent Advances pursuant to Section 6.3 and (iv) the amount of the Letter of
Credit Exposure.
"Affiliate" - has the meaning ascribed thereto in the Canada Business
Corporations Act, as the same may be amended, replaced or supplemented from time
to time.
"Agreement" - means this agreement as it may be amended, supplemented
or restated from time to time.
"Agents" - means Administrative Agent, Arrangers, Advisor, Syndication
Agent, the Co- Documentation Agents and Repayment Agent.
"Applicable Lending Office" - means, with respect to any Lender, the
office of such Lender in Canada specified under the heading "Address" opposite
its name on Schedule 1.1A annexed hereto, or such other office of such Lender in
Canada as such Lender may from time to time specify to the Borrower (with a copy
to the Administrative Agent), and means, with respect to any assignee of all or
any part of, or any interest in, any Lender's rights and obligations hereunder,
the office of such assignee located at its address selected in Canada and
specified as its "Applicable Lending Office" to the Borrower (with a copy to the
Administrative Agent) from time to time by such assignee.
"Applicable Margin" - means, for each day during which an Acceptance or
a Libor Loan or a Letter of Credit is outstanding, the rate of interest per
annum (expressed in basis points, i.e., 1/100 of 1%) set forth in Column B below
opposite the category in Column A below which describes the Applicable Public
Debt Rating in effect on such day:
5
<PAGE>
Column A Column B
-------- --------
Level 1 19.5
Level 2 25
Level 3 27.5
Level 4 30
Level 5 47.5
Level 6 67.5
provided that (i) if the Applicable Public Debt Rating is comprised of two
"Levels" (x) if there is no more than one Level difference between such Levels,
then the Applicable Margin shall be the amount in Column B above corresponding
to the Level in Column A above which is the higher of such Levels and (y) if
there is more than one Level difference between such Levels, then the Applicable
Margin shall be the arithmetic average of (a) the amount in Column B above
corresponding to the Level in Column A above which corresponds to the S&P Public
Debt Rating and (b) the amount in Column B above corresponding to the Level in
Column A above which corresponds to the Moody's Public Debt Rating, and (ii) for
each day during which the sum of the aggregate principal amounts of the Loan,
the Bid Loans, the US Term Loan, the US Revolving Loans and all other advances
under the US Credit Agreement (including Bid Loans, but not including Money
Market Loans, as such terms are defined therein) exceeds US$900,000,000, each of
the Applicable Margins shall be increased by 5 basis points.
"Applicable Public Debt Rating" - means, as of any day, Level 1, Level
2, Level 3, Level 4, Level 5 or Level 6 below, whichever is applicable on such
day to (a) if the Public Debt Rating on such day by S&P and Moody's is in the
same "Level" below, that Level or (b) if such Public Debt Ratings are not in the
same "Level", the Level which corresponds to the S&P Public Debt Rating and the
Level which corresponds to the Moody's Public Debt Rating:
Level S&P Moody's
----- --- -------
1 A- or higher A3 or higher
2 BBB+ Baal
3 BBB Baa2
4 BBB- Baa3
5 BB+ Ba1
6 Less than BB+ Less than Ba1
or Unrated or Unrated
; provided that, notwithstanding anything to the contrary contained herein, any
change in the Applicable Public Debt Rating which results from a change in the
Public Debt Rating shall become effective on the day upon which such change in
the Public Debt Rating is publicly announced by the relevant rating agency (or
the date upon which the relevant rating agency ceases to provide a rating) and
shall be effective only with respect to amounts accruing after such date.
6
<PAGE>
"Arrangers" - is defined in the introductory paragraph.
"Arrangers' Counsel" - means O'Melveny & Myers LLP and Ogilvy Renault.
"Asset Sale" means the sale by the Borrower or any of its Subsidiaries
or by Target or any of its Subsidiaries to any Person other than the Borrower or
any of its wholly-owned Subsidiaries or Target or any of its Subsidiaries of (i)
any of the stock of Target or any of Target's Subsidiaries or (ii) any assets
(whether tangible or intangible) of Target or any of its Subsidiaries (other
than asset sales or network rationalizations in the ordinary course of
business).
"Assignee" - has the meaning specified in Section 16.1.3.
"Available Revolving Loan Commitment" - means at any time (i) with
respect to all Lenders, the aggregate amount of the Revolving Loan Commitments
of all Lenders at such time less the Total Utilization of Revolving Loan
Commitments at such time and (ii) with respect to a Lender, the amount of the
Available Revolving Loan Commitment of all Lenders at such time multiplied by
the Participation of such Lender.
"Available Term Loan Commitment" - means at any time (i) with respect
to all Lenders, the aggregate amount of the Term Loan Commitments of all Lenders
at such time less the aggregate amount of Advances made to the Borrower pursuant
to the Term Loan Commitments at such time, and (ii) with respect to any Lender,
the amount of the Available Term Loan Commitment of all Lenders at such time
multiplied by the Participation of such Lender.
"BA Equivalent Advance" - means an Advance contemplated as such in
Section 6.3.
"Bankers' Acceptance" - means a non-interest bearing bill of exchange
in a form satisfactory to the Administrative Agent, denominated in CDollars,
drawn and endorsed by the Borrower and presented to each Lender for acceptance
pursuant to this Agreement.
"Benefit Arrangement" - means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA that is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by the
Borrower or any ERISA Affiliate of the Borrower.
"Bid Advance" - means an advance by a Lender to the Borrower as part of
a Bid Borrowing resulting from the auction bidding procedure described in
Section 3.4.
"Bid Borrowing" - means a borrowing consisting of simultaneous Bid
Advances from each of the Lenders whose offers to make one or more Bid Advances
as part of such borrowing has been accepted by the Borrower under the auction
bidding procedure described in Section 3.4.
"Bid Loan" - means an advance by a Lender to the Borrower pursuant to
Section 3.4.
7
<PAGE>
"Borrower" - is defined in the introductory paragraph; provided,
however, that Borrower may include one or more Canadian Subsidiaries of Canadian
National Railway Company that from time to time shall become parties hereto as
borrowers by executing instruments reasonably satisfactory to Arrangers assuming
the obligations of a Borrower under this Agreement in accordance with Section
11.1.16.
"Borrowing" - means a utilization by the Borrower of the Credit by way
of Advances from the Lenders.
"Business Day" - means a day on which banking institutions in Montreal,
Quebec, Toronto, Canada and New York, New York are open for business and which
is also a day on which dealings in USDollars may be carried on by and between
banks in the London interbank market.
"Canadian Base Rate" - means the fluctuating annual rate of interest
which shall at all times be equal to the higher of (a) the arithmetic average of
the annual rate of interest announced or established by each of the Reference
Lenders from time to time as being the reference rate then in effect at its
respective principal lending offices in Canada for determining rates of interest
on US Dollar commercial loans to Canadian residents in Canada, subject, however,
to the provisions of Section 5.7.1 and (b) the Federal Funds Effective Rate
(which the parties acknowledge is an annualized rate based on a year of 360
days) plus 1/2 of 1% per annum.
"Canadian Base Rate Advance" - means an Advance in USDollars to which
the Canadian Base Rate is applicable.
"Canadian Base Rate Loans" - means at any given time during the term of
this Agreement the Loan, or that portion of the Loan, which the Borrower has
elected or is deemed to have elected to denominate in USDollars and upon which
interest is payable at the Canadian Base Rate.
"Canadian Plan" - means each employee benefit plan (other than a
pension plan) which the Borrower or any one of its Material Subsidiaries
maintains or to which it is obligated to contribute and which is subject to any
Canadian federal Law or provincial Law relating to employee benefit plans (other
than pension plans).
"Canadian Rate" - means, at any time, the rate of interest per annum
equal to the greater of (i) the per annum rate of interest quoted, published and
commonly known as the "prime rate" of the Administrative Agent which the
Administrative Agent establishes in Canada as the reference rate of interest in
order to determine interest rates for loans in Canadian dollars to its Canadian
commercial borrowers; and (ii) the rate per annum determined by the
Administrative Agent for one month bankers' acceptances as appears on the
Reuters Screen CDOR (Canadian Deposit Offered Rate) page, plus 3/4 of 1% per
annum, the whole as determined as at 10:00 a.m. (Montreal time), on the relevant
Business Day (provided that, for non-Business Days, and if no CDOR rate is
available for a given Business Day, the CDOR rate for the immediately
8
<PAGE>
previous Business Day for which a CDOR rate is available shall be used); in each
case adjusted automatically with each quoted or published change in such rate,
all without the necessity of any notice to the Borrower or any other Person.
"Canadian Rate Advance" - means an Advance in CDollars to which the
Canadian Rate is applicable.
"Canadian Rate Loan" - means at any given time during the term of this
Agreement the Loan, or that portion of the Loan, which the Borrower has elected
or is deemed to have elected to denominate in CDollars and upon which interest
is payable at the Canadian Rate.
"Capital Lease Obligations" - shall mean, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) immovable or real property or
movable or personal property, which obligations are required to be classified
and accounted for as a capital lease on a balance sheet of such Person under
generally accepted accounting principles and, for purposes of this Agreement,
the amount of such obligations shall be the capitalized amount thereof,
determined in accordance with generally accepted accounting principles.
"CBRS" - means Canadian Bond Rating Service or its successor.
"CDollars" and the symbol: "C$" each means lawful money of Canada.
"Closing Date" means the date on or prior to March 31, 1998 on which
all of the conditions set forth in Section 10.1 are satisfied or waived as
permitted hereunder. The parties hereto expect the Closing Date to occur on
March 13, 1998.
"Code" - means the United States Internal Revenue Code of 1986, as
amended from time to time. References to sections of the Code as presently in
effect include corresponding provisions of the Code after the date hereof.
"Commercial Letter of Credit Application" - has the meaning ascribed to
it in Section 7.7.1.
"Commercial Letters of Credit" - means a commercial letter of credit or
bank letter of guarantee, in either case in a face amount of not less than
C$500,000 or US$500,000, having an expiry date not later than the Revolving Loan
Commitment Termination Date, issued by the Administrative Agent in accordance
with Sections 7.1 and 7.7 for the account of the Borrower for the purchase of
goods in the ordinary course of business, in which the Lenders participate
pursuant to Section 7.2.
"Commitments" - in relation to a Lender means at any time such Lender's
Term Loan Commitment and Revolving Loan Commitment at such time.
9
<PAGE>
"Confidential Information Memorandum" - means that certain Confidential
Information Memorandum prepared by the Agents relating to the Term Loans and
Revolving Loans dated February 1998.
"Consolidated Subsidiaries" - means all Subsidiaries of the Borrower
and all Excluded Subsidiaries.
"Contaminant" - means, any pollutants, dangerous substances, liquid
waste, industrial waste, hauled liquid waste, toxic substances, hazardous
wastes, hazardous materials, hazardous substances or contaminants as defined or
dealt with in any Environmental Law.
"Conversion Advance" and "Converted Advance" shall each have the
meaning ascribed to such terms in Section 4.3.
"Conversion Date" - means a day which the Borrower has notified the
Administrative Agent in a Notice of Conversion as the date on which the Borrower
will convert Borrowings under the Credit, or a portion thereof, in accordance
with Section 4.3.
"Credit" - means the credit facility in the amount of one billion
eighty million USDollars (US$1,080,000,000) or the Equivalent Amount thereof in
CDollars which the Lenders will make available to the Borrower pursuant to, and
in accordance with the terms of, this Agreement for the purposes permitted
hereunder.
"Crown" - means the government of Canada and the government of any
province thereof.
"DBRS" - means Dominion Bond Rating Service or its successor.
"Deficient Canadian Plans" - means any Canadian Plan of the Borrower or
any one of its Material Subsidiaries as to which the actuarial present value of
all benefit liabilities under such Canadian Plan exceed the value of the assets
held in such Canadian Plan which are allocable to such benefits.
"Depositary" - means Harris Trust Company of New York.
"Discount Rate" - means with respect to Bankers' Acceptances issued
pursuant to this Agreement with the same maturity date, (i) with respect to any
Lender that is listed in Schedule I to the Bank Act (Canada), the average
bankers' acceptance rate as quoted on the Reuters Screen CDOR (Canadian Deposit
Offered Rate) page (or such other page as may, from time to time, replace such
page on that service for the purpose of displaying quotations for bankers'
acceptances accepted by leading Canadian financial institutions) at or about
10:00 a.m. (Montreal time) on the date of issue of such Bankers' Acceptances,
for bankers' acceptances having a comparable maturity to the maturity date of
such Bankers' Acceptances, or, if such rate is not available at or about such
time, the bankers' acceptance rate of the Administrative Agent established in
accordance with its normal practices for bankers' acceptances having a
comparable
10
<PAGE>
face value and maturity date to the face value and maturity date of such
Bankers' Acceptances (the rate determined in accordance with this clause (i)
being the "CDOR Rate"); and (ii) with respect to any Lender that is listed in
Schedule II to the Bank Act (Canada), the lesser of (a) the rate determined by
the Administrative Agent as being the arithmetic average (rounded upwards, if
necessary, to the nearest .01%) of the bankers' acceptance rates of each of the
Reference Lenders which is a Lender listed in Schedule II to the Bank Act
(Canada), established in accordance with their respective normal practices at or
about 10:00 a.m. (Montreal time) on the date of issue of such Bankers'
Acceptances, for bankers' acceptances having a comparable face value and
maturity date to the face value and maturity date of each such Reference
Lender's Participation in such issue of Bankers' Acceptances, subject to the
provisions of Section 5.7.1, and (b) the CDOR Rate plus 7.5 basis points.
"Discounted Proceeds" - means, in respect of any Bankers' Acceptance to
be accepted and purchased by a Lender hereunder on any day, an amount (rounded
to the nearest whole cent, and with one-half of one cent being rounded up)
calculated on such day by multiplying (i) the face amount of such Bankers'
Acceptance by (ii) the price, where the price is determined by dividing one by
the sum of one plus the product of (A) the Discount Rate (expressed as a
decimal) and (B) a fraction, the numerator of which is the number of days in the
term of such Bankers' Acceptance and the denominator of which is 365.
"Drawdown Date" - means a day which the Borrower has notified the
Administrative Agent in a Notice of Borrowing as the date on which the Borrower
requests an Advance in accordance with Section 3.3 or, as applicable, the day on
which the Borrower has requested the issuance of a Letter of Credit in
accordance with Section 7.7.
"Effective Time" means the date and time that the Merger becomes
effective in accordance with the terms of the Merger Agreement, with the effect
set forth in Section 259 of the General Corporation Law of the State of
Delaware.
"Environmental Activity" - means any activity, event or circumstances
in respect of a Contaminant, including, without limitation, its storage, use,
holding, collection, purchase, accumulation, assessment, generation,
manufacture, construction, processing, treatment, stabilization, disposition,
handling or transportation, or its Release, escape, leaching, dispersal or
migration into the natural environment, including the movement through or in the
air, land surface or subsurface strata, surface water or groundwater.
"Environmental Law" - means any and all applicable Laws relating to
pollution or protection of human health or the environment or any Environmental
Activity.
"Equivalent Amount" - means, on any date, the amount in CDollars or
USDollars, as the case may be, which would be obtained on the conversion of an
amount in USDollars into CDollars or CDollars into USDollars, respectively, at
the Bank of Canada's noon mid-point spot rate for the purchase of USDollars with
CDollars or CDollars with USDollars, respectively, as quoted or published or
otherwise made available by the Bank of Canada on such date.
11
<PAGE>
"ERISA" - means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules issued and regulations promulgated
thereunder. References to sections or parts of ERISA as presently in effect
include corresponding provisions of ERISA after the date hereof.
"ERISA Affiliate" - shall mean, with respect to any Person, any other
Person which, together with any such Person, would be treated as a single
employer under Section 414 of the Code; provided, however, that Target and its
Subsidiaries shall not be ERISA Affiliates of the Borrower or its Subsidiaries
prior to the STB Approval Date; and provided further, however, that Target and
its Subsidiaries shall not be ERISA Affiliates of the Borrower or its
Subsidiaries for purposes of determining compliance with Article 2 hereof until
90 days after such date.
"Event of Default" - means any of the events specified in Section 12.1.
"Excess Canadian Pension Obligations" - means, at any time, the sum of
(a) the amount by which the actuarial present value of all pension liabilities
of a Canadian pension plan of the Borrower and its Material Subsidiaries exceed
the aggregate value of the assets held in such pension plan which are allocable
to such liabilities, plus (b) the aggregate amount of the obligations of the
Borrower and its Material Subsidiaries in respect of obligations to terminated
Canadian pension plans which are secured by Liens on the assets of the Borrower
or its Material Subsidiaries.
"Excluded Subsidiaries" - means Canaprev Inc., Domestic Four Leasing
Corporation, CV Properties Incorporated, Autoport Limited, The Canada and Gulf
Terminal Railway Company, Ecorail Inc., Ecorail Enterprises Inc., Canac Inc. and
all Subsidiaries of Canac Inc., Canadian National Transportation Limited, CN
Transactions Inc., The Quebec and Lake St. John Railway Company, The Northern
Consolidated Holding Company Limited, The Canadian Northern Quebec Railway
Company and The Great North Western Telegraph Company of Canada, but in each
case, only for so long as each such company is a company controlled, directly or
indirectly, by the Borrower.
"Existing Credit Agreements" - means (i) the Amended and Restated
Credit Agreement dated July 31, 1997, by and among the Borrower, as borrower,
Grand Trunk, Western, Duluth and St-Clair, as guarantors, and the financial
institutions named on the signature pages thereof, as lenders, pursuant to which
the said borrower is granted a revolving credit facility of C$275,000,000, and
(ii) the Amended and Restated Credit Agreement dated July 31, 1997, by and among
Grand Trunk, Western, Duluth and St-Clair, as borrowers, Borrower, as guarantor,
and the financial institutions named on the signature pages thereof, as lenders,
pursuant to which the said borrowers are granted a revolving credit facility of
US$137,500,000.
"Facility Fee" - means, for each day, the rate per annum (expressed in
basis points, i.e. 1/100 of 1%) set forth in Column B below opposite the
category in Column A below which describes the Applicable Public Debt Rating in
effect on such day:
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Column A Column B
-------- --------
Level 1 8
Level 2 10
Level 3 12.5
Level 4 15
Level 5 20
Level 6 25
; provided that if the Applicable Public Debt Rating is comprised of two
"Levels" (x) if there is no more than one Level difference between such Levels,
then the Facility Fee shall be the amount in Column B above corresponding to the
Level in Column A above which is the higher of such Levels and (y) if there is
more than one Level difference between such Levels, then the Facility Fee shall
be the arithmetic average of (a) the amount in Column B above corresponding to
the Level in Column A above which corresponds to the S&P Public Debt Rating and
(b) the amount in Column B above corresponding to the Level in Column A above
which corresponds to the Moody's Public Debt Rating.
"Federal Funds Effective Rate" - means, for any day, an interest rate
per annum (rounding up, if necessary, to the nearest 1/16 of 1%) equal to the
weighted average of the rates on overnight Federal Funds transactions with
members of the Federal Reserve System of the United States of America arranged
by federal funds brokers, as published for such day by the Federal Reserve Bank
of New York or, if such rate is not published for any day which is a Business
Day, the average of the quotations for such day on such transactions received by
the Administrative Agent from three (3) federal funds brokers of recognized
standing selected by it; in the case of a day which is not a Business Day, the
Federal Funds Effective Rate for such day shall be the Federal Funds Effective
Rate for the immediately preceding Business Day.
"Financial Projections" - has the meaning assigned to that term in
Section 10.1.7(iv).
"Fixed Assets" - means, as at any time, the aggregate net book value of
the long-term fixed assets, including but without limitation, tracks and
roadways, buildings and rolling stock, of the Borrower and its Consolidated
Subsidiaries.
"Fixed Charge Coverage Ratio" - means, with respect to the Borrower,
the ratio, calculated on a consolidated basis, of (A) the aggregate of (i) Net
Profits, (ii) all items properly classified as net interest expense (whether
expensed or capitalized) on the Borrower's financial statements in accordance
with generally accepted accounting principles, (iii) the computed net interest
component for any element of Indebtedness of the Borrower and its Consolidated
Subsidiaries (such as capital leases) which would not be classified as interest
expense pursuant to (ii), (iv) the aggregate of all taxes (including deferred
taxes) based on income of the Borrower and its Consolidated Subsidiaries
determined in accordance with generally accepted accounting principles, and (v)
operating lease commitments and receivable securitization costs of the Borrower
and its Consolidated Subsidiaries to (B) the aggregate of (i) all items properly
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classified as interest expense (whether expensed or capitalized) on the
Borrower's financial statements in accordance with generally accepted accounting
principles, (ii) the computed net interest component for any element of
Indebtedness of the Borrower and its Consolidated Subsidiaries (such as capital
leases) which would not be classified as interest expense pursuant to (i), and
(iii) operating lease commitments and receivable securitization costs of the
Borrower and its Consolidated Subsidiaries. For the purposes of this Agreement,
the Fixed Charge Coverage Ratio (and related definitions) (x) for the last day
of any fiscal quarter ended on or prior to September 30, 1999 shall be
calculated for the period from and including April 1, 1998 to and including such
last day and (y) for the last day of any fiscal quarter ended after September
30, 1999 shall be calculated for the period of six consecutive fiscal quarters
ended on such last day.
"Fixed Rate Advance" - means a Bid Advance which bears interest at a
fixed rate per annum determined as provided in, and in response to, a Notice of
Bid Borrowing delivered pursuant to Section 3.4.1(i).
"Governmental Authority" - means any country or government, any
province, state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantees" - means, with respect to any Person, any Indebtedness of
another Person which such guaranteeing Person has guaranteed or in respect of
which such guaranteeing Person is liable, contingently or otherwise, including,
without limitation, liable by way of agreement to purchase property or services,
to provide funds for payment, to supply funds to or otherwise invest in such
other Person, or otherwise to assure a creditor of such other Person against
loss, other than endorsements for collection or deposit in the ordinary course
of business; provided that, in the case of the Borrower, the term Guarantee
shall not include any obligations, undertakings or indemnities in respect of
surety bonds and other similar contracts issued on behalf of, or entered into
by, any of its Subsidiaries including AMF Technotransport Management Inc. prior
to the time it ceased to be a Subsidiary in the ordinary course of their
business. The amount of any Guarantee shall be deemed to be the higher of (i) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee is made and (ii) the maximum amount for which
such guaranteeing Person may be liable pursuant to the terms of the instrument
embodying such Guarantee, unless such primary obligation and the maximum amount
for which such guaranteeing Person may be liable are not stated or determinable,
in which case the amount of such Guarantee shall be such guaranteeing Person's
maximum reasonably anticipated liability in respect thereof as determined by the
Majority Lenders, in good faith.
"Guarantors" - means, on any date, (i) each of Grand Trunk, Western,
Duluth, St-Clair and CNR Properties, (ii) any Material Subsidiary that, on or
prior to such date, becomes a guarantor pursuant to Section 11.1.12 and (iii) in
the event any Person other than Canadian National Railway Company becomes a
borrower under this Agreement, Canadian National Railway Company pursuant to
Section 11.1.16.
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"Hostile Acquisition" - means an Acquisition by the Borrower or any of
its Subsidiaries in respect of which the board of directors of the target
company or management of the target Person (if the target is not a company) has
not recommended acceptance of such Acquisition.
"Indebtedness" - means, without duplication, for any Person:
(a) obligations for borrowed money, including obligations evidenced by
bonds, notes, debentures or other similar instruments;
(b) obligations under financial guarantees, letters of credit or
letters of guarantee or obligations to financial institutions who
issued such letters of credit or letters of guarantee for the account
of such Person;
(c) obligations under banker's acceptances;
(d) obligations representing the deferred purchase price of property or
services except trade accounts payable of such Person arising in the
ordinary course of business;
(e) obligations, whether or not assumed, secured by Liens on, or
payable out of the proceeds or production from, property owned by such
Person;
(f) Capital Lease Obligations;
(b) Guarantees; and
(h) obligations under interest rate protection agreements, currency
hedging agreements and commodity hedging agreements;
; provided that any borrowings made by the Borrower and CNR Properties in
connection with the Reorganization and any borrowings (other than Advances) by
the Borrower and Grand Trunk in connection with the acquisition of Target Common
Stock pursuant to the Tender Offer and the Merger shall not constitute
Indebtedness so long as such borrowings are repaid in full on the Business Day
on which they have been made.
"Initial Funding Date" - means the date on or prior to March 31, 1998
on which all of the conditions set forth in Section 10.2 are satisfied or waived
as permitted hereunder. The parties hereto expect the Initial Funding Date to
occur on March 18, 1998.
"Intercreditor Agreement" - means that certain Intercreditor Agreement
dated as of the date hereof by and among the Administrative Agent, as
representative of the Lenders, the administrative agent under the US Credit
Agreement and the Repayment Agent, as such agreement may be amended,
supplemented or otherwise modified to the extent permitted under Section 15.10.
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"Interest Payment Date" - means (i) in respect of the Canadian Rate
Loan and the Canadian Base Rate Loan, the last Business Day of each and every
month, and the date of any repayment or prepayment thereof and (ii) in respect
of the Libor Loan, for each Libor Loan Portion the last day of each Interest
Period in respect of such Libor Loan Portion, the date of any repayment or
prepayment thereof and, if any Interest Period is longer than three months, the
last day of the three month period starting on the first day of such Interest
Period, the last day of each successive three month period and the last day of
such Interest Period.
"Interest Period" - for each Libor Loan Portion means (a) the first
period of approximately one month, two months, three months, six months or,
subject to availability, nine or twelve months selected by the Borrower and
notified to the Administrative Agent in accordance with Section 5.5, which
period shall commence on the Drawdown Date or Conversion Date, as the case may
be, of such Libor Loan Portion, and (b) each of the successive periods of
approximately one month, two months, three months, six months or, subject to
availability, nine or twelve months in respect of such Libor Loan Portion
selected by the Borrower and notified to the Administrative Agent in accordance
with Section 5.5, each of which shall commence on the last day of the
immediately preceding Interest Period in respect of such Libor Loan Portion;
provided, however, that:
(i) the duration of any Interest Period with respect to any portion of
the Term Loans which otherwise would end after the Term Loan Maturity
Date applicable to each Lender shall end on such Term Loan Maturity
Date and the duration of any Interest Period with respect to any
portion of the Revolving Loans which otherwise would end after the
Revolving Loan Commitment Termination Date applicable to each Lender
shall end on such Revolving Loan Commitment Termination Date;
(ii) Interest Periods commencing on the same day for Libor Advances
comprising part of the same Libor Loan Portion shall be of the same
duration;
(iii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day;
provided, in the case of any Interest Period for a Libor Advance, that,
if such extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day; and
(iv) there may not, at any one time, be more than five different
Interest Periods in effect for Libor Advances.
"Investments" - means any loan, advance, deposit, extension of credit,
capital contribution or investment to or in any Person, or any purchase or other
acquisition for a consideration of any evidences of Indebtedness, capital stock
or other securities of any Person or the acquisition of assets of another Person
in circumstances which would qualify such acquisition as a bulk sale of an
enterprise.
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"Law" - means all applicable provisions of statutes, ordinances,
decrees, rules, regulations, treaties and all applicable determinations,
rulings, orders and decrees of Governmental Authorities.
"Lender" - means any Person that either (i) is designated as a Lender
on the signature pages hereof and has not assigned all of its rights and
obligations in the portion of the Credit available to the Borrower or (ii)
becomes a Lender after the date hereof by virtue of an assignment by a Lender of
such Lender's rights and obligations hereunder and makes the representations set
forth in Section 16.1.11, and "Lenders" means such Persons, collectively.
"Letter of Credit Exposure" - means at a particular time, the sum in
USDollars of (i) the undrawn and unexpired aggregate amount of all Letters of
Credit outstanding in USDollars plus the Equivalent Amount in USDollars of all
Letters of Credit outstanding in CDollars and (ii) the aggregate amount of
drawings under the Letters of Credit in USDollars plus the Equivalent Amount in
USDollars of drawings under the Letters of Credit in CDollars which have not
been reimbursed pursuant to Section 7.8.2.
"Letters of Credit" - means, collectively, the Commercial Letters of
Credit and the Standby Letters of Credit.
"LIBOR" - means, for any Interest Period for each Libor Loan Portion,
an interest rate per annum determined on the basis of the rate for deposits in
US Dollars for a period equal to such Interest Period commencing on the first
day of such Interest Period appearing on Page 3750 of the Telerate screen as of
11:00 A.M. (London time) two Business Days prior to the beginning of such
Eurodollar Interest Period; provided, however, that in the event that such rate
does not appear on Page 3750 of the Telerate Service (or otherwise on such
service), LIBOR shall be (i) determined by reference to such other publicly
available service for displaying Eurodollar rates as may be agreed upon by
Administrative Agent and the Borrower or (ii) in the absence of such agreement,
the rate per annum equal to the arithmetic average (rounded upwards, if
necessary, to the nearest 1/16 of 1% per annum) of the rate per annum at which
deposits in USDollars are offered by the principal office of each of the
Reference Lenders in London to prime banks in the London Interbank Market at
approximately 11:00 a.m. (London time) two Business Days before the first day of
such Interest Period in an amount substantially equal to the amount of the Libor
Loan Portion to be outstanding during such Interest Period and for a period
equal to such Interest Period. LIBOR (as calculated in accordance with clause
(ii) of the preceding proviso) for each Interest Period for each Libor Loan
Portion shall be determined by the Administrative Agent on the basis of
applicable rates furnished to and received by the Administrative Agent from the
Reference Lenders two Business Days before the first day of such Interest Period
subject, however, to the provisions of Section 5.7.1, and provided, however,
that for the purposes of Section 3.4, the preceding sentence shall be read with
reference to the Lender offering the Bid Advance rather than the Reference
Lenders.
"Libor Advance" - means an advance in USDollars to which LIBOR is
applicable pursuant to Section 3.3 or Section 3.4, as the context requires.
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<PAGE>
"Libor Loan" - means at any given time during the term of this
Agreement the Loan, or that portion of the Loan, upon which interest is payable
at a rate determined by reference to LIBOR.
"Libor Loan Portion" - means the amount of the Libor Loan or any
portion of the Libor Loan in respect of which the Borrower has selected an
Interest Period or Interest Periods commencing on the same date and having the
same duration.
"Lien" - means a mortgage, hypothecation, legal hypothecation, prior
claim, pledge, privilege, lien, charge or encumbrance, whether fixed or
floating, on, or any security interest in any property, whether immovable or
real, movable or personal, or mixed, tangible or intangible or a pledge or
hypothecation thereof or any conditional sale agreement or other title retention
agreement or equipment trust relating thereto or any lease relating to property
which would be required to be accounted for as a capital lease on a balance
sheet; provided, however, that any grant of trackage, haulage, switching or
running rights or similar rights shall not constitute a "Lien".
"Loan" - at any given time means the aggregate principal amount of all
Advances outstanding at such time but including, without limitation, the face
amount of all Bankers' Acceptances which have been accepted by the Lenders and
in respect of which the Lenders have not received payment of an equivalent
amount from the Borrower, the amount of all BA Equivalent Advances and the
Letter of Credit Exposure.
"Loan Party" - means the Borrower and each Guarantor, and "Loan
Parties" means all such Persons, collectively.
"Loss" - means any loss, including any expense, cost, damage, penalty,
fine, liability or obligation, which results, or may result, directly or
indirectly, from any event, fact or circumstance or series of events, facts or
circumstances.
"Majority Lenders" - means at any time:
(i) with respect to any amendment, modification or waiver of
any provision contained in Articles 2, 10, 11 or 12 (other than
Sections 12.1.1, 12.1.2 and 12.1.11) of this Agreement, or the
definitions in Article 1 as used therein, including without limitation
any waiver of compliance therewith as a condition to making any Advance
or Bid Advance, Lenders and the lenders party to the US Credit
Agreement having or holding more than 50% of the sum of (w) prior to
funding of the Term Loans, the aggregate Term Loan Commitments and,
upon and after funding of the Term Loans, the aggregate principal
amount of Term Loans outstanding at such time, plus (x) prior to
funding of the US Term Loans, the aggregate commitments to make US Term
Loans under the US Credit Agreement and, upon and after funding of the
US Term Loans, the aggregate principal amount of US Term Loans
outstanding at such time, plus (y) prior to the cancellation or
termination of the Revolving Loan Commitments, the aggregate
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Revolving Loan Commitments at such time and, upon and after the
termination or cancellation of the Revolving Loan Commitments, the
aggregate principal amount of the Revolving Loans and Bid Loans
outstanding at such time and participations in the Letter of Credit
Exposure at such time, plus (z) prior to the cancellation or
termination of the commitments to make US Revolving Loans, the
aggregate amount of such commitments at such time and, upon and after
the termination or cancellation of such commitments, the aggregate
principal amount of the US Revolving Loans and Bid Loans outstanding at
such time and participations in the Letter of Credit Exposure (as such
terms are defined in the US Credit Agreement) at such time; and
(ii) except as otherwise provided in clause (i) of this
definition, Lenders having or holding more than 50% of the sum of (w)
prior to funding of the Term Loans, the aggregate Term Loan Commitments
and, upon and after funding of the Term Loans, the aggregate principal
amount of Term Loans outstanding at such time, plus (y) prior to the
cancellation or termination of the Revolving Loan Commitments, the
aggregate Revolving Loan Commitments at such time and, upon and after
the termination or cancellation of the Revolving Loan Commitments, the
aggregate principal amount of the Revolving Loans and Bid Loans
outstanding at such time and participations in the Letter of Credit
Exposure at such time.
"Material Adverse Effect" - means a material adverse change in or
effect on, either individually or in the aggregate, the condition, operations,
properties, business or results of operations of the Borrower and its
Subsidiaries, taken as a whole, which adversely affects or could reasonably be
expected to adversely affect the ability of the Borrower and the Guarantors,
taken as a whole, to perform their obligations under this Agreement or the US
Credit Agreement in accordance with the terms hereof and thereof, provided that
if the only material adverse change or effect does not or could not reasonably
be expected to result in a Loss (net of any insurance proceeds actually
received) to the Borrower or its Subsidiaries in the aggregate of an amount
equal to more than three percent (3%) of the Borrower's consolidated Tangible
Net Worth, based upon the most recent financial statements of the Borrower and
its Consolidated Subsidiaries delivered pursuant to Section 11.1 (calculated, at
any date, on a pro forma basis giving effect to the Merger), such material
adverse change or effect will be deemed not to constitute a Material Adverse
Effect. Except as otherwise provided herein, the final determination of whether
any change or effect constitutes a Material Adverse Effect shall be made by the
Majority Lenders, in their reasonable opinion.
"Material Subsidiary" - means each of the Guarantors and, at any date,
any Subsidiary of the Borrower which has a Tangible Net Worth in an amount equal
to or greater than two percent (2%) of the Borrower's consolidated Tangible Net
Worth, based upon the most recent financial statements of such Subsidiary and of
the Borrower and its Consolidated Subsidiaries delivered pursuant to Section
11.1 (calculated, at any date, on a pro forma basis giving effect to the
Merger), (or the Equivalent Amount thereof in USDollars if organized under the
laws of the United States or any State thereof or the District of Columbia).
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"Merger" - means the merger of Merger Sub with and into Target in
accordance with the terms of the Merger Agreement with Target being the
surviving corporation in such Merger.
"Merger Agreement" means that certain Agreement and Plan of Merger by
and among the Borrower, Merger Sub and Target dated as of February 10, 1998, as
amended by Amendment No. 1 thereto dated as of March 4, 1998 and as such
agreement may be further amended from time to time thereafter to the extent
permitted under Section 11.4.8.
"Merger Date" means the date that the Merger becomes effective in
accordance with the terms of the Merger Agreement.
"Merger Sub" means Blackhawk Merger Sub, Inc., a Delaware corporation
and an indirect wholly-owned Subsidiary of the Borrower.
"Minimum Shares" means 50.1% of the outstanding shares of Target Common
Stock, on a fully-diluted basis, required to be purchased by Merger Sub in order
to cause the Merger to occur, as adjusted in accordance with any amendment to
the Tender Offer Materials permitted hereunder.
"Minor Title Defects" - means title defects or irregularities which are
of a minor nature and in the aggregate will not substantially impair the use of
the property affected by such title defect or irregularity for the purposes for
which it is held by the owner thereof, nor substantially diminish any Liens
thereon.
"Money Market Loan" - means a loan by a Lender to the Borrower pursuant
to Section 3.5.
"Money Market Reduction" - has the meaning specified in Section 3.2.1.
"Moody's" - means Moody's Investors Service, Inc. or its successor.
"Multiemployer Plan" - means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which the Borrower or
any ERISA Affiliate of the Borrower is then making, or, pursuant to an
applicable collective bargaining agreement, accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be an ERISA Affiliate of
the Borrower during such five-year period.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale, cash
payments (including any cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with such Asset Sale, including but not limited to (i)
income taxes reasonably estimated to be actually payable as a result of any gain
recognized in connection with such Asset Sale, (ii) payment of the outstanding
principal amount
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of, premium or penalty, if any, and interest on any Indebtedness that is secured
by a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale, and (iii) any amount to
be paid to the shareholders of Target as contemplated in the memorandum of
understanding dated March 2, 1998, among the Borrower, the plaintiffs to certain
class actions brought on behalf of stockholders of the Target challenging the
acquisition by the Borrower of Target Common Stock and the Merger and their
respective counsel, following a sale of any common stock of Target upon failure
to obtain approval by the STB of the Borrower's acquisition of control of
Target.
"Net Profits" - means, as at any time, the sum of (i) the net after tax
income or earnings of the Borrower and its Consolidated Subsidiaries, excluding
non-recurring gains or losses resulting from a re-evaluation of any of its Fixed
Assets occurring after the Closing Date, plus (ii) special charges and
unrealized foreign exchange losses related to long term debt denominated in
foreign currencies, in each case to the extent deducted in determining such net
after tax income or earnings, minus (iii) unrealized foreign exchange gains
related to long term debt denominated in foreign currencies, to the extent added
in determining such net after tax income or earnings, minus (iv) the cash effect
of special charges described in clause (ii) recorded following the date hereof,
in each case calculated on a consolidated and annual or quarterly basis, as the
case may be, as reflected on the then most recent consolidated statement of
income of the Borrower and its Consolidated Subsidiaries.
"Non-Railway Properties" - means all immovable or real properties of
the Borrower and its Subsidiaries, other than Properties of the Borrower and its
Consolidated Subsidiaries.
"Notice of Bid Borrowings" - has the meaning specified in Section
3.4.1(i).
"Notice of Borrowing" - means an irrevocable notice addressed to the
Administrative Agent in substantially the form of Schedule 1.1B, specifying in
respect of a proposed Borrowing the Drawdown Date, the amount, the proposed
currency, and, in respect of a proposed Borrowing to which LIBOR will be
applicable, the initial Interest Period and in respect of a proposed Borrowing
by way of Acceptances, the Business Day upon which the Bankers' Acceptances will
mature.
"Notice of Conversion" - means an irrevocable notice delivered by the
Borrower pursuant to Section 4.3 substantially in the form of Schedule 1.1C.
"Notice of Optional Repayment" - means an irrevocable notice delivered
by the Borrower pursuant to Section 4.2.1 in substantially the form of Schedule
1.1D.
"Obligations" - means all obligations of any Loan Party, from time to
time owed to the Agents, Lenders or any of them under this Agreement (including
the Guarantee in Article 17) or the Bankers' Acceptances, whether for principal,
interest, reimbursement of amounts drawn under Letters of Credit, fees,
expenses, indemnification or otherwise.
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"Officers' Certificate" - means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer) or its president or one of its vice presidents or its chief
legal officer and by its chief financial officer or its treasurer in their
respective capacities as such officers; provided that every Officers'
Certificate with respect to the compliance with a condition precedent to the
making of the Advances hereunder shall include a statement that the officers
making or giving such Officers' Certificate certify that, to the best of their
knowledge after due inquiry, the relevant condition has been complied with.
"Optional Repayment Date" - means each day which the Borrower has
notified the Administrative Agent in a Notice of Optional Repayment as the date
on which the Borrower shall repay the Borrowings under the Credit, or a portion
thereof, in accordance with Section 4.2.1.
"Other Target Shares" has the meaning assigned to that term in the
Preliminary Statements to this Agreement.
"PBGC" - means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Participant" - has the meaning specified in Section 16.1.3.
"Participation" - of a Lender means the percentage of the Total
Commitment indicated opposite its name on Schedule 1.1A annexed hereto or, as
the context requires, the amount of such Participation in any Advance or in any
repayment thereof or, as the context may require, in any payment of interest or
fees or other payment, as adjusted to give effect to any assignments made to or
by such Lender made pursuant to this Agreement.
"Permitted Business Acquisition" - means an Acquisition of a business
similar to or in support of the railway business provided that (i) any
Indebtedness incurred by the Borrower or its Subsidiaries in connection
therewith does not create any Event of Default, or would create an Event of
Default but for the requirement that notice be given or time elapse or both,
(ii) all transactions related thereto shall be consummated in accordance with
applicable Laws, and (iii) at least 51% of the controlling interest must be
owned directly by the Borrower or its Subsidiaries. The Borrower shall be
permitted to acquire such interests and assets by incurring related Indebtedness
as necessary to consummate all related transactions, provided no Event of
Default or event which, but for the requirement that notice be given or time
elapse or both, would be an Event of Default, results therefrom.
"Permitted Encumbrances" - means, as at any time, any one or more of
the following:
(i) reservations in any original grants from the Crown of any land or
interest therein, statutory exceptions to title and reservations of
mineral rights (including coal, oil and natural gas) in any grants from
the Crown or from any other predecessors in title;
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(ii) servitudes of rights of way or for purposes of public utility, or
for encroachments, rights of view or otherwise, including, without in
any way limiting the generality of the foregoing, the sewers, drains,
gas and water mains, steam transport, electric light and power or
telephone and telegraph conduits, poles and cables, pipelines or zoning
restrictions affecting the use of the Borrower's or any of its
Subsidiaries' immovable properties which will not materially or
adversely impair the use for which any one of the Borrower's or any
such Subsidiary's immovable properties is intended nor substantially
diminish any Liens thereon;
(iii) any Lien for taxes, assessments or other governmental charges or
levies not yet due or, if due, the validity of which is being contested
diligently and in good faith by or on behalf of the Borrower or any of
its Subsidiaries, provided the action to enforce the same has not
proceeded to final non-appealable judgment and adequate provision has
been made for the payment thereof in accordance with generally accepted
accounting principles;
(iv) any Lien of any judgment rendered or claim filed against the
Borrower or any of its Subsidiaries, which the Borrower or any such
Subsidiaries or others on its behalf shall be contesting diligently and
in good faith, provided the action to enforce the same has not
proceeded to final non-appealable judgment and adequate provision has
been made for the payment thereof in accordance with generally accepted
accounting principles;
(v) any Lien of any craftsman, workman, builder, contractor, supplier
of materials, architect, engineer or subcontractor of any other similar
Lien related to the construction or the renovation of any property,
provided that such Lien secures an obligation whose term has not
expired or that the Borrower or any of its Subsidiaries is not in
default to perform same, or if its term has expired or the Borrower or
any of its Subsidiaries is in default to perform same, provided that
the Borrower or any such Subsidiary commences action within a delay of
less than fifteen (15) days of its registration or publication to cause
its cancellation or radiation unless the validity of such Lien is being
contested diligently and in good faith by or on behalf of the Borrower
or any such Subsidiary provided the action to enforce the same has not
proceeded to final non-appealable judgment and adequate provision has
been made for the payment thereof in accordance with generally accepted
accounting principles;
(vi) Minor Title Defects;
(vii) the pledges or deposits made pursuant to Laws relating to
workmen's compensation or similar Laws, or deposits made in good faith
in connection with offers, tenders, leases or contracts (excluding,
however, the borrowing of money or the repayment of money borrowed),
deposits of cash or securities in order to secure appeal bonds or bonds
required in respect of judicial proceedings;
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(viii) undetermined or inchoate Liens, arising or potentially arising
under statutory provisions which have not at the time been filed or
registered in accordance with applicable Law or of which written notice
has not been duly given in accordance with applicable Law or which,
although filed or registered, relate to obligations not due or
delinquent;
(ix) the rights reserved to or vested in municipalities or governmental
or other public authorities or agencies by statutory provisions or by
the terms of leases, licenses, franchises, grants or permits, which
affect any land, to terminate any such leases, licenses, franchises,
grants or permits or to require annual or other payments as a condition
to the continuance thereof;
(x) securities to public utilities or to any municipalities or
governmental or other public authorities when required by the utility,
municipality, governmental or other public authority in connection with
the supply of services or utilities to the Borrower or its
Subsidiaries;
(xi) any Lien created on assets of the Borrower or its Subsidiaries
acquired or constructed after the date of this Agreement, and any Lien
created on the shares or assets of a business entity acquired by the
Borrower or any of its Subsidiaries after the date of this Agreement,
in each case provided such Lien is created within one hundred and
twenty (120) days after the time of purchase, delivery or construction
and commencement of full operation thereof, whichever is later, as
security for the payment of any part of the purchase price or
construction cost of such assets or of such business entity;
(xii) any Lien existing on assets acquired by the Borrower or any of
its Subsidiaries at the time of such acquisition or on the outstanding
shares or assets of, or in respect of indebtedness or other obligations
of, a corporation or firm at the time such corporation or firm becomes
a Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or a Subsidiary of the Borrower or at the time of sale, lease
or other disposition of the assets of a corporation or firm as an
entirety or substantially as an entirety to the Borrower or a
Subsidiary of the Borrower;
(xiii) any present or future conditional sales agreement or other title
retention agreement (including any capital leases) with respect to
assets of the Borrower or its Subsidiaries acquired after the date of
this Agreement or any Lien on rolling stock or equipment of the
Borrower or its Subsidiaries acquired after the date of this Agreement;
(xiv) [intentionally left blank];
(xv) any Lien created as a result of the securitization or monetization
of assets in the ordinary course of business of the Borrower or its
Subsidiaries permitted by the terms of this Agreement;
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(xvi) any Lien granted as part of any refundings or renewals of the
outstanding amounts referred to in clauses (xi) to (xv) above or of any
secured debt of the Borrower or any of its Subsidiaries outstanding as
of the date of this Agreement, provided such Lien is restricted to the
same collateral;
(xvii) Liens on, deposits and pledges of, in trust or otherwise,
funding proceeds in the form of cash or Permitted Investments raised in
connection with financing or leasing of rolling stock by the Borrower
or any of its Subsidiaries and to be subsequently utilized to complete
the purchase and/or leasing of said rolling stock;
(xviii) Liens existing on the date of this Agreement as reflected on
the financial statements of the Borrower and its Consolidated
Subsidiaries as of the fiscal year ended December 31, 1997 and of the
Target and its Subsidiaries as of the STB Approval Date;
(xix) any Lien created on Non-Railway Properties as security for and in
satisfaction of requirements under workmen's compensation or similar
Laws, provided the aggregate amount at any time secured by such Liens
shall not at any time exceed C$175,000,000; and
(xx) any Lien on monies in relation to leasing or financing of rolling
stock entered into after the date of this Agreement by the Borrower or
its Subsidiaries, provided the aggregate amount at any time secured by
such Liens shall not exceed C$50,000,000.
"Permitted Investments" - means:
(a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the government of Canada or
the United States of America (or by any agency thereof to the extent
such obligations are backed by the full faith and credit of Canada or
the United States of America);
(b) marketable general obligations issued by any province of Canada or
by any state of the United States of America or any political
subdivision of any such province or state or any corporation or public
instrumentality thereof and, at the time of acquisition, having a
credit rating of "A-1" from S&P or its equivalent from Moody's, CBRS or
DBRS;
(c) investments in commercial paper or other similar marketable
promissory notes maturing no longer than one (1) year from the date of
acquisition thereof and having, at such date of acquisition, a credit
rating of "A-1" from S&P or its equivalent from Moody's, CBRS or DBRS;
(d) investments in Canadian, U.S. or Eurodollar certificates of
deposit, banker's acceptances and time deposits maturing within one (1)
year from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts
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issued or offered by any Canadian or U.S. offices of any commercial
bank organized or licensed under any Laws of Canada or the United
States of America or any province or state thereof having a credit
rating of "A-1" from S&P or its equivalent from Moody's, CBRS or DBRS;
(e) investments in money market funds or other mutual funds that invest
in, or repurchase obligations that are comprised of, the types of
Permitted Investments described in clauses (a) through (d) above;
(f) investments in obligations or securities received in settlement of
debts (created in the ordinary course of business) owing to the
Borrower or any of its Subsidiaries or any of their Affiliates and
joint ventures;
(g) investments (other than intercompany debt referred to in clause (h)
below) by the Borrower in its present or future Consolidated
Subsidiaries, Affiliates, joint ventures, partnerships, associations,
trusts and any other forms of business ventures and intercompany debt
relating to financial and tax planning actions of the Borrower or its
Subsidiaries, as the case may be;
(h) extensions of credit and intercompany debt to any purchaser of
inventory or services in the ordinary course of business and for the
purpose of carrying the same;
(i) any investments of the funding proceeds described in clause (xvii)
or of the monies described in clause (xx) under the definition of
Permitted Encumbrances;
(j) Permitted Business Acquisitions;
(k) seller notes received as consideration with respect to any
disposition of assets (other than any disposition of stock of Target)
permitted under this Agreement; and
(l) Investments made in connection with the Reorganization;
provided, however, that no investments may be made by the Borrower or any of its
Subsidiaries pursuant to clauses (g) and (j) through (l) above if an Event of
Default exists at the time of such investments or would result therefrom unless
the Administrative Agent, by prior written consent, agrees with such
investments.
"Person" - means any legal or natural person, corporation, company,
firm, joint venture, partnership, whether general, limited or undeclared, trust,
association, unincorporated organization, Governmental Authority or other entity
of whatever nature.
"Plan" - means at any time any employee pension benefit plan (other
than a Multi-employer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Code and either (a) is
maintained, or contributed to, by the
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Borrower or any ERISA Affiliate of the Borrower for employees of the Borrower or
any ERISA Affiliate of the Borrower, or (b) has at any time within the preceding
five years been maintained, or contributed to, by the Borrower or any Person
which was at such time an ERISA Affiliate of the Borrower for employees of the
Borrower or any Person which was at such time an ERISA Affiliate of the
Borrower.
"Pro Forma Closing Balance Sheet" - has the meaning assigned to that
term in Section 2.1.7.
"Prohibited Transaction" - shall mean any transaction involving any
Plan which is proscribed by Section 406 of ERISA or Section 4975 of the Code and
for which an exception is not available under Section 408 of ERISA or Section
4975 of the Code.
"Properties" - means all main and branch lines of railway, including
all immovable or real properties used as the right of way for such lines of the
Borrower and its Consolidated Subsidiaries.
"Public Debt Rating" - means, as of any date, the rating for any class
of long-term public or private unsecured debt securities issued by the Borrower
(i) with respect to S&P, as most recently announced by S&P, or (ii) with respect
to Moody's, as most recently announced by Moody's, as the case may be; provided
that, being Unrated, whether or not so announced, shall be the lowest possible
rating.
"Reference Lenders" - means (i) the Administrative Agent and (ii) NBD
Bank and, solely for purposes of calculating the Discount Rate, Citibank, or in
lieu of either Reference Lender referred to in this clause (ii), another Lender
that is listed in Schedule II to the Bank Act (Canada) agreed upon by the
Borrower and the Administrative Agent.
"Reimbursement Obligation" - means the obligation of the Borrower to
reimburse the Administrative Agent pursuant to Section 7.8.
"Related Agreements" - means, collectively, the Merger Agreement and
the Voting Trust Agreement.
"Release" - means discharge, spray, inject, inoculate, abandon,
deposit, spill, leak, seep, pour, emit, empty, throw, dump, place and exhaust,
and when used as a noun has a similar meaning.
"Reorganization" - means the sale, transfer and assignment by the
Borrower to CNR Properties of all or substantially all of the Canadian real
estate assets held by the Borrower (other than in the Province of Quebec) on the
date hereof, any borrowings by the Borrower and CNR Properties in connection
therewith (so long as such borrowings (other than intercompany loans from the
Borrower to CNR Properties) are repaid in full on the Business Day on which they
have been made or on the next following Business Day) and all other transactions
entered
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into by the Borrower and CNR Properties in connection therewith, all
substantially on the terms described by the Borrower to the Agents prior to the
date hereof.
"Repayment Agent" - means Bank of Montreal or any successor thereto
under the Intercreditor Agreement.
"Reportable Event" - means a reportable event as described in Section
4043 of ERISA for which notice is required to be given to the PBGC.
"Revolving Loan Commitment" - in relation to a Lender means at any time
until cancelled or terminated in accordance with this Agreement, the commitment
of such Lender to make Revolving Loans pursuant to Section 3.2 (in the case of
each initial Lender being in the amount set opposite its name on Schedule 1.1A
annexed hereto, as such Lender's Revolving Loan Commitment or, to the extent
expressly permitted by this Agreement, the Equivalent Amount thereof in
CDollars, from the Applicable Lending Office or Offices shown thereon), as
adjusted to give effect to any assignment or reductions made pursuant to this
Agreement or any increases thereto pursuant to Section 4.8.
"Revolving Loan Commitment Termination Date" - means, with respect to
each Lender, the earlier of (i) the fifth anniversary of the Initial Funding
Date (but no later than March 31, 2003) and (ii) the date on which the Revolving
Loan Commitment of such Lender shall have terminated pursuant to Section 4.7 or
12.2.
"Revolving Loans" means the Advances made by Lenders to the Borrower
pursuant to Section 3.2.
"S&P" - means Standard and Poor's Rating Group or its successor.
"Shareholders' Equity" - means, for any Person, as at any time, the sum
of all issued and fully paid capital stock of that Person at par or stated
value, paid-in capital surplus, contributed capital and retained earnings and
Subordinated Debt of that Person, but exclusive of (i) any goodwill (other than
goodwill associated with the acquisition of Target Common Stock and the Merger),
and (ii) any write-up occurring after the Closing Date of the value of any asset
if made on the books of that Person which impacts shareholders' equity on the
most recent consolidated balance sheet of that Person and its Subsidiaries, the
whole calculated at such time on a consolidated and quarterly financial basis.
"Standby Letter of Credit Application" - has the meaning ascribed to it
in Section 7.7.2.
"Standby Letter of Credit" - means an irrevocable letter of credit or
bank letter of guarantee, in either case in a face amount of not less than
C$500,000 or US$500,000, having an expiry date not later than the Revolving Loan
Commitment Termination Date, issued by the Administrative Agent in accordance
with Sections 7.1 and 7.7 for the account of the Borrower in respect of all
obligations of the Borrower incurred pursuant to contracts made or performances
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undertaken or to be undertaken or like matters relating to contracts to which
the Borrower is or proposes to become a party in the ordinary course of its
business, in which the Lenders participate pursuant to Section 7.2.
"STB" - means the Surface Transportation Board, an agency of the
Federal Government of the United States of America.
"STB Approval Date" - means the date on which the STB's approval of the
acquisition of control of Target by the Borrower, without any terms or
conditions not satisfactory to the Borrower, becomes effective.
"Subordinated Debt" - means indebtedness for borrowed money incurred by
a Person which is validly and effectively subordinated and postponed in all
respects including principal, interest, premium if any, security and rank, to
the obligations, liabilities and indebtedness owing to the Lenders under this
Agreement by way of an agreement in form and substance satisfactory to the
Majority Lenders provided that, without limitation, (i) such indebtedness is
treated as subordinated debt in accordance with generally accepted accounting
principles, (ii) such indebtedness is not recognized or classified as debt by
S&P and Moody's, (iii) such indebtedness has a maturity date of at least five
(5) years from the date of its issue or creation and, in any event, at least one
(1) year beyond the then current Revolving Loan Commitment Termination Date,
(iv) without limiting the foregoing, the Majority Lenders shall be entirely
satisfied with the covenants and default clauses in the agreement pursuant to
which such indebtedness is created, and (v) the terms of the instrument
evidencing such indebtedness or under which such indebtedness is outstanding
reflect the provisions of this definition to the satisfaction of the Majority
Lenders.
"Subsidiary" - of a Person means a company or corporation controlled by
that Person but, in the case of the Borrower, does not include any Excluded
Subsidiaries. Notwithstanding the foregoing, except for purposes of the
definition of "Material Adverse Effect" and for purposes of the calculations in
and determining compliance with Section 11.2, unless otherwise specified herein,
Target and its Subsidiaries shall not be deemed Subsidiaries of the Borrower for
purposes of this Agreement until the STB Approval Date; provided, that Target
and its Subsidiaries shall not be deemed Subsidiaries of the Borrower for
purposes of determining compliance with Article 2 hereof until 90 days after
such date.
"Surviving Corporation" has the meaning assigned to that term in the
Preliminary Statements to this Agreement.
"Surviving Corporation Common Stock" has the meaning assigned to that
term in the Preliminary Statements to this Agreement.
"Tangible Net Worth" - means, for any Person, as of any date, the
Shareholders' Equity of such Person and its Subsidiaries on the then most recent
consolidated balance sheet of such Person and its Subsidiaries; excluding,
without duplication, however, from the determination thereof: capitalized
research and development expenses, trademarks, trade names, copyrights, patents,
patent applications, licenses and rights in any thereof, and other similar
intangibles.
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"Target Common Stock" has the meaning assigned to that term in the
Preliminary Statements to this Agreement.
"Tax" - means all taxes, assessments, levies, imposts, stamp taxes,
duties, charges to tax, fees, deductions, withholdings and any restrictions or
conditions resulting in a charge imposed, levied, collected, withheld or
assessed as of the date of this Agreement or at any time in the future, and all
penalty, interest and other payments on or in respect thereof.
"Tender Offer" means the offer by Merger Sub to purchase for cash
shares of Target Common Stock pursuant to the Tender Offer Materials.
"Tender Offer Materials" means the Tender Offer Statement on Schedule
14D-1 filed by the Borrower and Merger Sub on February 13, 1998 with the
Securities and Exchange Commission pursuant to Section 14(d)(1) of the Exchange
Act, together with (i) all exhibits, supplements and amendments thereto and any
other amendments prior to the date hereof and (ii) any amendments after the date
hereof permitted under Section 11.4.8.
"Tendered Target Shares" means all shares of Target Common Stock
tendered to and purchased by Merger Sub pursuant to the Tender Offer.
"Term Loan Commitment" - in relation to a Lender means at any time
until cancelled or terminated in accordance with this Agreement, the amount set
opposite its name on Schedule 1.1A annexed hereto as such Lender's Term Loan
Commitment from the Applicable Lending Office or Offices shown thereon.
"Term Loan Maturity Date" - means, with respect to each Lender, the
earlier of (i) the first anniversary of the Initial Funding Date and (ii) the
date on which the Term Loan Commitment of such Lender shall have terminated
pursuant to Section 4.7 or 12.2.
"Term Loans" means the Advances made by the Lenders to the Borrower
pursuant to Section 3.1.
"Total Capitalization" - means Total Debt plus Shareholders' Equity of
the Borrower.
"Total Commitment" - means the aggregate of the Commitments of all
Lenders less any amounts by which they shall have been cancelled, terminated or
reduced pursuant to Section 4.7 or Section 12.2.
"Total Debt" - means, at any time, the aggregate of all Indebtedness of
the Borrower and its Consolidated Subsidiaries plus the present value (using a
discount rate of 10% per annum) of all operating lease commitments of the
Borrower and its Consolidated Subsidiaries less available cash and cash
equivalents of the Borrower and its Consolidated Subsidiaries, all at such time.
For the purposes of the foregoing, the expression "cash equivalents" means the
Permitted Investments set forth in paragraphs (a) through (e) of the definition
of Permitted Investments in this Section 1.1.
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"Total Utilization of Revolving Loan Commitments" - means at any time
the aggregate of (a) the sum of the amount of Advances made to the Borrower in
USDollars pursuant to the Revolving Loan Commitments, the Equivalent Amount in
USDollars of the Advances (including by way of Acceptances) made to the Borrower
in CDollars pursuant to the Revolving Loan Commitments and the amount of Bid
Advances, and (b) the amount of any Letter of Credit Exposure at such time.
"Transaction Costs" means the sum of all fees, costs and other similar
amounts payable by the Borrower or Merger Sub in connection with the
transactions contemplated by this Agreement, the Tender Offer Materials and the
Related Agreements.
"Unrated" - means, as of any date, that S&P or Moody's, as applicable,
on such date has not announced the rating for any class, or has terminated a
prior rating for each class, of long-term public or private unsecured debt
securities issued by the Borrower.
"US Credit Agreement" - means that certain Credit Agreement dated as of
the date hereof by among Grand Trunk, as borrower, the guarantors listed on the
signature pages thereof, the financial institutions listed on the signature
pages thereof, Bank of Montreal, as administrative agent, Goldman Sachs Credit
Partners L.P. and Bank of Montreal, as arrangers, and The Bank of Nova Scotia
and NBD Bank, as co-documentation agents, as such agreement may be amended,
supplemented or otherwise modified to the extent permitted under Section 11.4.9.
"US Credit Documents" - means the US Credit Agreement, the promissory
notes issued thereunder and each other document executed in connection with the
US Credit Agreement.
"USDollars" and the symbol: "US$" - each means the lawful money for the
time being of the United States of America in same day immediately available
funds or, if such funds are not available, the form of money of the United
States of America which is customarily used in the settlement of international
banking transactions on that day.
"US GAAP" - means, subject to the limitations on the application
thereof set forth in Section 1.7, generally accepted accounting principles as in
effect from time to time in the United States, applied on a basis consistent
(except for changes concurred in by the Borrower's independent public
accountants) with the most recent audited consolidated financial statements of
the Borrower and its Consolidated Subsidiaries delivered to the Lenders.
"US Revolving Loans" - means any senior revolving loans borrowed under
the US Credit Agreement and designated as "Revolving Loans" thereunder.
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"US Term Loans" - means the senior term loans borrowed under the US
Credit Agreement and designated as "Term Loans" thereunder.
"Voting Shares" - means the capital stock of any class or classes of a
corporation which carry voting rights under any circumstances provided that, for
the purposes hereof, shares which only carry the right to vote conditionally on
the happening of an event shall be considered Voting Shares only upon the
happening of such event and then only while they retain the right to vote.
"Voting Trust" - means the voting trust established pursuant to the
Voting Trust Agreement.
"Voting Trust Agreement" - means that certain Voting Trust Agreement by
and among the Borrower, Merger Sub, and the trustee thereunder, substantially in
the form attached as Exhibit A to the Merger Agreement as such Voting Trust
Agreement may be amended, supplemented or otherwise modified from time to time
to the extent permitted under Section 11.4.8.
"Wholly-owned Subsidiary" - means a corporation that is wholly owned by
the Borrower directly or indirectly through any number of its Subsidiaries each
of which is wholly owned directly or indirectly by the Borrower.
"Written" or "in writing" shall include printing, typewriting, or any
electronic means of communication capable of being visibly reproduced at the
point of reception including telegraph, telecopier and electronic data
interchange.
1.2 Control
For the purposes of this Agreement, a Person controls a company or
corporation if that Person and/or one or more of its Subsidiaries beneficially
owns, directly or indirectly, an aggregate amount of the Voting Shares of such
company or corporation sufficient to enable it to elect a majority of the
directors (or other persons performing similar functions) of that company or
corporation regardless of the manner in which other Voting Shares are voted or
has, through the operation of any agreement or otherwise, the ability to elect
or cause the election of a majority of the directors (or other persons
performing similar functions), and the expressions "controlled by" and "under
common control" shall have correlative meanings. Notwithstanding the foregoing,
the parties hereto acknowledge and agree that the Borrower, Merger Sub and their
respective Subsidiaries or Affiliates do not control, solely for purposes of
this Agreement, the Target or any of its Subsidiaries solely by holding any
shares of capital stock of Target through the Voting Trust.
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1.3 Computation of Time Periods
In this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding".
1.4 Headings and Table of Contents
The headings of Articles and Sections and the table of contents are
inserted for convenience of reference only and shall not affect the construction
or interpretation of this Agreement.
1.5 References
Unless the context otherwise requires, all references to Sections,
Articles and Schedules are to Sections, Articles and Schedules in this
Agreement.
1.6 Singular and Plural; Gender
In this Agreement, where the context admits, the singular includes the
plural and vice versa; and gender is used as a reference term only and applies
with the same effect whether the parties are of masculine or feminine gender,
corporate or other form.
1.7 Generally Accepted Accounting Principles
Each accounting term used in this Agreement shall be construed in
accordance with US GAAP. Financial statements and other information required to
be delivered by the Borrower pursuant to clauses (ii) and (iii) of Section
11.1.2 shall be prepared in accordance with US GAAP as in effect at the time of
such preparation subject to, with respect to the certificates to be delivered
pursuant to clauses (ii)(E) and (iii)(F) thereof, the last paragraph of Section
11.2. Calculations in connection with the definitions, covenants and other
provisions of this Agreement shall be based on and determined in accordance with
US GAAP as in effect at the time of such calculations subject to, with respect
to the calculations to be made pursuant to Section 11.2 and related definitions,
the last paragraph of Section 11.2.
1.8 Ratable - Portion of Accommodations
References in this Agreement to "Participation of a Lender", "shared by
each Lender pro rata, in accordance with their respective Participations", or
similar expressions shall mean and refer to a ratable portion or share as nearly
as may be ratable in the circumstances, as determined in good faith by the
Administrative Agent. Each such determination by the Administrative Agent shall
be prima facie evidence of such ratable share.
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1.9 Incorporation of Schedules
The schedules annexed hereto shall, for all purposes hereof, form an
integral part of this Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties
The Borrower and each of the Guarantors, for itself, represents and
warrants to each Lender and the Administrative Agent, acknowledging and
confirming that each Lender and the Administrative Agent is relying thereon in
entering into this Agreement and providing accommodations hereunder, that:
2.1.1 the Borrower is a corporation duly continued and validly existing
and in good standing under the laws of Canada, the jurisdiction of its
incorporation; each of the Guarantors is a corporation duly incorporated and
organized and validly existing and in good standing under the laws of its
jurisdiction of incorporation; each Loan Party is duly authorized to do business
wherever the nature of its material property or activities requires
authorization, and it has the corporate power and authority and all material
governmental licenses, authorizations, consents, registrations and approvals
required (i) to own and lease its material properties and assets, to conduct the
business in which it is presently engaged except for such licenses,
authorizations, consents, registrations or approvals as to which failure to
obtain could not have a Material Adverse Effect, and (ii) to enter into and
perform its obligations under this Agreement and the Related Agreements to which
it is a party;
2.1.2 the execution, delivery and the performance by the Borrower and
each of the Guarantors of this Agreement and the Related Agreements to which it
is a party, (i) have been duly authorized by all necessary corporate action,
(ii) do not contravene any provision of its charter, its articles, its
certificate of incorporation, its by-laws, any unanimous agreement of all the
shareholders of the Borrower or any of the Guarantors or any law, decree, order,
rule or regulation of the Province of Quebec, Canada, or any applicable United
States federal law, or any applicable law of any state, or any other
jurisdiction in which its material assets are located, (iii) will not
constitute, or result in a breach of, or a default under, or be in conflict
with, any material deed, indenture, mortgage, franchise, license, judgment,
agreement or instrument to which it or any of its Material Subsidiaries is a
party or by which it or any of its Material Subsidiaries is bound; and (iv) will
not result in any Lien on any of its property or assets;
2.1.3 no authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority or regulatory body is required for
the due execution, delivery and performance by the Borrower and each of the
Guarantors of this Agreement and the Related
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Agreements to which it is a party except for (i) the filing of certain
information and documentary material with the Federal Trade Commission and the
Antitrust Division of the U.S. Department of Justice with respect to the
exemption of the purchase of Target Commons Stock pursuant to the Tender Offer
and the Merger under 15 U.S.C. ss.18a(c)(6) from any additional
Hart-Scott-Rodino requirements, which filing has been made and acknowledged,
(ii) the informal nonbinding opinion of the STB staff to the effect that the
Voting Trust and the deposit of such shares into the Voting Trust will
effectively insulate the Borrower from the violation of Subtitle IV of Title 49
of the United States Code and the policy of the STB that would result if the
Borrower were to acquire without authorization a sufficient interest in the
carrier Subsidiaries of Target as otherwise to result in control, (iii) a final
order of the STB authorizing the acquisition of control of Target by the
Borrower and (iv) such other authorizations or approvals or other action or
notice or filings as have been validly obtained, given or filed and are in full
force and effect, or as to which failure to obtain or give is not, individually
or in the aggregate, material;
2.1.4 this Agreement and each of the Related Agreements has been duly
executed and delivered by the Borrower and each of the Guarantors that is a
party thereto, and is the legal, valid and binding obligation of each such Loan
Party, enforceable against each such Loan Party in accordance with its terms,
except to the extent such enforcement may be restricted by any applicable
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally and subject to the discretion of a court
in regard to the remedy of specific performance;
2.1.5 there is no litigation, action or other legal proceeding pending
or known to be threatened against the Borrower or any of its Subsidiaries which
could have a Material Adverse Effect other than as described in Schedule 2.1.5;
2.1.6 the Borrower and each of the Guarantors is not in default under
this Agreement nor have they done or omitted to do anything which, with the
giving of notice or the passage of time, or both, would constitute an Event of
Default which has not been waived or cured; the Borrower, its Subsidiaries and
each of the Guarantors is not in default in any material respect under any other
agreement for monies borrowed, raised or guaranteed to which the Borrower or any
of its Subsidiaries is a party or by which it is bound, the amount of which
individually or in the aggregate exceeds C$50,000,000, and no holder of such
outstanding Indebtedness has given notice of any default thereunder which has
not been waived or cured;
2.1.7 (i) the unaudited consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of the fiscal year ended December 31, 1997 and
the related consolidated statements of income and shareholders' equity and of
changes in financial position of the Borrower and its Consolidated Subsidiaries
for the fiscal year then ended, copies of which have been furnished to the
Administrative Agent, fairly present the consolidated financial condition of the
Borrower and its Consolidated Subsidiaries as at such date and the results of
the operations of the Borrower and its Consolidated Subsidiaries for the period
ended on such date (subject to changes resulting from audit), all in accordance
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with Canadian generally accepted accounting principles consistently applied; and
(ii) the unaudited pro forma combined balance sheet of the Borrower and Target
and their respective Subsidiaries as of the fiscal year ended December 31, 1997
(the "Pro Forma Closing Balance Sheet"), and the related pro forma combined
statement of income for the fiscal year then ended set forth in the Confidential
Information Memorandum have been prepared on the basis described therein and, to
the actual knowledge of the Borrower, show the combined financial position of
the Borrower and the Target and their respective Subsidiaries as of December 31,
1997 and the combined results of operations of the Borrower and the Target and
their respective Subsidiaries for the fiscal year ended December 31, 1997, in
each case as if the Merger Date and the STB Approval Date had occurred on
January 1, 1997;
2.1.8 there are no outstanding judgments, writs of execution, work
orders, notices of deficiency capable of resulting in work orders, injunctions
or directives against the Borrower or any of its Subsidiaries or any of their
material property or assets which could have a Material Adverse Effect;
2.1.9 the obligations of the Borrower under this Agreement rank at
least pari passu in right of payment with all other unsecured Indebtedness of
the Borrower; the obligations of each of the Guarantors under this Agreement
rank at least pari passu in right of payment with all other unsecured
Indebtedness of each of the Guarantors;
2.1.10 the Borrower and each of its Subsidiaries is the owner of, and
has good and marketable title to, all its assets and the same are free and clear
of all Liens except for Permitted Encumbrances, the title defects disclosed in
Schedule 2.1.10 and other title defects which could not have a Material Adverse
Effect. The Borrower and each Material Subsidiary has the right to and does
enjoy peaceful and undisturbed possession under all leases under which it is
leasing property, other than leases of property which, if abandoned, could not
have a Material Adverse Effect. All such leases are valid, subsisting and in
full force and effect, other than leases of property which, if abandoned, could
not have a Material Adverse Effect and neither the Borrower nor any of its
Material Subsidiaries is in default in the performance, observance or
fulfillment of any of the obligations under any provision of any such leases
except for defaults which could not have a Material Adverse Effect;
2.1.11 to the extent that the Borrower and any of the Guarantors have
insurable assets, a policy of insurance or policies of insurance in compliance
with the requirements of Section 11.1.5 of this Agreement are in effect;
2.1.12 the Borrower and each of its Material Subsidiaries possesses all
the trademarks, trade names, copyrights, patents, licenses or rights in any
thereof, reasonably necessary for the conduct of the business of the Borrower
and its Material Subsidiaries as now conducted and presently proposed to be
conducted which failure to possess could have a Material Adverse Effect. To the
best of the knowledge of the Borrower, neither it nor any of its Subsidiaries is
infringing or, as of the date hereof, is alleged to be infringing on the rights
of any Person with respect to any patent, trademark, trade name, copyright (or
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any application or registration respecting any thereof), discovery, improvement,
process, formula, know-how, data, plans, specification, drawing or the like,
which infringement could have a Material Adverse Effect;
2.1.13 neither the Borrower nor any of its Subsidiaries is in violation
of any applicable Law, which violation could have a Material Adverse Effect.
Neither the Borrower nor any of its Subsidiaries is in violation of any
applicable Environmental Law, and the Borrower and its Subsidiaries have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their business and are in compliance
with the terms and conditions of such permits, licenses or approvals, except as
disclosed (i) on Schedule 2.1.13 annexed hereto or (ii) in the unaudited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries for the fiscal year ended December 31, 1997 and the notes thereto,
delivered pursuant to Section 10.1.7(i), and except for such violation of law or
regulation, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals which could not, singularly or in the aggregate, have a Material
Adverse Effect;
2.1.14 Schedule 2.1.14 contains a list of all pension plans (other than
the Plans) of the Borrower and its Material Subsidiaries. All contributions to
such pension plans required under applicable Laws have been made, except as
disclosed in Schedule 2.1.14 and in the audited consolidated financial
statements of the Borrower and its Consolidated Subsidiaries most recently
delivered to the Lenders. Each registered pension plan listed in Schedule 2.1.14
is funded to the extent that it is required to be funded in accordance with its
material terms and applicable Law and the non-registered pension plan listed in
Schedule 2.1.14 is unfunded but the liabilities thereunder are guaranteed by a
standby letter of credit. Except as disclosed in Schedule 2.1.14, the Borrower
and its Material Subsidiaries do not have any Excess Canadian Pension
Obligations;
2.1.15 the Borrower and each of its Subsidiaries has filed all material
tax returns which are required to be filed and has paid all material Taxes,
interest and penalties, if any, which have become due pursuant to such returns
or pursuant to any assessment received by it and adequate provision for payment
has been made for Taxes not yet due except any such payment of which the
concerned party is contesting in good faith by appropriate proceedings and for
which appropriate reserves have been provided on the books of the Borrower or
the affected Subsidiary as the case may be, and as to which, in each case,
neither any Lien (other than a Permitted Encumbrance of the type described in
clauses (i) through (x) of the definition of Permitted Encumbrances in Section
1.1) has attached nor any foreclosure, distraint, seizure, attachment, sale or
other similar proceedings have been commenced. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of Taxes
are adequate, in the judgment of the Borrower;
2.1.16 [intentionally omitted];
2.1.17 there has been no Material Adverse Effect since September 30,
1997;
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2.1.18 (a) neither the Borrower nor any of the Guarantors is a "public
utility company" or a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended;
(b) neither the Borrower nor any of the Guarantors is an
"investment company" or an "affiliated person" of an "investment company" or a
company "controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended. Neither the Borrower nor any of the
Guarantors is an "investment adviser" or an affiliated person" of an "investment
adviser" as such terms are defined in the Investment Advisers Act of 1940, as
amended;
2.1.19 except as set forth on Schedule 2.1.19 annexed hereto, there is
no fact known to the Borrower or its Subsidiaries which could have a Material
Adverse Effect which has not been fully disclosed to the Administrative Agent or
the Lenders other than matters of a general economic nature;
2.1.20 the Borrower and each of its Material Subsidiaries possesses all
material franchises, certificates, licenses, permits and other authorizations or
exemptions from regulatory authorities and other Governmental Authorities, free
from burdensome restrictions or known conflict with the rights of others, that
are necessary for the ownership, maintenance and operation of its properties and
assets and the conduct of its business as now conducted and as proposed to be
conducted, and neither the Borrower nor any of the Material Subsidiaries is in
violation of any thereof, which failure to possess or violation could have a
Material Adverse Effect;
2.1.21 each Canadian Plan is in compliance in all material respects
with all applicable Laws; neither the Borrower nor any of its Material
Subsidiaries has incurred any material liability to any Canadian Plan, whether
on account of any failure to meet the contribution or minimum funding
requirements applicable thereto, or relating to the administration or
termination of any Canadian Plan and no event has occurred and no condition
exists which presents a material risk that the Borrower or any of its Material
Subsidiaries will incur liabilities on account of the foregoing circumstances
which are material in the aggregate. Except as disclosed in Schedule 2.1.21, no
Canadian Plan is a Deficient Canadian Plan;
2.1.22 each of the Borrower and each ERISA Affiliate of the Borrower
(a) has fulfilled its obligations under the minimum funding standards of ERISA
and the Code with respect to each Plan and (b) is in compliance in all respects
with the presently applicable provisions of ERISA and the Code with respect to
each Plan except for failures to comply which could not, singularly or in the
aggregate, have a Material Adverse Effect. Neither the Borrower nor any ERISA
Affiliate of the Borrower has (x) sought a waiver of the minimum funding
standard under Section 412 of the Code in respect of any Plan, (y) failed to
make any contribution or payment to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement, or made any amendment to any Plan or Benefit
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Arrangement, which has resulted or could result in the imposition of a Lien
other than a Permitted Encumbrance of the type described in paragraphs (i)
through (x) in the definition of Permitted Encumbrances in Section 1.1 or the
posting of a bond or other security under ERISA or the Code, or (z) incurred any
liability under Title IV of ERISA, other than a liability to the PBGC for
premiums under Section 4007 of ERISA, which could in any case have a Material
Adverse Effect. No Prohibited Transaction and no Reportable Event has occurred
with respect to any such Plan within the past five (5) years which could have a
Material Adverse Effect. The execution, delivery and performance of this
Agreement does not constitute a Prohibited Transaction. Except as disclosed in
Schedule 2.1.22, there is no material unfunded benefit liability with respect to
any Plan of the Borrower or its ERISA Affiliates which could have a Material
Adverse Effect. Except to the extent required under Section 4980B of the Code
and for a US$5,000 payment made upon the death of a retired employee, no Plan
provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of the Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates.
2.1.23 the Borrower will use the proceeds of the Advances only for the
purposes permitted under Sections 3.1 and 3.2. No part of the proceeds of any
Advance will be used by the Borrower in violation of Regulation G, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal Reserve
System;
2.1.24 the aggregate Tangible Net Worth of the Excluded Subsidiaries
does not exceed C$50,000,000;
2.1.25 the Borrower has delivered to Lenders complete and correct
copies of each Related Agreement and of all exhibits and schedules thereto;
2.1.26 subject to the qualifications set forth therein, each of the
representations and warranties given by the Borrower and Merger Sub in the
Merger Agreement is true and correct in all material respects as of the date
hereof (or as of any earlier date to which such representation and warranty
specifically relates) and will be true and correct in all material respects as
of the Initial Funding Date (or such earlier date as the case may be), and to
the Borrower's actual knowledge, each representation and warranty made by Target
in the Merger Agreement is true and correct as of the date hereof (or as of any
earlier date to which such representation or warranty specifically relates) and
will be true and correct as of the Initial Funding Date;
2.1.27 notwithstanding anything in the Merger Agreement to the
contrary, the representations and warranties of the Borrower set forth in
subsection 2.1.26 shall, solely for purposes of this Agreement, survive the
Initial Funding Date for the benefit of Lenders; and
2.1.28 the Tender Offer Materials and other information furnished by
any Loan Party to any Agent or any Lender for purposes of or in connection with
this Agreement or any transaction contemplated hereby (including any such
information contained in the Confidential Information Memorandum with respect to
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the credit facilities created hereunder, the Form F-4 that was submitted to the
Securities and Exchange Commission on a confidential basis on March 6, 1998 and
any information contained in any filings made by the Borrower after the date
which is one year prior to the Closing Date with the Securities and Exchange
Commission which are publicly available), taken as a whole, as of the date of
preparation thereof, do not contain any untrue statement of a material fact or
omits to state a material fact (known to any Loan Party, in the case of any
document not furnished by it) necessary in order to make the statements
contained therein not misleading in light of the circumstances in which the same
were made. Any projections and pro forma financial information contained in the
Financial Projections and the Pro Forma Closing Balance Sheet are based upon
good faith estimates and assumptions believed by the Borrower to be reasonable
at the time made, it being recognized by Lenders that such projections as to
future events are not to be viewed as facts and that actual results during the
period or periods covered by any such projections may differ from the projected
results. As of the date hereof, there are no facts known (or which should upon
the reasonable exercise of diligence be known) to any Loan Party (other than
matters of a general economic nature) that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect and that
have not been disclosed herein or in other documents, certificates and
statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
2.2 Survival of Representations and Warranties
The representations and warranties herein set forth or contained in any
certificates or documents delivered to the Administrative Agent or the Lenders
pursuant hereto shall not be prejudiced by and shall survive any accommodation
hereunder and shall continue in full force and effect until the full payment and
performance of all obligations of the Borrower and the Guarantors hereunder or
pursuant hereto. The representations and warranties in Section 2.1, except for
Section 2.1.3 and Sections 2.1.14, 2.1.21, 2.1.22, 2.1.26 and 2.1.27 and except
that clause (i) of Section 2.1.7 shall be read as if it referred to the most
recent financial statements of the Borrower delivered by the Borrower to the
Administrative Agent pursuant to Section 11.1.2 and the date in Section 2.1.17
shall be the last day of the most recent fiscal year for which the Borrower has
furnished its audited annual consolidated statements to the Administrative Agent
pursuant to Section 11.1.2, shall be deemed to be repeated upon each Drawdown
Date (other than a Drawdown Date on which there is no increase in the amount of
credit extended under this Agreement), on the date of each Bid Borrowing and on
the date each Money Market Loan is made.
ARTICLE 3
THE CREDIT
3.1 Term Loan Commitment; Use of Proceeds of Term Loans
3.1.1 Relying on each of the representations and warranties set out in
Article 2 and subject to the terms of this Agreement, each Lender severally and
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not jointly, agrees to make its Term Loan Commitment available to the Borrower
as term loans on the Initial Funding Date in USDollars by way of Canadian Base
Rate Advances or Libor Advances; provided that (a) a Lender shall have no
obligation to make any Term Loan if the amount thereof exceeds its then
Available Term Loan Commitment and (b) in no event shall the principal amount of
the Term Loans made to the Borrower exceed US$480,000,000.
3.1.2 The Borrower agrees to use the proceeds of the Term Loans,
together with other funds, solely as follows:
(i) to contribute the proceeds thereof, directly or indirectly, to the
capital of Merger Sub to provide the consideration for Merger Sub to
purchase the Tendered Target Shares, to pay or cause to be paid the
consideration for any shares of Target Common Stock that have been
converted into the right to receive a cash payment pursuant to the
Merger Agreement and to pay or cause to be paid the purchase price of
any other Target Common Stock purchased in any manner whatsoever, in an
aggregate amount not to exceed US$1,796,018,679.00;
(ii) to repay in full all Indebtedness outstanding under the Existing
Credit Agreements in an amount not to exceed US$30,000,000, together
with accrued and unpaid interest thereon and fees and expenses payable
in connection therewith; and
(iii) to pay or cause to be paid Transaction Costs.
3.2 Revolving Loan Commitment; Use of Proceeds of Revolving Loans
3.2.1 Relying on each of the representations and warranties set out in
Article 2 and subject to the terms of this Agreement, each Lender severally and
not jointly, agrees to make its Revolving Loan Commitment available to the
Borrower on a revolving basis, during the period from the Initial Funding Date
until the Revolving Loan Commitment Termination Date applicable to such Lender:
(i) in CDollars by way of Canadian Rate Advances or Bankers'
Acceptances or, as the case may be, BA Equivalent Advances, or Letters
of Credit in accordance with Article 7; or
(ii) in USDollars by way of Canadian Base Rate Advances or Libor
Advances or Letters of Credit in accordance with Article 7.
; provided that (a) a Lender shall have no obligation to make any Advance under
this Section 3.2.1 if the amount thereof exceeds its then Available Revolving
Loan Commitment and (b) in no event shall the Total Utilization of Revolving
Loan Commitments exceed the aggregate Revolving Loan Commitments of all Lenders;
and provided further, that the Revolving Loan Commitment of a Lender shall be
deemed used from time to time to the extent of the aggregate amount of the Money
Market Loans then outstanding owed to such Lender, and such deemed
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use of such Lender's Revolving Loan Commitment shall be applied to reduce the
amount of Advances available from such Lender (such deemed use of such Lender's
Revolving Loan Commitment being a "Money Market Reduction"). No Advance shall be
required to be made by a Lender if, after giving effect to each applicable Money
Market Reduction in effect immediately prior to such Advance (and to the
application of the proceeds of such Advance), the aggregate Advances of any
Lender would exceed the amount permitted by the prior sentence.
3.2.2 The Borrower agrees to use the proceeds of the Revolving Loans,
together with other funds, solely as follows:
(i) to contribute the proceeds thereof, directly or indirectly, to the
capital of Merger Sub to provide the consideration for Merger Sub to
purchase the Tendered Target Shares, to pay or cause to be paid the
consideration for any shares of Target Common Stock that have been
converted into the right to receive a cash payment pursuant to the
Merger Agreement and to pay or cause to be paid the purchase price of
any other Target Common Stock purchased in any manner whatsoever, in an
aggregate amount not to exceed US$1,796,018,679.00;
(ii) to repay in full all Indebtedness outstanding under the Existing
Credit Agreements in an amount not to exceed US$30,000,000, together
with accrued and unpaid interest thereon and fees and expenses payable
in connection therewith;
(iii) to pay or cause to be paid Transaction Costs; and
(iv) for general corporate purposes including, without limitation,
commercial paper backstop.
3.3 Direct Advances
3.3.1 Term Loans. Subject to the terms and conditions hereof, upon
giving to the Administrative Agent prior written notice in accordance with
Section 3.6 by means of a Notice of Borrowing, the Borrower may borrow on the
Initial Funding Date from each Lender up to the amount of its Available Term
Loan Commitment in USDollars by way of Libor Advances and Canadian Base Rate
Advances in a minimum amount of ten million USDollars (US$10,000,- 000) or such
larger amount as is an integral multiple of one million USDollars (US$1,000,000)
(or the remaining balance of the Available Term Loan Commitment, if less than
such amount), provided that in no event shall the principal amount of the Term
Loans made to the Borrower exceed US$480,000,000. In each Notice of Borrowing in
which the Borrower has elected to pay interest at a margin or margins relative
to LIBOR on all or part of the Borrowing, the Borrower shall specify the
duration it selects for the initial Interest Period with respect to such Libor
Loan Portion in accordance with Section 5.5. Each Notice of Borrowing shall be
irrevocable and binding on the Borrower. The Drawdown Date for the Term Loans
shall be the Initial Funding Date, which shall be a Business Day. The Borrower
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may make only one Borrowing under the Term Loan Commitments. Amounts borrowed
under this Section 3.3.1 and subsequently repaid or prepaid may not be
reborrowed.
3.3.2 Revolving Loans. Subject to the terms and conditions hereof, from
time to time during the period from the Initial Funding Date until the Revolving
Loan Commitment Termination Date, upon giving to the Administrative Agent prior
written notice in accordance with Section 3.6 by means of a Notice of Borrowing,
the Borrower may from time to time borrow from each Lender up to the amount of
its Available Revolving Loan Commitment by way of Bankers' Acceptances (or as
the case may be, BA Equivalent Advances), Canadian Rate Advances, Canadian Base
Rate Advances or Libor Advances in a minimum amount of ten million CDollars
(C$10,000,000) or ten million USDollars (US$10,000,000) or such larger amount as
is an integral multiple of one million CDollars (C$1,000,000) or one million
USDollars (US$1,000,000) respectively (or the remaining balance of the Available
Revolving Loan Commitment, if less than such amount), provided that in no event
shall the Total Utilization of Revolving Loan Commitments (after giving effect
to any Money Market Reduction) in respect of the Borrower exceed the aggregate
Revolving Loan Commitments of all Lenders. In each Notice of Borrowing in which
the Borrower has elected to pay interest at a margin or margins relative to
LIBOR on all or part of the Borrowing, the Borrower shall specify the duration
it selects for the initial Interest Period with respect to such Libor Loan
Portion in accordance with Section 5.5. In each Notice of Borrowing in which the
Borrower has elected Bankers' Acceptances, the Borrower shall specify the
maturity date for such Bankers' Acceptances in accordance with Section 6.1.3.
Each Notice of Borrowing shall be irrevocable and binding on the Borrower. In
all cases the Drawdown Date shall be a Business Day. Within the limits of each
Lender's Revolving Loan Commitment, the Borrower may borrow under this Section
3.3.2, repay pursuant to Section 4.2 and reborrow under this Section 3.3.2.
3.4 Bid Advances
3.4.1 Each Lender severally agrees that the Borrower may make Bid
Borrowings under this Section 3.4 from time to time on any Business Day during
the period from the Initial Funding Date until the date occurring one (1) month
(or, in the case of Fixed Rate Advances, thirty (30) days) prior to the
Revolving Loan Commitment Termination Date in the manner set forth below;
provided that (i) no Bid Borrowing may be requested or made until such time as
US$1,700,000,000 in original aggregate principal amount of Advances, US Term
Loans and US Revolving Loans have been made under this Agreement and the US
Credit Agreement and (ii) following the making of each Bid Borrowing, the Total
Utilization of Revolving Loan Commitments (after giving effect to any Money
Market Reduction) shall not exceed the aggregate Revolving Loan Commitments of
all Lenders.
(i) The Borrower may request a Bid Borrowing under this
Section 3.4 by delivering to the Administrative Agent, by telecopier,
confirmed immediately in writing, not later than 10:00 a.m. (Montreal
time) (A) at least three (3) Business Days prior to the date of the
proposed Bid Borrowing, if the Borrower selects a Fixed Rate Advance,
or (B) at least four (4) Business Days prior to the date of the
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proposed Bid Borrowing, if the Borrower selects a Libor Advance, a
notice of a Bid Borrowing (a "Notice of Bid Borrowings"), in
substantially the form of Schedule 3.4.1, specifying therein if the
Borrower selects a Fixed Rate Advance or a Libor Advance, the date and
aggregate amount of the proposed Bid Borrowing, the maturity date for
repayment of each Bid Advance to be made as part of such Bid Borrowing
(which maturity date may not be earlier than the date occurring one (1)
month (or, in the case of Fixed Rate Advances, thirty (30) days) after
the date of such Bid Borrowing or, in any case, may not be later than
one hundred and eighty (180) days after the date of such Bid Borrowing,
or, if earlier, the Revolving Loan Commitment Termination Date), the
interest payment date or dates relating thereto, the right, if any, to
prepay any principal amount of any Bid Advance to be made a part of
such Bid Borrowing on such terms as the Borrower shall therein specify,
and any other terms to be applicable to such Bid Borrowing. The
Administrative Agent shall in turn promptly notify each Lender of each
request for a Bid Borrowing received by it from the Borrower by sending
such Lender a copy of the related Notice of Bid Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects to
do so, irrevocably offer to make one or more Bid Advances to the
Borrower as part of such proposed Bid Borrowing at a fixed rate or
rates, or a margin or margins relative to LIBOR, as requested by the
Borrower, by notifying the Administrative Agent via telecopier (which
shall give prompt notice thereof to the Borrower), (A) after 9:00 a.m.
but before 9:30 a.m. (Montreal time) on the date of such proposed Bid
Borrowing, in the case of a Notice of Bid Borrowing for a Fixed Rate
Advance and (B) after 1:30 p.m. but before 2:00 p.m. (Montreal time)
three (3) Business Days before the date of such proposed Bid Borrowing,
in the case of a Notice of Bid Borrowing for a Libor Advance, of the
minimum amount (which amount shall be not less than C$1,000,000 for Bid
Advances in C$ and not less than US$1,000,000 for Bid Advances in US$)
and maximum amount of each Bid Advance which such Lender would be
willing to make as part of such proposed Bid Borrowing (which amounts
may, subject to the proviso to the first sentence of Section 3.4.1,
exceed such Lender's Revolving Loan Commitment), the fixed rate or
rates, or a margin or margins relative to LIBOR, as requested by the
Borrower, which such Lender would be willing to accept for such Bid
Advance and such Lender's Applicable Lending Office with respect to
such Bid Advance; provided that if the Administrative Agent in its
capacity as a Lender shall, in its sole discretion, elect to make any
such offer, it shall notify the Borrower of such offer by 9:00 a.m.
(Montreal time) on the date of such proposed Bid Borrowing, in the case
of a Notice of Bid Borrowing for a Fixed Rate Advance and by 1:30 p.m.
(Montreal time) three (3) Business Days before the date of such
proposed Bid Borrowing, in the case of a Notice of Bid Borrowing for a
Libor Advance. In the event that the Administrative Agent does not
receive a notice from a Lender making an offer for a Bid Advance by the
applicable time set out above in this paragraph (ii), such Lender shall
be deemed for all purposes to have elected not to make such an offer.
The failure by any Lender to give such notice shall not cause such
Lender to be obligated to make any Bid Advance as part of such proposed
Bid Borrowing.
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(iii) The Borrower shall, in turn, (A) before 10:30 a.m.
(Montreal time) on the date of such proposed Bid Borrowing, in the case
of a Notice of Bid Borrowing for a Fixed Rate Advance and (B) before
3:00 p.m. (Montreal time) three (3) Business Days before the date of
such proposed Bid Borrowing, in the case of a Notice of Bid Borrowing
for a Libor Advance, either:
(1) cancel such Bid Borrowing by giving the Administrative
Agent notice to that effect, or
(2) accept one or more of the offers made by any Lender or
Lenders pursuant to paragraph (ii) above, in its sole
discretion, by giving notice to the Administrative Agent of
the amount of each Bid Advance (which amount shall be equal to
or greater than the minimum amount, and equal to or less than
the maximum amount, notified to the Borrower by the
Administrative Agent on behalf of such Lender for such Bid
Advance pursuant to paragraph (ii) above) to be made by each
Lender as part of such Bid Borrowing, and reject any remaining
offers made by Lenders pursuant to paragraph (ii) above by
giving the Administrative Agent notice to that effect.
The acceptance of offers by the Borrower pursuant to clause (2) of this
paragraph (iii) shall be on the basis of ascending rates of interest or
margins contained in the offers made by the Lenders pursuant to
paragraph (ii) above; provided that, in the event that two or more of
such offers contain the same rate of interest or margin for a greater
aggregate principal amount than the amount specified in such Notice of
Bid Borrowing less the aggregate principal amount of all such offers
containing lower rates of interest that have been accepted by the
Borrower pursuant to clause (2) of this paragraph (iii), the Borrower
shall accept such offers at such rate of interest or margin in amounts
allocated among the Lenders which made such offers pro rata according
to the amounts so offered (or as nearly pro rata as shall be
practicable after giving effect to the requirement that Bid Advances
made in connection with a Bid Borrowing shall be a minimum amount of
C$1,000,000 for Bid Advances in C$ and a minimum amount of US$1,000,000
for Bid Advances in US$).
(iv) If the Borrower notifies the Administrative Agent that
such Bid Borrowing is cancelled pursuant to clause (1) of paragraph
(iii) above, the Administrative Agent shall give prompt notice thereof
to the Lenders and such Bid Borrowing shall not be made.
(v) If the Borrower accepts one or more of the offers made by
any Lender or Lenders pursuant to clause (2) of paragraph (iii) above,
the Administrative Agent shall in turn on the date of such acceptance
notify (A) each Lender that has made an offer as described in paragraph
(ii) above of the date and aggregate amount of such Bid Borrowing and
whether or not any offer or offers made by such Lender pursuant to
paragraph (ii) above have been accepted by the Borrower, (B) each
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Lender that is to make a Bid Advance as part of such Bid Borrowing of
the amount of each Bid Advance to be made by such Lender as part of
such Bid Borrowing, and (C) each Lender that is to make a Bid Advance
as part of such Bid Borrowing, upon receipt, that the Administrative
Agent has received forms of documents appearing to fulfill the
applicable conditions set forth in Article 10.
(vi) Each Lender that is to make a Bid Advance as part of such
Bid Borrowing shall, before 12:00 noon (Montreal time) on the date of
such Bid Borrowing specified in the notice received from the
Administrative Agent pursuant to clause (B) of the preceding paragraph
(v) or any later time when such Lender shall have received notice from
the Administrative Agent pursuant to clause (C) of the preceding
paragraph (v), make available for the account of its Applicable Lending
Office such Lender's ratable portion of such Bid Borrowing by
depositing such portion in same day funds in the Administrative Agent's
account specified in Section 9.1. Upon fulfillment of the applicable
conditions set forth in Article 10, the Administrative Agent will
promptly make available to the Borrower at the Administrative Agent's
aforesaid address such funds as shall have actually been received by
the Administrative Agent. Promptly after each Bid Borrowing, the
Administrative Agent will notify each Lender of the amount of the Bid
Borrowing.
3.4.2 Each Bid Borrowing shall be in an aggregate amount of not less
than C$10,000,000 or US$10,000,000 or an integral multiple of C$1,000,000 or
US$1,000,000 respectively in excess thereof. Following the making of each Bid
Borrowing (and the application of the proceeds thereof), the Borrower agrees
that it shall be in compliance with the limitations set forth in the proviso to
the first sentence of Section 3.4.1. Except as otherwise provided in this
Section 3.4, the provisions of this Agreement dealing with Libor Loans shall
apply, mutatis mutandis, to Bid Borrowings at margins relative to LIBOR.
3.4.3 Within the limits and on the conditions set forth in this Section
3.4, the Borrower may from time to time borrow under this Section 3.4, repay or
prepay pursuant to Section 3.4.4, and re-borrow under this Section 3.4; provided
that a Bid Borrowing shall not be made within four Business Days of the date
that any other Bid Borrowing is made.
3.4.4 The Borrower shall repay to the Administrative Agent for the
account of each Lender which has made a Bid Advance, on the maturity date of
each Bid Advance (such maturity date being that specified by the Borrower for
repayment of such Bid Advance in the related Notice of Bid Borrowing delivered
pursuant to Section 3.4.1(i)), the then unpaid principal amount of such Bid
Advance. The Borrower shall have no right to prepay any principal amount of any
Bid Advance except on the terms specified for prepayment by the Borrower for
such Bid Advance in the related Notice of Bid Borrowing delivered pursuant to
Section 3.4.1(i) or otherwise with the consent of the Lender that has made the
relevant Bid Advance.
3.4.5 The Borrower shall pay interest on the unpaid principal amount of
each Bid Advance from the date of such Bid Advance to the date the principal
amount of such Bid Advance is repaid in full, at the rate of interest for such
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Bid Advance specified by the Lender making such Bid Advance in its notice with
respect thereto delivered pursuant to Section 3.4.1(ii), payable on the interest
payment date or dates specified by the Borrower for such Bid Advance in the
related Notice of Bid Borrowing delivered pursuant to Section 3.4.1(i).
3.5 Money Market Loans
3.5.1 The Borrower may at any time and from time to time request any
one or more of the Lenders to make offers to make Money Market Loans to the
Borrower on any Business Day during the period from the date hereof until the
Revolving Loan Commitment Termination Date in the manner set forth below. Each
such Lender may, but shall have no obligation to, make such offer, and the
Borrower may, but shall have no obligation to, accept any such offers in the
manner set forth in this Section 3.5.
3.5.2 In the event that the Borrower desires to borrow a Money Market
Loan from a Lender, the Borrower shall, prior to 11:00 a.m. (Montreal time),
request that such Lender provide a quotation to the Borrower of the amount and
terms under which such Lender would be willing to provide such Money Market
Loan. Each Money Market Loan shall be in CDollars or USDollars and if in
CDollars, in an amount of not less than C$1,000,000 or on integral multiple of
C$1,000,000 in excess thereof, and if in USDollars, in an amount of not less
than US$1,000,000 or an integral multiple of US$1,000,000 in excess thereof.
3.5.3 In the event that the Borrower elects to accept a Lender's offer
for a Money Market Loan, the Borrower shall provide telephonic notice to such
Lender of its election in a timely manner after the time that such offer was
received by the Borrower. The failure of the Borrower to provide such notice of
acceptance in a timely manner shall be deemed to constitute a rejection of the
offer of such Lender. Any Money Market Loan to be made by a Lender pursuant to
this Section 3.5 shall be made by the Lender crediting an account specified by
the Borrower with the amount of such advance in same day funds in accordance
with the terms agreed upon for such Money Market Loan following receipt of the
Borrower's timely acceptance of the offer of such Lender with respect to such
Money Market Loan.
3.5.4 The Borrower agrees to forward to the Lender with respect to a
Money Market Loan written evidence of such Money Market Loan by providing, on
the date upon which such Money Market Loan is made, documents, in form and
substance acceptable to both the Borrower and such Lender, executed and
delivered by a duly authorized officer of the Borrower, confirming the amount so
borrowed, the rate of interest applicable thereto and the maturity thereof (with
such Money Market Loan being due and payable on such date of maturity); provided
that the failure of the Borrower to provide such documents shall not impair the
obligation of the Borrower to repay any Money Market Loan borrowed by it. All
borrowings pursuant to this Section 3.5 shall bear interest at the rate quoted
to the Borrower by the relevant Lender in its quotation described in Section
3.5.2.
3.5.5 In the event that all amounts then owing under this Agreement
become due and payable prior to their scheduled maturity, each Lender that has a
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Money Market Loan outstanding may declare its Money Market Loans (with any
applicable interest thereon) to be immediately due and payable without the
consent of, or notice to, any other Lender; provided that if such event is an
Event of Default specified in Section 12.1.11, each Lender's Money Market Loans
(and any applicable interest thereon) shall automatically become immediately due
and payable.
3.5.6 The Borrower and any Lender may at any time and from time to time
enter into written agreements that provide for procedures for soliciting and
extending Money Market Loans that differ from those specified in Sections 3.5.2
to 3.5.5, inclusive. As between the Borrower and such Lender such agreements
shall supersede the provisions of such sections to the extent specified therein.
3.5.7 In the event that the availability under any Lender's Revolving
Loan Commitment (after giving effect to any applicable Money Market Reduction)
has been reduced to a level that is insufficient to permit such Lender to lend
its ratable share of any Borrowing requested to be made hereunder, the Borrower
shall repay such Lender's outstanding Money Market Loans simultaneously with or
prior to such Borrowing (which repayment may be financed with proceeds of such
Advances and shall be subject to the provisions of Section 3.5.8) by the amount
necessary to increase the availability under its Revolving Loan Commitment
(before giving effect to such Borrowing, but after giving effect to the
application of the proceeds thereof and to any Money Market Reduction in effect
after such application) to be at least equal to its ratable share of any such
Borrowing.
3.5.8 Notwithstanding anything to the contrary contained herein, the
following provision shall apply to all Money Market Loans unless expressly
otherwise excluded in the terms thereof. If any payment of principal of any
Money Market Loan is made other than on the maturity date of such Money Market
Loan, as a result of the acceleration of the maturity thereof pursuant to
Section 3.5.5 or for any other reason whatsoever, the Borrower shall, upon
demand by the applicable Lender (with a copy of such demand to the
Administrative Agent), pay directly to such Lender as it may direct any amounts
required to compensate such Lender for any losses, costs or expenses which it
may reasonably incur as a result of such payment, including, without limitation,
any loss, cost or expense incurred by reason of the liquidation or redeployment
of deposits or other funds acquired by such Lender to fund or maintain such
Money Market Loan.
3.5.9 Notwithstanding anything to the contrary contained herein, Money
Market Loans shall be deemed not to be extensions of credit, Advances or
Borrowings under this Agreement; provided that Money Market Loans shall be
considered to be extensions of credit under this Agreement for purposes of
calculating the Money Market Reduction.
3.5.10 Notwithstanding anything to the contrary contained herein, the
Administrative Agent shall have no responsibility whatsoever for Money Market
Loans, either before or after default hereunder or thereunder, including,
without limitation, for establishing the terms thereof, declaring defaults
thereunder, monitoring compliance by the Borrower therewith or verifying
payments or repayments thereunder, and to the extent that any Lender
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entering into a Money Market Loan requires any additional documentation in
connection therewith, such documentation shall be entirely the responsibility of
such Lender, including without limitation the preparation, execution, delivery
and safe-keeping thereof.
3.5.11 Unless the Borrower shall have previously given the
Administrative Agent written notice of all then outstanding (or committed to be
advanced on or prior to the Business Day of the proposed Borrowing) Money Market
Loans (which notice shall be in writing and shall specify the applicable Lender
which had advanced a Money Market Loan, the principal amount thereof and the
borrowing date and scheduled repayment date thereof), each Notice of Borrowing
or Notice of Bid Borrowing, as the case may be, given hereunder shall also
specify such information.
3.6 Notice Provisions
3.6.1 For each Borrowing, each optional repayment and each conversion,
the Administrative Agent shall have received prior to 11:00 a.m (Montreal time)
from the Borrower in writing a Notice of Borrowing, a Notice of Optional
Repayment or a Notice of Conversion, as the case may be, in accordance with the
following:
(a) at least one (1) Business Day prior to the Drawdown Date or
Conversion Date, as the case may be, for each Borrowing or conversion by way of
Canadian Rate Advance or Canadian Base Rate Advance;
(b) at least two (2) Business Days prior to the Drawdown Date or
Conversion Date, as the case may be, for each Borrowing or conversion by way of
Acceptance;
(c) at least three (3) Business Days prior to the Drawdown Date or
Conversion Date, as the case may be, for each Borrowing or conversion by way of
Libor Advance (provided, however, that with respect to Libor Advances to be made
on the Initial Funding Date, the Borrower shall be required to deliver the
relevant Notice of Borrowing no later than 9:00 a.m. (Montreal time) two (2)
Business Days prior to the Initial Funding Date); and
(d) at least three (3) Business Days prior to the Optional Repayment
Date for each optional repayment.
3.6.2 If the Borrower gives a Notice of Borrowing to the Administrative
Agent in accordance with Section 3.6.1, the Administrative Agent shall on the
same day it receives such Notice of Borrowing notify each Lender by telecopier
of the particulars of such request for a Borrowing and of such Lender's
Participation in the proposed Borrowing and each Lender shall, no later than
2:00 p.m. (Montreal time) on the Drawdown Date, make or procure to be made its
Participation in the Borrowing available to the Administrative Agent.
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3.7 Pro Rata Treatment
Except in respect of Bid Loans, the Borrower agrees to request each
Borrowing from the Lenders pro rata in all respects according to their
respective Commitments and the Lenders agree to make each Borrowing available to
the Borrower pro rata in all respects according to their respective Commitments.
A Lender shall not be responsible for the Commitments of any other Lender.
Without prejudice to the rights of the Borrower against a defaulting Lender, the
failure or incapacity of a Lender to make available its Participation in a
Borrowing to the Borrower in accordance with its obligations under this
Agreement does not release the other Lenders from their obligations.
3.8 Accounts kept by the Administrative Agent
The Administrative Agent shall keep in its books, accounts for the Loan
and other amounts payable by the Borrower under this Agreement. The
Administrative Agent shall keep appropriate registers showing, the amount of the
indebtedness of the Borrower in respect of the Loan and showing each payment or
repayment of principal and interest made in respect of such indebtedness. Such
registers shall constitute (in the absence of manifest error) prima facie
evidence of their content against the Borrower, the Guarantors and the Lenders;
provided that the obligation of the Borrower and the Guarantors to pay or repay
any indebtedness and liability in accordance with the terms and conditions of
this Agreement shall not be affected by the failure of the Administrative Agent
to keep such registers. The Administrative Agent shall supply any Lender and the
Borrower, on demand, with copies of such registers.
3.9 Accounts kept by each Lender
Each Lender shall keep in its books, in respect of its Participation,
accounts for the Loan, any Bid Loans and Money Market Loans made by it, and
other amounts payable by the Borrower to it under this Agreement. Each Lender
shall make appropriate entries showing, as debits, the amount of the
indebtedness of the Borrower towards it in respect of the Loan, any such Bid
Loan or Money Market Loan, the amount of all accrued interest and any other
amount due to such Lender pursuant hereto and, as credits, each payment or
repayment of principal and interest made in respect of such indebtedness as well
as other amount paid to such Lender pursuant hereto. These accounts shall
constitute (in the absence of manifest error or of contradictory entries in the
accounts of the Administrative Agent referred in Section 3.8) prima facie
evidence of their content against the Borrower and the Guarantors.
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ARTICLE 4
REPAYMENT, CONVERSION AND REDUCTION
4.1 Mandatory Repayment and Prepayment of the Loan
4.1.1 The Borrower covenants and agrees that it shall repay the Term
Loans made to it to the Administrative Agent for the account of the Lenders on
the Term Loan Maturity Date together with all unpaid interest accrued thereon or
owing pursuant thereto. The Borrower covenants and agrees that it shall repay
the Revolving Loans made to it to the Administrative Agent for the account of
the Lenders on the Revolving Loan Commitment Termination Date together with all
unpaid interest accrued and other amounts owing and unpaid hereunder or pursuant
hereto.
4.1.2 Grand Trunk and the Borrower further covenant and agree that, no
later than the fifth Business Day following the date of receipt by the Borrower
or any of its Subsidiaries of any Net Asset Sale Proceeds in respect of any
Asset Sale consummated prior to the STB Approval Date, Grand Trunk and the
Borrower shall, and Grand Trunk shall cause each borrower under the US Credit
Agreement to, subject to Section 4.1.3, prepay the Term Loans, the Revolving
Loans, the US Term Loans and the US Revolving Loans in an aggregate amount equal
to such Net Asset Sale Proceeds (rounded downwards to the next lowest multiple
of US$100,000); provided, however, that Grand Trunk and the Borrower shall not
be required to repay (or to cause each borrower under the US Credit Agreement to
repay, as the case may be) any such Net Asset Sale Proceeds until the aggregate
amount thereof not yet applied to the repayment of the Term Loans, Revolving
Loans, US Term Loans and US Revolving Loans pursuant to Section 4.1.3 exceeds
US$10,000,000, at which time Grand Trunk and the Borrower shall be obligated to
repay (or to cause each borrower under the US Credit Agreement to repay, as the
case may be) all such Net Asset Sale Proceeds in accordance with this Section as
if the Borrower and its Subsidiaries had received such amounts at such time;
provided that, if the amount of any prepayment to the Term Loans or Revolving
Loans to be made by the Borrower pursuant to this Section 4.1.2 exceeds the
aggregate principal amount of that portion of the Term Loans or Revolving Loans,
respectively, bearing interest at a rate determined by reference to the Canadian
Rate or the Canadian Base Rate, the Borrower shall place and maintain with the
Administrative Agent a deposit in the amount of such excess amount pending
application of such amounts on deposit (it being understood that the Borrower,
other than upon the occurrence and during the continuance of an Event of
Default, may direct the Administrative Agent to invest such amounts on deposit
in cash equivalents) from time to time as soon as practicable thereafter to
repay Term Loans or Revolving Loans, respectively, consisting of new Canadian
Rate Loans or Canadian Base Rate Loans or other Advances to the Borrower, which
application shall be made in a manner which does not require additional payments
by the Borrower pursuant to Section 9.9.4.
4.1.3 Any prepayments made pursuant to Section 4.1.2 shall be made
without premium or penalty and shall be applied first, to the prepayment of the
Term Loans and the US Term
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Loans pro rata according to the respective outstanding principal amount, if any,
of each and to the full extent thereof, and second, to the prepayment of the
Revolving Loans and the US Revolving Loans pro rata according to the respective
outstanding principal amount, if any, of each and to the full extent thereof;
provided that prepayments of the Revolving Loans shall not be required pursuant
to Section 4.1.2 or this Section 4.1.3 if on the date the relevant Net Asset
Sale Proceeds are received by the Borrower or any of its Subsidiaries (i) the
Borrower's Public Debt Rating by S&P is BBB or higher or the Borrower's Public
Debt Rating by Moody's is Baa2 or higher and (ii) the aggregate Revolving Loan
Commitments and the commitments under the US Credit Agreement to make US
Revolving Loans are not greater than US$700,000,000.
4.2 Optional Repayments
4.2.1 At any time prior to the Revolving Loan Commitment Termination
Date, subject to Section 4.4, the Borrower may elect to repay by a Notice of
Optional Repayment received by the Administrative Agent, and on the Optional
Repayment Date set forth therein the Borrower shall repay, to the Administrative
Agent for the account of the Lenders in CDollars or USDollars, as the case may
be, all or part of the Borrowings under the Credit with interest accrued thereon
to the date of such repayment. Within the limits of each Lender's Revolving Loan
Commitment and subject to the terms of this Agreement, the Borrower may reborrow
any Revolving Loans so repaid. Any optional repayments pursuant to this Section
4.2 shall be applied as specified by the Borrower in the applicable Notice of
Optional Prepayment; provided that in the event Borrower fails to specify the
Loans to which any such prepayment shall be applied, such prepayment shall be
applied first to repay outstanding Revolving Loans to the full extent thereof,
and applied pro rata in proportion to the amount of Revolving Loans made to the
Borrower, and second to repay outstanding Term Loans to the full extent thereof.
Notwithstanding anything in this Agreement to the contrary, the Borrower shall
not make any optional prepayment of all or a portion of the outstanding Term
Loans unless a ratable portion of the US Term Loans outstanding at the time of
such prepayment are also prepaid.
4.2.2 Subject to compliance with Section 4.2.1, prepayments may be made
without premium or penalty.
4.2.3 All optional repayments are in addition to and not in replacement
of mandatory repayments provided for in Section 4.1.1.
4.2.4 Notwithstanding the foregoing, a Borrowing outstanding by way of
Letter of Credit may only be repaid or discharged prior to the expiry date of
the Letter of Credit by:
(a) the Administrative Agent being fully released and discharged of all
its liabilities and obligations arising from such Letter of Credit and
by written evidence satisfactory to the Administrative Agent of such
full release and discharge being delivered to the Administrative Agent;
or
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(b) by way of the issue to the Administrative Agent by a financial
institution acceptable to the Administrative Agent, in its sole
discretion, of a full, unconditional counter-guarantee or indemnity in
favor of the Administrative Agent acceptable to the Administrative
Agent in respect of such Letter of Credit.
4.3 Conversion Option
4.3.1 At any time prior to the Term Loan Maturity Date or the Revolving
Loan Commitment Termination Date, respectively, subject to Section 4.4, the
Borrower may elect to convert by Notice of Conversion received by the
Administrative Agent, and on the Conversion Date set forth therein the Borrower
shall convert, any basis of funding (other than Letters of Credit) of all or any
portion of the Borrowings consisting of Term Loans and/or the Borrowings
consisting of Revolving Loans, respectively (each a "Converted Advance"), into
another basis of funding (each a "Conversion Advance"); provided that (i) the
Borrower may convert the basis of funding of any Borrowings only into another
basis that the Borrower is permitted to select for such Borrowings under Section
3.1 or 3.2, and (ii) the Borrower may not elect to convert a Borrowing
denominated in CDollars to USDollars or a Borrowing denominated in USDollars to
CDollars. The provisions of this Agreement relating to Libor Advances shall
apply mutatis mutandis to Conversion Advances comprising Libor Advances. The
provisions of this Agreement relating to Acceptances shall apply mutatis
mutandis to Conversion Advances comprising Acceptances.
4.3.2 If on any date an Advance is outstanding with respect to which
notice has not been delivered to the Administrative Agent specifying the
applicable basis for determining the rate of interest, then for that day that
Advance shall bear interest by reference to the Canadian Base Rate (in the case
of Advances to the Borrower other than Canadian Rate Advances) or the Canadian
Rate (in the case of Canadian Rate Advances).
4.4 Requirements for Optional Repayments and Optional Conversions
Each optional repayment pursuant to Section 4.2 or conversion pursuant
to Section 4.3 shall be subject to the following terms and conditions:
4.4.1 each repayment or conversion shall be in a minimum amount of
C$10,000,000 or US$10,000,000 or such larger amount as is an integral multiple
of C$1,000,000 or US$1,000,000 respectively (or, for repayments, the remaining
balance of the Borrowings if less than such minimum amount) in the currency of
the Borrowings or portion thereof to be repaid or of the Converted Advance, as
the case may be, and shall be made on a Business Day specified in the Notice of
Optional Repayment or Notice of Conversion;
4.4.2 the Borrower shall have given the Administrative Agent notice in
accordance with Section 3.6 for each repayment and each conversion, each notice
stating the proposed date of the repayment or conversion and either the
aggregate principal amount of the repayment or the aggregate principal amount of
the Converted Advance and the type of Conversion Advance;
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4.4.3 if a Notice of Optional Repayment is given, it shall be
irrevocable and binding on the Borrower and the Borrower shall repay on the
Optional Repayment Date specified in such notice in CDollars or USDollars, as
the case may be, the amount stated in such notice with accrued interest to the
date of such repayment; and if a Notice of Conversion is given it shall be
irrevocable and binding on the Borrower; and
4.4.4 should any such repayment or conversion result in the repayment
of or conversion from any Libor Loan Portion on a day other than the last day of
its then current Interest Period, the Borrower shall, in addition, pay to the
Administrative Agent the amount calculated as set forth in Section 9.9.4.
4.5 Excess Advances
The Equivalent Amount in USDollars of the aggregate outstanding amount
of the Canadian Rate Loan, all Letters of Credit outstanding in CDollars, the
face amount of all Bankers' Acceptances and BA Equivalent Advances, all Bid
Advances or Money Market Loans outstanding in CDollars and any other Advances
outstanding in CDollars shall be determined by the Administrative Agent (i) on
each Drawdown Date, (ii) on each Conversion Date, (iii) on the last day of each
month, unless a Drawdown Date or Conversion Date occurs in such month and (iv)
at such other times as may be reasonably decided by the Administrative Agent. In
the event that on such date of determination the Equivalent Amount in USDollars
of the aggregate outstanding amount of the Canadian Rate Loan, all Letters of
Credit outstanding in CDollars, the face amount of all Bankers' Acceptances and
BA Equivalent Advances, all Bid Advances or Money Market Loans outstanding in
CDollars and any other Advances outstanding in CDollars plus the aggregate Libor
Loan, the aggregate Canadian Base Rate Loan, all Letters of Credit outstanding
in USDollars, all Bid Advances or Money Market Loans outstanding in USDollars
and all other Advances outstanding in USDollars, exceeds the then Total
Commitment of the Lenders (the "Excess"), then the Borrower shall within three
(3) days after notice of the amount of the Excess pay to the Administrative
Agent for application to repayment of Advances to the Borrower the amount of the
Excess in USDollars or the Equivalent Amount in CDollars; provided that nothing
in this Section 4.5 shall operate to postpone any payment due on the Term Loan
Maturity Date or the Revolving Loan Commitment Termination Date. Such payments
shall be applied on the date of receipt by the Administrative Agent to the
repayment of all outstanding Advances and Bid Advances and Money Market Loans;
provided, that if, on the date any such payment of an Excess is to be so
applied, the Equivalent Amount in USDollars of the aggregate Canadian Rate Loan
and the Canadian Base Rate Loan is less than the Excess, the Borrower shall
apply such Excess first, to the repayment of the Canadian Rate Loan and the
Canadian Base Rate Loan to the full extent thereof, and then place and maintain
with the Administrative Agent an interest bearing deposit in the amount of the
remainder. The Administrative Agent shall apply such amounts on deposit
(together with the interest accrued thereon) from time to time as soon as
practicable thereafter to repay any new Canadian Rate Loan or Canadian Base Rate
Loan or other Advances to the Borrower, which repayment shall be made in a
manner which does not require additional payments by the Borrower pursuant to
Section 9.9.4.
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4.6 Authority to Debit
In respect of all amounts payable by the Borrower under this Agreement,
the Borrower hereby irrevocably authorizes and instructs the Administrative
Agent to withdraw from or debit, from time to time when such amounts are due and
payable, any account of the Borrower listed in Schedule 4.6 annexed hereto (as
such Schedule 4.6 may be amended from time to time as agreed between the
Borrower and the Administrative Agent) for the purpose of satisfying payment
thereof.
4.7 Reduction of the Commitments
4.7.1 The Borrower may, upon at least five (5) Business Days' notice to
the Administrative Agent, terminate in whole or reduce ratably in part (without
premium or penalty) the unused portions of the Commitments of the Lenders;
provided that each partial reduction shall be in the aggregate amount of
US$25,000,000 or an integral multiple of US$5,000,000 in excess of
US$25,000,000. In any such notice, the Borrower must state the proposed date and
aggregate principal amount of the reduction and, if such notice is given, the
Borrower shall pay the Administrative Agent in accordance with such notice the
amount, if any, by which the Total Utilization of Revolving Loan Commitments
(after giving effect to any Money Market Reduction) exceeds the proposed reduced
aggregate Revolving Loan Commitments and the Borrower shall pay at the same time
all interest and other amounts owing in respect of such excess amount accrued to
the date of such reduction. Should any such payment result in the payment of any
Libor Loan Portion on a day other than the last day of its then current interest
period, the Borrower shall, in addition, pay to the Administrative Agent for the
benefit of the applicable Lenders the amount calculated as set forth in Section
9.9.4.
4.7.2 On each date that the Revolving Loans are required to be prepaid
pursuant to Section 4.1.2, the Revolving Loan Commitments shall be permanently
reduced in the amount of such required prepayment.
4.8 Increase of Revolving Loan Commitment
The Borrower may, from time to time, request an increase of each
Lender's Revolving Loan Commitment by giving written notice to the
Administrative Agent making such request and specifying the date upon which the
Borrower requests that such increase come into effect (the "Effective Date") and
detailing the amount by which each Lender's Revolving Loan Commitment shall be
increased; such notice shall be given by the Borrower between the 90th and 60th
days prior to the Effective Date. The Administrative Agent shall promptly
forward a copy of such request to the Lenders and each Lender shall notify the
Administrative Agent within 30 days of the Borrower's request whether such
Lender is willing to grant such an increase. In the event that a Lender has
failed to notify the Administrative Agent within such 30 day period of whether
it has elected to increase its Revolving Loan Commitment, such Lender shall be
deemed not to have elected to increase its Revolving Loan Commitment. Each
increase request shall be considered by each Lender, in its sole discretion, and
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each Lender shall not, under any circumstances, be obliged to approve or accept
any increase request. The Administrative Agent shall promptly notify the
Borrower and the Lenders which Lenders have elected to increase their respective
Revolving Loan Commitments. In the event that a Lender elects to increase its
Revolving Loan Commitment then (regardless of whether any other Lender has
elected to so increase but provided there is no increase in the Total Commitment
unless all the Lenders and all lenders designated as "Lenders" under the US
Credit Agreement have agreed thereto) the Revolving Loan Commitment for such
Lender shall be increased by the amount of the increase requested by the
Borrower and agreed to by such Lender.
If a Lender elects or is deemed to have elected not to increase its
Revolving Loan Commitment, the Lenders who have elected to increase their
Revolving Loan Commitments shall have the option (all such Lenders who elect to
exercise such option being "Accepting Lenders") to take up on a pro rata basis
the dissenting Lenders' portion of the increase by so advising the
Administrative Agent. The Administrative Agent shall allocate amongst the
Accepting Lenders the amount of the Revolving Loan Commitment available from
each dissenting Lender in its discretion but always on a pro rata basis or as
nearly pro rata as shall be practical.
If the Accepting Lenders do not take up all of the dissenting Lenders'
portion of the increase (on a pro rata basis or otherwise), the Borrower may, at
its option (and at any time prior to or on the applicable Effective Date) offer
such portion to one or more financial institutions, provided that such other
financial institutions are acceptable to the Administrative Agent and provided
such offer is consummated as soon as possible to the satisfaction of the
Administrative Agent. The provisions in Section 15.14 dealing with Dissenting
Lenders shall not apply to a dissenting Lender under this Section 4.8
ARTICLE 5
INTEREST AND FEES
5.1 Interest
The Borrowings shall bear interest from the date of each Advance,
calculated on a daily basis and payable in arrears, on the Canadian Rate Loan at
the Canadian Rate, on the Canadian Base Rate Loan at the Canadian Base Rate, and
on each Libor Loan Portion at LIBOR plus the Applicable Margin in effect from
time to time for such Libor Loan Portion for the then current Interest Period,
and all overdue amounts shall bear interest in accordance with Section 5.6. All
outstanding amounts shall bear interest both before and after default and before
and after judgment at the rates determined as aforesaid.
5.2 Payment of Interest on Libor Loan
On each Interest Payment Date in respect of each Libor Loan Portion of
a Lender, the Borrower shall pay the Administrative Agent interest on such Libor
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Loan Portion at the rate per annum determined by the Administrative Agent to be
LIBOR in respect of such Libor Loan Portion for the applicable Interest Period
plus the Applicable Margin in effect from time to time during such Interest
Period. Upon determination of the applicable rate of interest on any Libor Loan
Portion, the Administrative Agent shall notify the Borrower of this rate. The
Administrative Agent will compute the interest on the basis of the actual number
of days elapsed in the period for which such interest is payable divided by
three hundred and sixty (360).
5.3 Payment of Interest on Canadian Rate Loan
On each Interest Payment Date in respect of the Canadian Rate Loan, the
Borrower shall pay the Administrative Agent interest on the Canadian Rate Loan
at the Canadian Rate. The Borrower will pay this interest in arrears for the
period up to but excluding such Interest Payment Date; the Administrative Agent
will compute the interest on the basis of the actual number of days elapsed in
the period for which such interest is payable divided by the actual number of
days of the year. Each change in the fluctuating interest rate for the Canadian
Rate Loan will take place simultaneously with the corresponding change in the
Canadian Rate.
5.4 Payment of Interest on Canadian Base Rate Loan
On each Interest Payment Date in respect of the Canadian Base Rate
Loan, the Borrower shall pay the Administrative Agent interest on the Canadian
Base Rate Loan at the Canadian Base Rate. The Borrower will pay this interest in
arrears for the period up to but excluding such Interest Payment Date; the
Administrative Agent will compute the interest on the basis of the actual number
of days elapsed in the period for which such interest is payable divided by the
actual number of days of the year. Each change in the fluctuating interest rate
for the Canadian Base Rate Loan will take place simultaneously with the
corresponding change in the Canadian Base Rate.
5.5 Selection of Interest Periods
In each Notice of Borrowing delivered pursuant to Section 3.3 and each
Notice of Conversion delivered pursuant to Section 4.3 in which the Borrower has
elected a Borrowing or Conversion Advance comprising a Libor Loan Portion and at
least three Business Days prior to the last day of each Interest Period in
respect of each Libor Loan Portion, the Borrower shall select and notify the
Administrative Agent of the Interest Period applicable to such Libor Loan
Portion commencing on the Drawdown Date, Conversion Date or last day of the
Interest Period, as the case may be, and ending on a Business Day, which period
shall be one (1) month, two (2) months, three (3) months, six (6) months or,
subject to availability, nine (9) months or twelve (12) months, as the Borrower
may elect; provided, however, that:
5.5.1 if the Borrower fails to so elect the duration of any Interest
Period, the amount of such Libor Loan Portion shall be deemed to be a Canadian
Base Rate Advance at the end of the current Interest Period and interest thereon
shall be payable at the Canadian Base Rate; and
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5.5.2 the amount in respect of which the Borrower selects an Interest
Period shall not be less than ten million USDollars (US$10,000,000) and in
integral multiples of one million USDollars (US$1,000,000) in excess thereof.
5.6 Default Interest
If the Borrower defaults in any payment of principal, interest or any
other amount due pursuant to this Agreement, the Borrower shall pay to the
Administrative Agent on demand interest on such overdue principal, overdue
interest and other overdue amount, from the date the amount is due until the
date it is paid in full, and all interest on overdue principal, all overdue
interest and all interest on overdue interest shall be compounded monthly, at
the rates per annum as follows:
5.6.1 with respect to the Libor Loan and any Libor Advance to the
Borrower, the Borrower shall be deemed to have elected that any amount of
principal of the Libor Loan or any Libor Loan Portion or Libor Advance which is
not paid when due shall thereupon cease to be a Libor Loan or Libor Advance and
shall be a Canadian Base Rate Advance, and the Borrower shall pay interest on
all such overdue principal and any overdue interest and interest on interest
thereon at a fluctuating rate per annum at all times equal to the Canadian Base
Rate plus two percent (2%) per annum; and
5.6.2 on overdue principal of, and overdue interest on, the Canadian
Rate Loan and on any other amounts owing in CDollars, at a fluctuating rate per
annum at all times equal to the Canadian Rate plus two percent (2%) per annum.
5.7 Determination of Interest Rates
5.7.1 Each Reference Lender, at the request of the Administrative
Agent, agrees to furnish to the Administrative Agent timely information for the
purpose of determining each Canadian Rate, each Acceptance Fee, each Canadian
Base Rate and each LIBOR. If any one or more of the Reference Lenders shall not
furnish such timely information to the Administrative Agent for the purpose of
determining any such interest rate or fee, the Administrative Agent shall
determine such interest rate or fee on the basis of timely information furnished
by the remaining Reference Lenders.
5.7.2 Each determination by the Administrative Agent from time to time
of the Canadian Rate, the Canadian Base Rate, LIBOR, the Applicable Margin and
the Acceptance Fee shall, in the absence of manifest error, be final, conclusive
and binding upon the Borrower, the Guarantors and the Lenders.
5.8 Acceptance Fee
If the Borrower notifies the Administrative Agent pursuant to Section
3.6 that a Borrowing is to be made by way of Bankers' Acceptances (or, as the
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case may be, BA Equivalent Advances), the Borrower shall pay in CDollars at or
prior to the time of the Acceptance of each Bankers' Acceptance an Acceptance
Fee on the face value of each Bankers' Acceptance accepted by a Lender. The
Acceptance Fee shall be computed on the basis of the actual number of days of
the Bankers' Acceptance divided by the actual number of days of the year.
5.9 Underwriting Fee
The Borrower shall pay to the Arrangers, for their own accounts, the
underwriting fees set forth in that certain letter agreement between the
Borrower and the Arrangers dated February 9, 1998, to the extent not paid prior
to the date hereof.
5.10 Facility Fee
The Borrower shall pay to the Administrative Agent, for the account of
each Lender, a facility fee from the Closing Date until the Revolving Loan
Commitment Termination Date on the sum of the amount of such Lender's Revolving
Loan Commitment (whether used or unused) and (x) until the Initial Funding Date,
such Lender's Term Loan Commitment and (y) on and after the Initial Funding
Date, the principal amount of such Lender's outstanding Term Loan at the rate
equal to the Facility Fee in effect from time to time during the period for
which such payment is made, payable in arrears on the last day of each March,
June, September and December, commencing on the first such day to occur after
the Closing Date and on the Revolving Loan Commitment Termination Date. The
Facility Fee shall accrue from day to day and be calculated on the basis of a
year of 365 (or 366 in a leap year) days for the actual number of days elapsed.
Under no circumstances shall such Facility Fee be refundable either in whole or
in part, even if no Advance is ever made under the terms hereof.
5.11 Administrative Fee
The Borrower shall pay to the Administrative Agent, for its account
exclusively, an annual administrative fee as agreed between the Borrower and the
Administrative Agent in a letter agreement dated February 6, 1998.
5.12 Certain Computations
5.12.1 All computations of interest shall be made by the Administrative
Agent taking into account the actual number of days occurring in the period for
which such interest is payable, and (i) with respect to the Canadian Rate or the
Canadian Base Rate, on the basis of a year of 365 or 366 days, as the case may
be, or (ii) with respect to LIBOR or any interest accruing on a Fixed Rate
Advance, on the basis of a year of 360 days.
5.12.2 For purposes of the Interest Act (Canada), (i) whenever any
interest or Fee under this Agreement is calculated using a rate based on a year
of 360 days, such rate determined pursuant to such calculation, when expressed
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as an annual rate, is equivalent to (x) the applicable rate based on a year of
360 days, (y) multiplied by the actual number of days in the calendar year in
which the period for which such interest or fee is payable (or compounded) ends,
and (z) divided by 360, (ii) the principle of deemed reinvestment of interest
does not apply to any interest calculation under this Agreement, and (iii) the
rates of interest stipulated in this Agreement are intended to be nominal rates
and not effective rates or yields.
ARTICLE 6
BANKERS' ACCEPTANCES
6.1 Bankers' Acceptances
Subject to the terms and conditions hereof, upon giving to the
Administrative Agent prior written notice in accordance with Section 3.6 hereof
by means of a Notice of Borrowing, on any Business Day the Borrower may borrow
from the Lenders up to the amount of the Available Revolving Loan Commitment by
way of Acceptances, provided that:
6.1.1 each Bankers' Acceptance is denominated in CDollars and the
minimum aggregate amount of each Borrowing by way of Bankers' Acceptances shall
be ten million CDollars (C$10,000,000) or in integral multiples of one million
CDollars (C$1,000,000) in excess of such minimum aggregate amount;
6.1.2 each Lender shall have received a Bankers' Acceptance or Bankers'
Acceptances in the aggregate principal amount of such Borrowing from such Lender
in due and proper form duly completed and executed by the Borrower and presented
for acceptance to such Lender prior to 10:00 a.m. (Montreal time) on the
Drawdown Date, together with such other document or documents as such Lender may
reasonably require (including the execution by the Borrower of such Lender's
usual form of Bankers' Acceptances) and the Acceptance Fee shall have been paid
to such Lender at or prior to such time;
6.1.3 each Bankers' Acceptance shall be stated to mature on a Business
Day, no later than the Revolving Loan Commitment Termination Date, which is
approximately thirty (30), sixty (60), ninety (90) or one hundred and eighty
(180) days or, subject to availability, periods in excess of 180 days from the
date of its acceptance;
6.1.4 each Bankers' Acceptance shall be stated to mature on a Business
Day in such a way that no Lender will be required to incur any costs for the
redeployment of funds as a consequence of a mandatory repayment under Section
4.1.1 during any period for which such Bankers' Acceptance is outstanding;
6.1.5 no days of grace shall be permitted on any Bankers' Acceptance;
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6.1.6 the aggregate face amount of the Bankers' Acceptances to be
accepted by a Lender shall be determined by the Administrative Agent by
reference to the respective Revolving Loan Commitments of the Lenders, except
that, if the face amount of a Bankers' Acceptance which would otherwise be
accepted by a Lender would not be C$100,000 or a whole multiple thereof, such
face amount shall be increased or reduced by the Administrative Agent in its
sole discretion to C$100,000 or the nearest whole multiple of that amount, as
appropriate.
6.2 Payments at Maturity
By no later than 10:00 a.m. (Montreal time) on the maturity date of
each Bankers' Acceptance, the Borrower shall pay to the Administrative Agent for
the account of each Lender an amount equal to the face value of each Bankers'
Acceptance accepted by such Lender maturing on that day (notwithstanding that a
Lender may be the holder thereof at maturity). If for any reason the Borrower
fails to make such payment in respect of any Bankers' Acceptance, the Borrower
shall be deemed for all purposes to have received on the maturity date of each
such Bankers' Acceptance a Canadian Rate Advance in an amount equal to the face
value of each such Bankers' Acceptance and the Borrower shall pay interest
thereon at the Canadian Rate until repayment thereof in full by the Borrower,
the whole notwithstanding the fact that any Bankers' Acceptances may be held by
a Lender in its own right at maturity. The Borrower and each of the Guarantors
acknowledge, agree and confirm with the Lenders that the records of each Lender
in respect of payment of any Bankers' Acceptance by such Lender shall be binding
on the Borrower and the Guarantors and shall be conclusive evidence (in the
absence of manifest error) of a Canadian Rate Advance to the Borrower and of an
amount owing by the Borrower to such Lender. The Borrower further agrees that if
an Event of Default shall occur prior to the date upon which any one or more
Bankers' Acceptances are payable by a Lender, thereupon, the Borrower shall
provide such Lender with funds for the full face amount of all such Bankers'
Acceptances, notwithstanding the fact that any such Bankers' Acceptance may be
held by such Lender in its own right at maturity; provided, however, that if for
any reason the Borrower fails to make such payment in respect of any Bankers'
Acceptance, thereupon the Borrower shall be deemed for all purposes to have
received a Canadian Rate Advance in an amount equal to the face amount of such
Bankers' Acceptance and the Borrower shall pay interest thereon at the Canadian
Rate until repayment thereof in full.
6.3 BA Equivalent Advances
In the event a Lender is unable to accept Bankers' Acceptances other
than under the circumstances set forth in Section 6.4, such Lender shall have
the right at the time of accepting drafts to require the Borrower to accept an
Advance in CDollars from such Lender in lieu of the issue and acceptance of a
Bankers' Acceptance requested by the Borrower to be accepted so that there shall
be outstanding while the Bankers' Acceptances are outstanding BA Equivalent
Advances from such Lender as contemplated herein. The principal amount of each
BA Equivalent Advance shall be that amount which, when added to the face amount
of interest (calculated at the applicable Discount Rate) which will accrue
during the BA Equivalent Interest Period shall be equal, at maturity, to the
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face amount of the drafts which would have been accepted by such Lender had it
accepted Bankers' Acceptances. The "BA Equivalent Interest Period" for each BA
Equivalent Advance shall be equal to the term of the drafts presented for
acceptance as Bankers' Acceptances on the relevant Drawdown Date.
On the relevant Drawdown Date the Borrower shall pay to the
Administrative Agent a fee equal to the Acceptance Fee which would have been
payable to such Lender if it were a Lender accepting drafts having a term to
maturity equal to the applicable BA Equivalent Interest Period and an aggregate
face amount equal to the sum of the principal amount of the BA Equivalent
Advance and the interest payable thereon by the Borrower for the Applicable BA
Equivalent Interest Period.
The provisions of this Agreement dealing with Bankers' Acceptances
shall apply, mutatis mutandis, to BA Equivalent Advances.
6.4 Circumstances Making Bankers' Acceptances Unavailable
If the Administrative Agent determines in good faith, which
determination shall be final, conclusive and binding upon the Borrower, and
notifies the Borrower that by reason of circumstances affecting the money
market, there is no market for Bankers' Acceptances, then:
(a) the right of the Borrower to request a Borrowing by way of a
Bankers' Acceptance shall be suspended until the Administrative Agent
determines that the circumstances causing such suspension no longer
exist and so notifies the Borrower;
(b) any Notice of Borrowing by way of Bankers' Acceptance which is
outstanding shall be cancelled and the Advance therein shall not be
made; and
(c) the Administrative Agent shall promptly notify the Borrower of the
suspension of the Borrower's right to request a Borrowing by way of
Bankers' Acceptance and of the termination of any such suspension.
6.5 Purchase of Bankers' Acceptances
Each Bankers' Acceptance issued pursuant to this Agreement shall be
purchased by the Lender accepting such Bankers' Acceptance for the Discounted
Proceeds thereof. In each case, upon receipt of such Discounted Proceeds from
the Lenders and upon fulfillment of the applicable conditions set forth in
Article 10, the Administrative Agent shall make such funds available to the
Borrower in accordance with this Agreement.
Upon each issue of Bankers' Acceptances as a result of the conversion
of outstanding Borrowings into Bankers' Acceptances, the Borrower shall,
concurrently with the conversion, pay in advance to the Administrative Agent on
behalf of the Lenders, the amount by which the face value of such Bankers'
Acceptances exceeds the Discounted Proceeds of such Bankers' Acceptances, to be
applied against the principal amount of the Borrowing being so converted.
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The Borrower shall at the same time pay to the Administrative Agent for
distribution to the applicable Lenders the applicable Acceptance Fee.
The Borrower acknowledges and agrees that each Lender may, at any time,
arrange for its Participant or Assignee to accept and purchase Bankers'
Acceptances hereunder. Any such acceptance by a Participant or Assignee shall be
deemed to be an Acceptance by such Lender for the purposes of this Agreement.
6.6 Pre-Signed Draft Forms
To enable the Lenders to make Advances in the manner specified in this
Article 6, the Borrower shall, in accordance with the request of each Lender
either (i) provide a power of attorney to complete, sign, endorse and issue
Bankers' Acceptances, in substantially the form of Schedule 6.6 annexed hereto,
or such other form as such Lender may reasonably require; or (ii) supply each
Lender with such number of drafts as such Lender may reasonably request, duly
endorsed and executed on behalf of the Borrower. Each Lender shall exercise such
care in the custody and safekeeping of drafts as it would exercise in the
custody and safekeeping of similar property owned by it. Each Lender will, upon
request by the Borrower, promptly advise the Borrower of the number and
designations, if any, of the uncompleted drafts then held by it.
ARTICLE 7
LETTERS OF CREDIT
7.1 Letter of Credit Commitment
Subject to the terms and conditions hereof, the Administrative Agent,
on behalf of the Lenders, and in reliance on the agreements of the Lenders set
forth in Section 7.2, agrees to issue for the account of the Borrower Letters of
Credit in CDollars or USDollars from time to time on any Business Day during the
period from the date hereof until the date occurring one month prior to the
Revolving Loan Commitment Termination Date; provided that (a) the Letter of
Credit Exposure shall not at any time exceed US$120,000,000, (b) the Borrower
shall not request the issuance of any Letter of Credit if, after giving effect
to such issuance, the Total Utilization of Revolving Loan Commitments (after
giving effect to any Money Market Reduction) would exceed the aggregate
Revolving Loan Commitments and (c) the Borrower shall not request the issuance
of, and the Administrative Agent shall not issue, any Letter of Credit having an
expiration date later than the Revolving Loan Commitment Termination Date.
7.2 Letter of Credit Participations
The Administrative Agent irrevocably grants, and in order to induce the
Administrative Agent to issue its Letters of Credit for the account of the
Borrower hereunder, each Lender irrevocably accepts and hereby purchases from
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the Administrative Agent, on the terms and conditions hereinafter stated, for
its own account and risk an undivided interest equal to such Lender's
Participation in the Administrative Agent's obligations and rights under each
Letter of Credit issued hereunder for the account of the Borrower and the amount
of each draft paid by the Administrative Agent thereunder. Each Lender
unconditionally and irrevocably agrees with the Administrative Agent that, on or
before the close of business of the Administrative Agent, on each day on which a
draft is paid under a Letter of Credit issued for the account of the Borrower
for which the Administrative Agent is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, including, without limitation,
pursuant to Section 7.8.1 (a "Lender Participation Date"), such Lender will pay
to the Administrative Agent for the account of the Administrative Agent at the
Administrative Agent's office specified in Section 9.1 such Lender's
Participation of any unpaid Reimbursement Obligation. The Administrative Agent
shall notify each Lender of the occurrence of a Lender Participation Date, and
the amount payable by it to the Administrative Agent based on such Lender's
Participation. Any such notice may be oral if promptly confirmed in writing
(including telecopy). If any Lender fails to make any such payment on or prior
to the first Business Day after such Lender receives notice as provided above,
then interest shall accrue on such Lender's obligation to make such payment
during the period from such Business Day to the day such Lender makes such
payment (or if earlier, the date on which the Borrower reimburses the
Administrative Agent for such unpaid Reimbursement Obligation) at the rate
specified in Section 15.6.2.
7.3 Repayment of Participants
Upon and only upon receipt by the Administrative Agent of funds from
the Borrower in full or partial reimbursement of any draft paid under a Letter
of Credit with respect to which any Lender has theretofore paid the
Administrative Agent for the account of the Administrative Agent in full for
such Lender's participation pursuant to Section 7.2 and in full or partial
payment of interest, commissions or fees on such draft paid under a Letter of
Credit, the Administrative Agent will pay to such Lender, in the same funds as
those received by the Administrative Agent, or net against any then due
obligation of such Lender under Section 7.2 to make any payment to the
Administrative Agent, such Lender's Participation of such funds.
7.4 Role of the Administrative Agent
The Administrative Agent will exercise and give the same care and
attention to each Letter of Credit as it gives to its other letters of credit
and similar obligations, and the Administrative Agent's sole liability to each
Lender shall be to distribute promptly, as and when received by the
Administrative Agent, each Lender's Participation of any payments made to the
Administrative Agent by the Borrower pursuant to Section 7.2. Each Lender agrees
that, in paying any drawing under a Letter of Credit, the Administrative Agent
shall not have any responsibility to obtain any document (other than as required
by such Letter of Credit) or to ascertain or inquire as to the validity or
accuracy of any such document or the authority of any Person delivering any such
document. Neither the Administrative Agent nor any of its representatives,
officers, employees or agents shall be liable to any Lender for (a) any action
taken or omitted to be taken in connection herewith at the request or with the
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approval of the Majority Lenders, (b) any action taken or omitted to be taken in
the absence of gross negligence or wilful misconduct, (c) any recitals,
statements, representations or warranties contained in any document distributed
to any Lender, (d) the creditworthiness of the Borrower, or (e) the execution,
effectiveness, genuineness, validity, or enforceability of any Letter of Credit,
or any other document contemplated thereby. The Administrative Agent shall not
incur any liability (i) by acting in reliance upon any notice, consent,
certificate, statement or other writing (which may be a bank wire, telex or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties or (ii) by acting as permitted under Section 7.14. The
obligations of the Lenders hereunder are several, and no Lender shall be liable
for the performance or non-performance of the obligations of any other Lender
under this Article 7.
7.5 Lenders' Obligations Absolute
Each Lender acknowledges that its obligations to the Administrative
Agent under this Article 7, including the obligation to purchase and fund a
participation in the obligations and rights of the Administrative Agent under
each Letter of Credit and any unpaid Reimbursement Obligation, is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, (i) the occurrence and continuance of an Event of
Default or an event which, with the giving of notice or the passage of time, or
both, would constitute an Event of Default, (ii) subject to the next sentence of
this Section 7.5, the fact that a condition precedent to the issuance of any
Letter of Credit was not in fact satisfied, (iii) any failure or inability of
any other Lender to purchase or fund such a participation hereunder, or (iv) any
other failure by any other Lender to fulfil its obligations hereunder. Without
affecting the rights and remedies of the Administrative Agent and the Lenders
with respect to the Borrower in the event of any such condition precedent is not
in fact satisfied, each Lender authorizes the Administrative Agent in its sole
discretion and on behalf of such Lender (but without obligating the
Administrative Agent), without further notice to such Lender so long as the
Administrative Agent shall have notified the Lenders two Business Days prior to
the day of issuance that such condition precedent is not or will not be
satisfied, to waive any condition precedent set forth in Article 10 to the
issuance of the Letter of Credit (or deem each such condition precedent
satisfied) in connection with each issuance of the Letters of Credit unless the
Administrative Agent shall have received by the close of its business, Montreal
time, on the Business Day immediately preceding the day of such issuance written
instructions from the Majority Lenders not to waive such condition precedent and
such written instructions have not been withdrawn by the Majority Lenders. Each
payment by a Lender to the Administrative Agent for its own account shall be
made, without any offset, compensation, abatement, withholding or reduction
whatsoever.
7.6 Reinstatement and Survival
Notwithstanding anything herein to the contrary, if the Administrative
Agent is required at any time whether before or after the Revolving Loan
Commitment Termination Date to make any payment under a Letter of Credit which
was outstanding on or before the Revolving Loan Commitment Termination Date,
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each Lender shall pay over to the Administrative Agent, in accordance with the
provisions of this Article 7, the amount of such Lender's Participation of such
amount. If the Administrative Agent is required at any time (whether before or
after the Revolving Loan Commitment Termination Date) to return to the Borrower
or to a trustee, receiver, liquidator, custodian or other similar official any
portion of the payments made by or on behalf of the Borrower to the
Administrative Agent in reimbursement of Reimbursement Obligations and interest
thereon, each Lender shall, on demand of the Administrative Agent, forthwith pay
over to the Administrative Agent for its account such Lender's Participation of
such amount, plus interest thereon from the day such demand is made to the day
such amount is returned by such Lender to the Administrative Agent at the rate
specified in Section 15.6.2.
7.7 Procedure for Issuance and Renewal of Letters of Credit
7.7.1 The Borrower may request the Administrative Agent to issue a
Commercial Letter of Credit in favor of a seller of goods to the Borrower, by
delivering to the Administrative Agent at its office specified in Section 9.1 a
commercial letter of credit application on the Administrative Agent's then
customary form (as such form may be modified from time to time, the "Commercial
Letter of Credit Applications"), completed to the satisfaction of the
Administrative Agent, together with the proposed form of such Commercial Letter
of Credit (which shall comply with the applicable requirements set forth herein)
and such other certificates, documents and other papers and information as the
Administrative Agent may reasonably request; provided that in the event of a
conflict between this Agreement and the Commercial Lever of Credit Application,
this Agreement shall govern with respect to such conflict.
7.7.2 The Borrower may request the Administrative Agent to issue a
Standby Letter of Credit by delivering to the Administrative Agent at its office
specified in Section 9.1 a standby letter of credit application on the
Administrative Agent's then customary form (as such form may be modified from
time to time, the "Standby Letter of Credit Application"), completed to the
satisfaction of the Administrative Agent, together with the proposed form of
such Standby Letter of Credit (which shall comply with the applicable
requirements set forth herein) and such other certificates, documents and other
papers and information as the Administrative Agent may reasonably request;
provided that in the event of a conflict between this Agreement and the Standby
Letter of Credit Application, this Agreement shall govern with respect to such
conflict.
7.7.3 Within three (3) Business Days following the date on which the
Administrative Agent shall have received an application for the issuance of a
Letter of Credit including the form thereof, and such additional certificates,
documents and other papers and information as the Administrative Agent may have
reasonably requested in satisfaction of all conditions to the issuance thereof,
the Administrative Agent shall, provided the conditions of Article 10 have been
complied with, issue such Letter of Credit (if the Borrower shall have requested
that such Letter of Credit be issued immediately) or (if the Borrower shall have
requested in the related Commercial Letter of Credit Application or Standby
Letter of Credit Application that such Letter of Credit be issued at a later
date) the Administrative Agent shall notify the Borrower that the Administrative
Agent shall, provided the conditions of Article 10 have been complied with,
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issue such Letter of Credit on such later date, or that the Administrative Agent
shall not issue such Letter of Credit by reason of a provision set forth herein.
7.7.4 The Borrower may request the extension or renewal of a Letter of
Credit issued hereunder which is not automatically renewed in accordance with
the terms contained therein, by giving written notice to the Administrative
Agent at least three (3) Business Days prior to the then current expiry date of
such Letter of Credit (provided that the Administrative Agent may accommodate
notices on shorter notice in its sole discretion). If the conditions precedent
in Section 10.2 shall have been fulfilled as required thereby, the
Administrative Agent shall promptly issue such extension or renewal.
7.7.5 With respect to any Letter of Credit issued hereunder which by
its terms is automatically renewed or extended unless notice to the contrary is
received by the beneficiary thereunder within the time period set forth therein
(the "Revocation Period"), the Administrative Agent shall, upon receipt of
notice from the Majority Lenders (which notice must be received by the
Administrative Agent not later than 10:00 A.M. (Montreal time) ten (10) Business
Days prior to the expiration of the Revocation Period so long as the
Administrative Agent shall have notified the Lenders of such renewal or
extension at least one Business Day prior to such date), to the effect that the
Majority Lenders have elected not to extend the current expiry date of such
Letter of Credit, promptly notify the Borrower and the beneficiary thereunder
that such Letter of Credit shall not be renewed.
7.7.6 Notwithstanding anything to the contrary in this Agreement, the
Administrative Agent shall have no obligation to extend or renew any Letter of
Credit issued hereunder to a maturity date extending beyond the Revolving Loan
Commitment Termination Date, and each Lender shall have no obligation to
purchase a participation in the Administrative Agent's obligations and rights
under any Letter of Credit extended or renewed to a date beyond the Revolving
Loan Commitment Termination Date.
7.8 Reimbursement of the Administrative Agent
7.8.1 In the event that any drawing shall be made under any Letter of
Credit, and if no Event of Default shall have occurred and be continuing, (i)
the Administrative Agent shall promptly notify the Borrower of such payment and
of the amount thereof, (ii) the payment by the Administrative Agent of such
drawing shall, if the Letter of Credit was in CDollars, constitute the making of
a Canadian Rate Advance to the Borrower by the Lenders according to their
respective Participation, and the Borrower shall be deemed to have elected to
denominate same in CDollars and pay interest thereon at the Canadian Rate, (iii)
the payment by the Administrative Agent of such drawing shall, if the Letter of
Credit was in USDollars, constitute the making of a Canadian Base Rate Advance
to the Borrower by the Lenders according to their respective Participation and
the Borrower shall be deemed to have elected to denominate same in USDollars and
pay interest thereon at the Canadian Base Rate, (iv) the Administrative Agent
shall notify each Lender by telecopier or by telephone (confirmed by telecopier)
of such drawing and of the portion thereof constituting a Canadian Rate Advance
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and of the portion thereof constituting a Canadian Base Rate Advance and (v)
immediately upon receipt of such notice, each Lender shall make its
Participation, in CDollars or USDollars, as applicable, available to the
Administrative Agent by wire transfer of immediately available funds to the
office of the Administrative Agent specified in Section 9.1.
7.8.2 In the event that a drawing shall be made under any Letter of
Credit and an Event of Default shall have occurred, no Canadian Rate Advance or
Canadian Base Rate Advance shall be deemed to have been made in respect of such
drawing and the Borrower (i) shall reimburse the Administrative Agent for the
amount paid on each draft drawn under each Letter of Credit not later than the
close of business on the first Business Day following the day on which the
Borrower receives notice of such drawing, and (ii) shall pay, (A) all charges
and expenses relating to such drawing as may be payable in accordance with
Section 7.9 and (B) interest at the rate specified in Section 7.10 on the amount
of such drawing for the period commencing on the date of any such payment and
ending on the date reimbursement is received by the Administrative Agent.
7.9 Commissions, Fees and Charges
7.9.1 The Borrower agrees to pay for each Letter of Credit, to (A) the
Administrative Agent (solely for its account) a non-refundable fronting fee with
respect to each Letter of Credit, in an amount equal to 1/8 of 1% per annum of
the face amount thereof, and (B) the Administrative Agent for the account of
each Lender, a non-refundable letter of credit commission, computed at a rate
equal to the Applicable Margin times such Lender's Participation of the
aggregate amount available to be drawn under such Letter of Credit, such
fronting fee and letter of credit commissions to be payable quarterly in advance
for the number of days outstanding, at the rate specified above and in the
currency of such Letter of Credit, commencing on the date of issuance of such
Letter of Credit and thereafter on the last day of each March, June, September
and December so long as such Letter of Credit shall remain outstanding.
7.9.2 In addition to the fees referred to in Section 7.9.1, the
Borrower agrees to pay or reimburse the Administrative Agent for such normal and
customary costs and expenses as are incurred or charged by the Administrative
Agent in issuing, effecting payment under or administering any Letter of Credit
(including, without limitation, amendment fees, correspondent lender fees,
reissuance costs and cancellation fees).
7.9.3 The Administrative Agent shall promptly distribute, at the end of
each calendar quarter, all letter of credit commissions received for the account
of each Lender by the Administrative Agent during such calendar quarter,
together with a statement from the Administrative Agent reconciling the
collection and distribution of such commissions.
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7.10 Interest on Amounts Disbursed under Letters of Credit
Subject to Section 7.8, the Borrower agrees to pay to the
Administrative Agent interest on any and all amounts disbursed by the
Administrative Agent under any Letter of Credit from the date of disbursement
until reimbursed in full at the Canadian Rate for Letters of Credit in CDollars
and at the Canadian Base Rate for Letters of Credit in USDollars. Interest
accrued hereunder shall be payable on demand. For the purposes of computing the
number of days for which interest shall accrue on amounts disbursed under
Letters of Credit, payments received by the Administrative Agent after 1:00 PM.,
Montreal time, shall be deemed to have been received on the next following
Business Day. All payments (including prepayments) by the Borrower to the
Administrative Agent, whether on account of the Borrower's Reimbursement
Obligation or interest thereon, on account of any fees due hereunder or
otherwise, shall be made in CDollars for Letters of Credit in CDollars and in
USDollars for Letters of Credit in USDollars and in immediately available funds
without set off, compensation or counterclaim to the Administrative Agent.
7.11 Computation of Interest and Fees; Payment not on Business Day
7.11.1 Interest and per annum fees due under this Article 7 shall be
computed on the basis of a year of 365 (or 366 in a leap year) days for actual
days elapsed. Any change in any interest rate hereunder resulting from a change
in the Canadian Rate or the Canadian Base Rate, shall become effective as of the
opening of business on the day on which such change in the Canadian Rate or the
Canadian Base Rate becomes effective.
7.11.2 If any payment under this Article 7 becomes due and payable on a
day which is not a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day, and, in the case of any amount disbursed under a
Letter of Credit, interest thereon shall be payable at the then applicable rate
during such extension.
7.12 Increased Costs
If any change occurring after the date of this Agreement in any Law or
in the interpretation or application thereof by any Governmental Authority
charged with the administration thereof shall either (i) impose, modify, assess
or deem applicable any reserve, special deposit, assessment or similar
requirement against Letters of Credit issued by the Administrative Agent or any
Lender or (ii) impose on the Administrative Agent or any Lender any other
condition regarding any Letter of Credit, and the result of any event referred
to in clauses (i) or (ii) above shall be to increase the cost to the
Administrative Agent or such Lender of issuing or maintaining a Letter of
Credit, or its participation therein, as the case may be (which increase in cost
shall be the result of the Administrative Agent's or such Lender's reasonable
allocation of the aggregate of such cost increases resulting from such events),
then, upon demand by the Administrative Agent or such Lender, the Borrower shall
immediately pay to the Administrative Agent or such Lender, from time to time as
specified by the Administrative Agent or such Lender, additional amounts which
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shall be sufficient to compensate the Administrative Agent or such Lender for
such increased cost, together with interest on each such amount from the date
demanded until payment in full thereof at the rate provided in Section 7.10. A
certificate as to the fact and amount of such increased cost incurred by the
Administrative Agent or any Lender as a result of any event mentioned in clauses
(i) or (ii) above, submitted by the Administrative Agent or any such Lender to
the Borrower, shall be conclusive, absent manifest error.
In the event the Borrower is required to pay additional amounts as
compensation for increased cost as provided above, the Borrower shall (subject
to the terms hereof) be entitled to require (with a copy to the Administrative
Agent) the Lender to whom such additional amounts are being paid to assign to an
alternate lender in accordance with Section 16.1.7 all of such Lender's rights
and obligations hereunder and such alternate lender shall execute all such
documents as may be reasonably required by the Administrative Agent, the
Borrower and such Lender to effect such assignment provided that (i) each such
assignment shall be arranged by the Borrower (with such reasonable assistance
from such Lender as the Borrower may request) after consultation with the
Administrative Agent and shall be an assignment of all of the rights and
obligations of the assigning Lender under this Agreement, (ii) no Lender shall
be obligated to make any such assignment as a result of a demand by the Borrower
pursuant to this Section 7.12 unless and until such Lender shall have received
payment from either the Borrower or the assignee in an aggregate amount at least
equal to the aggregate outstanding principal amount of the Loan and Bid Loan and
any Money Market Loans owing to such Lender, together with accrued interest
thereon to the date of payment of such principal amount and all other amounts
payable to such Lender under this Agreement (including, without limitation,
payment of the increased costs and additional amounts demanded by such Lender
pursuant to this Section 7.12 incurred by such Lender prior to the effective
date of such assignment), and (iii) such alternate lender shall have been
approved in writing by the Administrative Agent, such approval not to be
unreasonably withheld.
7.13 Further Assurances
The Borrower hereby agrees from time to time, to do and perform any and
all acts and to execute any and all further instruments required or reasonably
requested by the Administrative Agent more fully to effect the purposes of this
Article 7 and the issuance of the Letters of Credit hereunder.
7.14 Nature of Obligations; Indemnities
7.14.1 The obligations of the Borrower hereunder shall be absolute and
unconditional under any and all circumstances and irrespective of any set off,
compensation, counterclaim or defense to payment which the Borrower may have or
have had against the Administrative Agent, any Lender or any beneficiary of a
Letter of Credit. The Borrower assumes all risks of the acts or omissions of the
users of the Letters of Credit and all risks of the misuse of the Letters of
Credit. Neither the Administrative Agent, any of its correspondents nor any
Lender shall be responsible: (i) for the form, validity, sufficiency, accuracy,
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genuineness or legal effect of any document specified in any applications for
any of the Letters of Credit, even if it should in fact prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any of the Letters of Credit or any of the
rights or benefits thereunder or proceeds thereof in whole or in part, which may
prove to be invalid or ineffective for any reason; (iii) for failure of any
draft to bear any reference or adequate reference to any of the Letters of
Credit, or failure of anyone to note the amount of any draft on the reverse of
any of the Letters of Credit or to surrender or to take up any of the Letters of
Credit or to send forward any such document apart from drafts as required by the
terms of any of the Letters of Credit; (iv) for error, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (v) for any
error, neglect, default, suspension or insolvency of any correspondents of the
Administrative Agent; (vi) for error in translation or for errors in
interpretation of technical terms; (vii) for any loss or delay, in the
transmission or otherwise, of any such document or draft or of proceeds thereof;
or (viii) for any other circumstances whatsoever in making or failing to make
payment under a Letter of Credit; provided that in each of the circumstances
referred to in clauses (i) through (viii) above the Borrower shall have a claim
against the Administrative Agent, and the Administrative Agent shall be liable
to the Borrower, to the extent, but only to the extent, of any direct, as
opposed to consequential, damages suffered by the Borrower which the Borrower
proves were caused by the Administrative Agent's wilful misconduct or gross
negligence. None of the above shall affect, impair or prevent the vesting of any
of the rights or powers of the Administrative Agent or any of the Lenders.
7.14.2 In furtherance and extension and not in limitation of the
specific provisions hereinabove in this Article 7 set forth, (i) any action
taken or omitted by the Administrative Agent or by any of its respective
correspondents under or in connection with any of the Letters of Credit, if
taken or omitted in good faith and without wilful misconduct or gross
negligence, shall be binding upon the Borrower and shall not put the
Administrative Agent or its respective correspondents under any resulting
liability to the Borrower and (ii) the Administrative Agent may, without wilful
misconduct or gross negligence, accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary; provided, that if the Administrative
Agent shall receive written notification from both the beneficiary of a Letter
of Credit and the Borrower that sufficiently identifies (in the opinion of the
Administrative Agent) documents to be presented to the Administrative Agent
which are not to be honored, the Administrative Agent agrees that it will not
honor such documents.
7.14.3 The Borrower hereby agrees at all times to protect, indemnify
and save harmless the Administrative Agent and each Lender participating in a
Letter of Credit, from and against any and all claims, actions, suits and other
legal proceedings, and from and against any and all losses, claims, demands,
liabilities and damages, which they or any of them may, at any time, sustain or
incur by reason of or in consequence of or arising out of the issuance of any of
the Letters of Credit (all of the foregoing, collectively, the "indemnified
liabilities"), it being the intention of the parties that this Agreement shall
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be construed and applied to protect and indemnify each of the Administrative
Agent and each Lender participating in a Letter of Credit against any and all
risks involved in the issuance of all of the Letters of Credit, all of which
risks, whether or not foreseeable, being hereby assumed by the Borrower,
including, without limitation, any and all risks of all acts by any Governmental
Authority and any and all claims by correspondents used in connection with a
Letter of Credit, provided that the Borrower shall not have any obligation
hereunder to an indemnified party with respect to indemnified liabilities
arising from the gross negligence or wilful misconduct of such indemnified
party. Neither the Administrative Agent nor any Lender shall, in any way, be
liable for any failure by it or anyone else to pay a draft drawn under any of
the Letters of Credit as a result of any acts, whether rightful or wrongful, of
any Governmental Authority or any correspondent used in connection with a Letter
of Credit or any other cause not readily within their control or the control of
their respective correspondents. Without limiting the generality of the
foregoing, the Borrower shall be responsible for, and shall reimburse the
Administrative Agent forthwith upon its receipt of any demand therefor, any and
all commissions, fees and other charges paid or payable by the Administrative
Agent to any foreign lender which shall be an advising lender or a beneficiary
of a Letter of Credit which shall, in reliance thereon, have issued its own
letter of credit in respect of obligations of the Borrower.
7.15 Payments upon any Event of Default
The Borrower agrees that upon the occurrence and during the continuance
of any Event of Default, in addition to all other rights and remedies, the
Administrative Agent shall at the request, or may with the consent, of the
Majority Lenders by notice to the Borrower demand, immediate delivery of cash
collateral, and the Borrower agrees to deliver such cash collateral upon demand,
in an amount equal to the maximum amount that may be available to be drawn at
any time prior to the stated expiry of all outstanding Letters of Credit,
provided that such cash collateral shall be immediately due and payable upon the
occurrence of any Event of Default described in Section 12.1.11. Such cash
collateral shall be deposited in a special cash collateral account to be held by
the Administrative Agent as collateral security and as a pledge for the payment
and performance of the Borrower's obligations under this Agreement to the Agents
and the Lenders.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
8.1 Substitute Basis - Alternate Interest Rate
If a Lender determines in good faith that:
8.1.1 adequate and fair means do not exist for ascertaining the rate of
interest on a Libor Loan Portion for the ensuing Interest Period,
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8.1.2 the making or the continuing of a Libor Loan Portion has become
impracticable by an event materially or adversely affecting the London interbank
market, or
8.1.3 deposits in USDollars are not available to such Lender in the
London interbank market in sufficient amounts in the ordinary course of business
for the ensuing Interest Period in respect of a Libor Loan Portion, then, such
Lender may notify the Administrative Agent thereof and if such Lender so
notifies the Administrative Agent, the Administrative Agent shall promptly
notify the Borrower and the other Lenders in writing and, effective upon the
date such interest rate would otherwise become applicable, such Libor Loan
Portion shall be deemed for all purposes to be a Canadian Base Rate Advance and
the interest rate applicable thereto shall be the applicable Canadian Base Rate.
8.2 Increased Costs
If, with respect to any Borrowing or accommodation of any kind or
nature provided by the Lenders under this Agreement (each such form of
accommodation being in this Section 8.2 referred to as a "Facility") and as a
result of or due to any change occurring after the date of this Agreement in any
Law, or in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof or by reason of any compliance
with any guideline, request or requirement from any fiscal, monetary or other
authority (whether or not having the force of law),
(a) a Lender incurs a cost (which it would not otherwise have incurred)
or becomes liable to make a payment (calculated with reference to the
amount outstanding under a Facility) with respect to continuing to
provide or maintain a Facility or as a result of obligations of a
Lender being outstanding hereunder in favor of third parties (other
than a tax imposed on the overall income or net profits of such Lender
or franchise taxes imposed in lieu thereof);
(b) any reserve, special deposit or similar requirement is imposed or
increased with respect to a Facility increasing the cost thereof to a
Lender;
(c) a Lender suffers or will suffer a reduction in the rate of return
on its overall capital (other than a reduction by reason of any
increase in the taxes referred to in (a) above) as a result of the
amount of the capital that a Lender is required to maintain being
increased or of any change in the manner in which a Lender is required
to allocate its resources, or as a result of a requirement to attribute
or allocate capital in respect of any undrawn portion of a Facility;
(d) if there is any increase in the direct cost to a Lender of making
available the Facility; or
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(e) a Lender becomes liable to make any payment (not being the payment
of tax on its overall income or net profits or franchise taxes imposed
in lieu thereof) on or calculated by reference to the amount of a
Facility;
then and in each such case the Borrower shall, subject to the terms and
conditions of this Section 8.2, pay to such Lender such amount (herein called
the "Compensating Amount") as will compensate such Lender for and will indemnify
such Lender against such increases in cost or reductions of rate of return or
liability with respect to the Facility.
After the occurrence of an event having the effect set out in (a), (b),
(c), (d) or (e) above entitling a Lender to the payment of a Compensating Amount
and such Lender determining to claim such Compensating Amount, such Lender shall
forthwith give notice to the Borrower of the Compensating Amount claimed with
details of the events giving rise thereto and shall at that time or within
twenty (20) days thereafter provide to the Borrower a certificate setting out in
reasonable detail a compilation of the Compensating Amount claimed or, if such
Lender is then unable to determine the Compensating Amount or the method of
compilation thereof an estimate of such Compensating Amount and/or the method or
the basis on which such Lender estimates the calculation will be made which
estimate will be confirmed or adjusted by the aforesaid certificate. The
certificate of a Lender with respect to the Compensating Amount shall be final
and conclusive in the absence of manifest error.
The Borrower shall within thirty (30) days of receipt of such notice
from a Lender pay to such Lender the Compensating Amount (or the estimated
Compensating Amount) claimed but, if the Compensating Amount claimed and paid is
greater or lesser than the Compensating Amount as finally determined, such
Lender or the Borrower, as the case may be, shall pay to the other the amount
required to adjust the payment to the Compensating Amount required to be paid.
The obligation to pay such a Compensating Amount for subsequent periods will
continue, subject as herein provided, until the earlier of the termination of
the Facility affected by the event referred to in the notice given by such
Lender to the Borrower or the lapse or cessation of the event giving rise to the
Compensating Amount.
A copy of any notice or certificate given pursuant to this Section 8.2
shall be given to the Administrative Agent at the same time as such notice or
certificate is given.
8.3 Illegality
Notwithstanding anything to the contrary contained in this Agreement,
if any introduction of or change occurring after the date of this Agreement in
any Law, policy, exchange control, guideline or official directive (whether or
not having the force of law) or any change in the interpretation or application
thereof by any court or by any Governmental Authority charged with the
administration thereof makes it unlawful or prohibited for a Lender to make,
fund or maintain all or any Libor Loan Portion or the Canadian Base Rate Loan,
or to give effect to its obligations contemplated by this Agreement, such Lender
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shall notify the Borrower and the Administrative Agent in writing of the change
and, within the period specified by such Lender in the notice, at the option of
the Borrower:
8.3.1 if such introduction or change so affects the Canadian Base Rate
Loan, the Borrower shall elect (i) that the Borrowings in USDollars shall be
immediately converted into CDollars and interest thereon shall be payable at the
Canadian Rate, or (ii) to repay and, within the time required by the new law (or
at the end of any longer period that such Lender at its discretion may agree),
the Borrower shall repay the Borrowings in USDollars together with accrued
interest up to the date of payment and all other amounts which are due, and in
any such event the obligation of the Lenders to make any further Advance in
USDollars or to allow any conversion into USDollars shall terminate for so long
as any circumstance entitling any Lender to give such a notice shall continue;
or
8.3.2 if such introduction or change so affects the Libor Loan Portion,
the Borrower shall elect (i) that interest on the Libor Loan Portion shall be
payable at the Canadian Rate, or (ii) to repay and, within the time required by
the new law (or at the end of any longer period that such Lender at its
discretion may agree), the Borrower shall repay the Libor Loan Portion, together
with accrued interest up to the date of payment and all other amounts which are
due, and in any such event the obligation of the Lenders to make any further
Libor Advance or to allow any conversion of an Advance into a Libor Advance
shall terminate for so long as any circumstance entitling any Lender to give
such a notice shall continue.
8.4 Indemnity
If the Borrower converts or prepays any amounts pursuant to Section 8.3
in respect to a Libor Loan Portion on a day other than the last day of an
Interest Period in respect of such Libor Loan Portion, the Borrower shall on
demand pay to the Administrative Agent, the amount required to indemnify the
Lenders for any loss, cost or expense incurred as a result of such conversion or
prepayment including, without limitation, any costs incurred in liquidating or
maintaining or redeploying deposits or other funds obtained by the Lenders to
fund such Libor Loan Portion. A certificate of the Lenders setting out the basis
of the determination of the amount necessary to indemnify them shall, in the
absence of manifest error, be conclusive and binding for all purposes.
8.5 Replacement of a Lender
In the event a Lender has given a notice to the Borrower pursuant to
Section 8.1, 8.2 or 8.3, the Borrower shall (subject to the terms hereof) be
entitled to require (with a copy to the Administrative Agent) the Lender having
given such notice to assign to an alternate lender in accordance with Section
16.1.7 all of such Lender's rights and obligations hereunder and such alternate
lender shall execute all such documents as may be reasonably required by the
Administrative Agent, the Borrower and such Lender to effect such assignment,
provided that (i) each such assignment shall be arranged by the Borrower (with
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such reasonable assistance from such Lender as the Borrower may request) after
consultation with the Administrative Agent and shall be an assignment of all of
the rights and obligations of the assigning Lender under this Agreement, (ii) no
Lender shall be obligated to make any such assignment as a result of a demand by
the Borrower pursuant to this Section 8.5 unless and until such Lender shall
have received payment from either the Borrower or the assignee in an aggregate
amount at least equal to the aggregate outstanding principal amount of the Loan
and Bid Loan and any Money Market Loans owing to such Lender, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts payable to such Lender under this Agreement (including, without
limitation, payment of any amounts owing to such Lender pursuant to Section 8.1,
8.2 or 8.3, as applicable, prior to the effective date of such assignment),
(iii) such alternate lender shall have been approved in writing by the
Administrative Agent, such approval not to be unreasonably withheld, and (iv)
any such assignment shall be subject to the restrictions set forth in Section
16.1.3.
ARTICLE 9
PAYMENTS, TAXES, EXPENSES AND INDEMNITY
9.1 Payments by Borrower to Administrative Agent
Unless otherwise specifically provided for, the Borrower shall make
each payment pursuant to this Agreement before 11:00 a.m. (Montreal time) on the
day specified for payment. All such payments by the Borrower shall be made in
immediately available funds having same day value to the Administrative Agent,
for its account or for the account of the Lenders, at the Administrative Agent's
Main Branch, First Canadian Place, Toronto, Ontario, if in CDollars for Agency
Account No. 0002-1260-397, if in USDollars for Agency Account No. 0002-4636-010,
or at any other office or account designated by the Administrative Agent.
Whenever a payment is due to be made on a day which is not a Business Day, the
day for payment shall be the following Business Day.
9.2 Payments by Lenders to Administrative Agent
9.2.1 All payments in CDollars to be made by any Lender to the
Administrative Agent shall be made in immediately available funds having same
day value to the Administrative Agent, for the Borrower's account (unless
otherwise specified), at the branch, office or account mentioned in or
designated under Section 9.1 for CDollar payments by the Borrower and at the
time designated therein.
9.2.2 All payments in USDollars to be made by any Lender to the
Administrative Agent shall be made in immediately available funds having same
day value to the Administrative Agent, for the Borrower's account (unless
otherwise specified), at the branch, office or account mentioned in or
designated under Section 9.1.1 or 9.1.2, as applicable, for USDollar payments by
the Borrower and at the time designated therein.
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9.3 Payments by Administrative Agent to Borrower
Any payments received by the Administrative Agent for the account of
the Borrower shall be paid in funds having same day value to the Borrower by the
Administrative Agent on the date of receipt, or if such date is not a Business
Day on the next Business Day, if in CDollars, to the Borrower's CDollar Account
No. 0001-277 (Transit 00011-001), at the Administrative Agent, if in USDollars,
to the Borrower's USDollar Account No. 4600 292 (Transit 00011-001), at the
Administrative Agent, or to such other accounts in Canada as the Borrower may
designate in writing to the Administrative Agent.
9.4 Distribution to Lenders and Application of Payments
Except as otherwise indicated herein, all payments made to the
Administrative Agent by the Borrower for the account of the Lenders in
connection herewith shall be distributed the same day by the Administrative
Agent in funds having same day value among the Lenders to the accounts last
designated in writing by the Lenders respectively to the Administrative Agent
pro rata, in accordance with their respective Participations.
9.5 Currency Payment
Principal, interest and interest on overdue amounts on the Canadian
Rate Loan, all Bankers' Acceptances, all BA Equivalent Advances, and all
Reimbursement Obligations with respect to Letters of Credit outstanding in
CDollars and all other Advances, Bid Advances and Money Market Loans outstanding
in CDollars shall be payable in CDollars, and principal, interest and interest
on overdue amounts on the Libor Loan, any Libor Advance, the Canadian Base Rate
Loan, all Reimbursement Obligations with respect to Letters of Credit
outstanding in USDollars and all other Advances, Bid Advances and Money Market
Loans outstanding in US Dollars and all other amounts payable by the Borrower
under this Agreement shall be payable to the Administrative Agent in USDollars,
unless otherwise indicated herein.
9.6 Set-off
The Borrower shall make all payments hereunder regardless of any
counterclaim, compensation or set-off.
9.7 Taxes
The Borrower shall make all payments required under this Agreement free
and clear of, and exempt from, and without deduction for, or on account of, any
Tax imposed by the Crown or any political subdivision thereof, excluding, in the
case of each Lender and the Administrative Agent, Taxes on the overall income or
net profits (or franchise taxes imposed in lieu thereof) of such Lender or
Administrative Agent imposed by the Crown or any political subdivision thereof
or by any foreign jurisdiction in which such Lender or Administrative Agent is
organized or has its applicable lending office (all such non-excluded Taxes
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being hereinafter referred to as "Section 9.7 Taxes"). If any Section 9.7 Tax is
deducted or withheld from any payment, the Borrower shall promptly remit to the
Administrative Agent the amount so deducted or withheld together with relevant
receipts from the taxing authority addressed to the Administrative Agent. If the
Borrower is prevented by operation of law or otherwise from paying, causing to
be paid or remitting such Section 9.7 Tax, the interest payable under this
Agreement will be increased to the rates necessary to yield and remit to the
Administrative Agent the principal sum advanced together with interest at the
rates specified in this Agreement after provision for payment of such Section
9.7 Tax. At the request of the Administrative Agent, the Borrower shall from
time to time execute and deliver any and all further documents as may be
necessary or advisable (to the extent reasonable and without material cost or
disadvantage to the Borrower) to give full force and effect to such increase in
the rate of interest. The Borrower further covenant to indemnify each Lender and
the Administrative Agent in respect of any claim or loss incurred as a result of
the Borrower's delay or failure to deduct or to withhold any such Section 9.7
Tax, including all penalties and interest.
If any Lender or the Administrative Agent, as applicable, receives a
refund of or a credit for a Section 9.7 Tax for which a payment has been made by
the Borrower pursuant to this Section 9.7, which refund or credit in the good
faith judgment of such Lender or the Administrative Agent, as the case may be,
is attributable to such payment made by the Borrower, then the Lender or the
Administrative Agent, as the case may be, shall reimburse the Borrower for such
amount as the Lender or the Administrative Agent, as the case may be, determines
to be the proportion of the refund or credit as will leave it, after such
reimbursement, in no better or worse position than it would have been if the
payment had not been required. Each Lender and the Administrative Agent, as the
case may be, shall claim any refund or credit that it determines is available to
it, unless it concludes in its reasonable discretion that it would be adversely
affected by making such a claim.
Each Lender and the Administrative Agent agrees that it will (i) take
all reasonable actions reasonably requested by the Borrower that are without
risk or material cost to such Lender or the Administrative Agent (as the case
may be) to maintain all exemptions available to it from withholding taxes
(whether available by treaty or existing administrative waiver), and (ii) to the
extent reasonable and without material cost to it, otherwise cooperate with the
Borrower to minimize any amounts payable by the Borrower under this Section.
9.8 Application of Payments
All payments made by or on behalf of the Borrower to the Administrative
Agent for the account of the Lenders pursuant to this Agreement shall in each
instance be applied by the Administrative Agent in the following order:
9.8.1 to amounts due hereunder other than those amounts described in
Sections 9.8.2, 9.8.3 and 9.8.4 hereof;
9.8.2 to amounts due pursuant to Article 5 and Section 7.9.1;
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9.8.3 to repayment of amounts due in respect of the Loan; and
9.8.4 to repayment of amounts due in respect of Bid Loans and Money
Market Loans;
provided that after acceleration pursuant to Section 12.2, payments shall be
applied as the Lenders, in their discretion, may from time to time determine,
provided that payments on the Loan, the Bid Loans and the Money Market Loans
shall be made on a pro rata basis after acceleration.
9.9 Expenses and Indemnity
9.9.1 The Borrower shall supply all statements, reports, certificates,
opinions, appraisals and other documents or information required to be furnished
to the Lenders or the Administrative Agent pursuant to this Agreement without
cost to any Lender or to the Administrative Agent.
9.9.2 The Borrower shall reimburse and indemnify the Administrative
Agent (for itself and on behalf of the Lenders) and the other Agents, on demand,
all of the legal fees and disbursements (and tax on goods and services in
respect thereof) of Arrangers' Counsel and costs and other out-of-pocket
expenses (and tax on goods and services in respect thereof) reasonably incurred
from time to time in connection with (i) the due diligence, negotiation,
preparation and execution of this Agreement and any other documents referred to
herein or contemplated hereby, (ii) the negotiation, preparation and execution
of all waivers, amendments and variations in relation to this Agreement and any
other documents referred to herein or contemplated hereby, (iii) the operation
and interpretation of this Agreement and any agreement among the Lenders and the
Administrative Agent concerning their respective rights, remedies, duties and
responsibilities, and (iv) the syndication or arrangement of the Credit and
publicity, advertising and signing in connection with the Credit. In addition,
the Borrower agrees to pay on demand all of the legal fees of the Administrative
Agent and each of the Lenders and disbursements and costs and expenses (and tax
on goods and services in respect thereof) reasonably incurred in connection with
the enforcement of, or the preservation of any rights under, this Agreement and
the preservation, enforcement and realization of any other documents referred to
herein or contemplated hereby.
In addition, the Borrower shall pay or indemnify the Administrative Agent and
the Lenders against any and all stamp, registration and similar taxes which may
be payable in connection with the entry into, the performance of and the
enforcement of this Agreement.
9.9.3 Without prejudice to the rights of the Lenders under the
provisions of Section 5.6, the Borrower agrees to indemnify each Lender against
any loss or expense which it may sustain or incur in obtaining or redeploying
deposits as a result of the failure by the Borrower to pay when due any
principal of the Loan or a Bid Loan or a Money Market Loan for any reason to
borrow in accordance with a Notice of Borrowing or a Notice of Bid Borrowing or
other similar notice given by the Borrower to the Administrative Agent, to the
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extent that any such loss or expense is not recovered pursuant to any other
provisions hereof. A certificate of a Lender or the Administrative Agent setting
forth the basis for the determination of the interest due on overdue principal
or interest and of the amounts necessary to indemnify such Lender in respect of
such loss or expense, submitted to the Borrower, shall be conclusive and binding
for all purposes except in case of manifest error.
9.9.4 Notwithstanding any other provision of this Agreement, if for any
reason, including the acceleration of the maturity of the Loan, the Borrower
prepays, repays or converts all or any portion of a Bankers' Acceptance on a day
other than the maturity date thereof or the Libor Loan on a day other than the
last day of the then current Interest Period applicable to the Libor Loan or a
Libor Loan Portion, or if the Borrower, having given a Notice of Borrowing
requesting a Libor Advance, fails for any reason to fulfill on or before the
Drawdown Date for such Borrowing the applicable conditions set forth in Article
10, the Borrower shall on demand pay to each Lender the amount required to
indemnify such Lender for any loss, cost or expense incurred by such Lender as a
result of such payment or conversion or failure to fulfil such conditions
including, without limitation, any loss or expense incurred in liquidating or in
maintaining or redeploying deposits or other funds obtained by such Lender to
fund or maintain an Acceptance or the Libor Loan or such Libor Loan Portion. A
certificate of a Lender setting out the basis of the determination of the amount
necessary to indemnify it shall, in the absence of manifest error, be conclusive
and binding for all purposes.
9.9.5 The Borrower agrees to indemnify and hold the Administrative
Agent and each of the Lenders harmless from and against any and all reasonable
claims, damages, losses, liabilities and expenses incurred, suffered or
sustained by the Administrative Agent or any of the Lenders by reason of,
relating to, arising out of or resulting from the Credit, the entering into,
carrying out or performance of this Agreement or any matter or document
contemplated herein by the Administrative Agent or a Lender, other than, in
respect of the Administrative Agent or a Lender, any such claim which arises as
a result of the gross negligence or wilful misconduct of the Administrative
Agent or such Lender.
9.10 Non-Receipt by Administrative Agent
Where a sum is to be paid hereunder to the Administrative Agent for the
account of another party hereto, the Administrative Agent shall not be obliged
to make the same available to that other party hereto until it has been able to
establish that it has actually received such sum, but if it does pay out a sum
and it proves to be the case that it had not actually received the sum it paid
out, then the party hereto to whom such sum was so made available shall on
request ensure that the amount so made available is refunded to the
Administrative Agent, and shall on demand indemnify the Administrative Agent
against any cost or loss it may have suffered or incurred by reason of its
having paid out such sum prior to its having received such sum.
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9.11 Indemnity by the Borrower
The Borrower hereby indemnifies and holds the Lenders, the Agents and
their respective shareholders (provided such shareholders directly or indirectly
control any one of them), directors, partners (solely in the case of any Lender
or Agent that is a general or limited partnership), agents, officers,
Subsidiaries and affiliates (each an "Indemnified Party") harmless from and
against any and all damages, losses, settlement payments, obligations,
liabilities, claims, actions or causes of action, and costs and expenses
(collectively, "Indemnified Liabilities") incurred, suffered, sustained or
required to be paid by an Indemnified Party by reason of, relating to, arising
out of or resulting from any one or more of the following:
(a) the Release or the threat of a Release of any Contaminant in
violation of Environmental Laws from, or the presence of any
Contaminant affecting, the property of the Borrower or any Subsidiary
of the Borrower (the "Property") in violation of Environmental Laws,
whether or not the same originates or emanates from any such Property
or any contiguous real property, including any loss of value of any
such Property as a result of any of the foregoing;
(b) (i) any costs of removal or remedial action incurred by any
federal, provincial, state, municipal, local or other government, (ii)
any costs incurred by any other Person or damages from injury to,
destruction of, or loss of natural resources, including costs of
assessing such injury, destruction or loss incurred in relation with
the Property, or (iii) the operators and activities of the Borrower or
any Subsidiary of the Borrower as a result of the violation of
Environmental Laws by the Borrower or any Subsidiary of the Borrower;
(c) liability for personal injury or property damage arising under any
statutory or common or civil law tort or delict theory, including,
without limitation, damages assessed for the maintenance of a public or
private nuisance or for the carrying on of an Environmental Activity
at, near, or with respect to the Property;
(d) any investigative, administrative or judicial proceeding commenced
or threatened by any Person, whether or not any such Indemnified Party
shall be designated as a party or a potential party thereto, and any
fees or expenses incurred by the Indemnified Parties in enforcing this
indemnity, (and all Indemnified Liabilities, whether based on any
federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or
regulations), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any
such Indemnified Party, in any manner relating to or arising out of
this Agreement, the Intercreditor Agreement or the Related Agreements
or the transactions contemplated hereby or thereby (including the
Lenders' agreement to make the Loan hereunder or the use or intended
use of the proceeds thereof or the issuance of Letters of Credit
hereunder or the use or intended use of any thereof), or any
enforcement of this Agreement or the Intercreditor Agreement or any of
the agreements contemplated hereby (including any enforcement of the
Guaranty), (ii) the statements contained in the commitment letter
delivered by any Lender to the Borrower with respect thereto; and
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(e) any other environmental matter affecting the Property or the
operations and activities of the Borrower or any Subsidiary of the
Borrower within the jurisdiction any federal environmental agency, or
any provincial, municipal or local environmental agency;
other than, in respect to an Indemnified Party, any such claims which shall
arise or be incurred as a result of the gross negligence or wilful misconduct of
such Indemnified Party. In litigation or the preparation therefor, each
Indemnified Party shall be entitled to select its own counsel, which shall be
subject to approval by the Borrower, acting reasonably, and, in addition to such
indemnity, the Borrower shall pay promptly the reasonable fees an expenses of
such counsel. Each Indemnified Party shall keep the Borrower advised on a
regular basis in regard to any such litigation or the preparation therefor and
no settlement shall be made in connection therewith unless the Borrower have
been previously advised of the settlement and have had a chance to make
representations to the Indemnified Party in respect thereof. This
indemnification obligation shall survive the execution hereof and the
termination of the Commitment of any Lender to make Advances hereunder.
9.12 Survival of Indemnification Obligations
Without prejudice to the survival or termination of any other agreement
of the Borrower under this Agreement, the obligations of the Borrower under
Sections 7.14.3, 8.4, 9.7, 9.9 and 9.11 shall survive the termination of the
Total Commitment and the repayment in full of the Loan, the Bid Loan and any
Money Market Loans.
ARTICLE 10
CONDITIONS OF LENDING
10.1 Conditions Precedent to the Closing
The Closing Date shall occur on the date of fulfillment of the
following conditions to the satisfaction of the Arrangers and Arrangers'
Counsel:
10.1.1 Loan Party and Merger Sub Documents. On or prior to 10:00 a.m.
(New York time) on the Closing Date, the Administrative Agent shall have
received from the Loan Parties, in sufficient quantities to provide two copies
to each Lender and to the Administrative Agent, the following, each dated as of
a date satisfactory to the Arrangers and in form and substance satisfactory to
the Arrangers and Arrangers' Counsel:
(i) this Agreement duly executed by the Loan Parties, the Lenders, and
the Agents;
(ii) certified copies of the charter and by-laws of each of the Loan
Parties and Merger Sub;
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(iii) copies of all documents and resolutions evidencing necessary
corporate action of the Loan Parties and Merger Sub, approving and
authorizing the execution, delivery and performance of this Agreement
and the Related Agreements to which such Loan Parties and Merger Sub
are a party, and approving and authorizing the consummation of the
Tender Offer and the Merger (in the case of the Borrower and Merger
Sub) in the manner contemplated by the Tender Offer Materials, and
approving and authorizing the manner in which and by whom the foregoing
documents are to be executed and delivered, certified as of the Closing
Date by the corporate secretary or an assistant secretary of such
Persons as being in full force and effect without modification or
amendment;
(iv) a certificate of status, compliance, good standing or like
certificate with respect to each of the Loan Parties and Merger Sub
issued by the appropriate government officials of the jurisdiction of
its incorporation;
(v) certified copies of any and all necessary governmental, regulatory
and other third party authorizations and approvals (including any
exchange control approvals) required to be obtained on or prior to the
Closing Date with respect to this Agreement;
(vi) a certificate of the Secretary, Associate Secretary or
Assistant-Secretary of each of the Loan Parties and Merger Sub
certifying the names and true signature of the officers of the Loan
Parties and Merger Sub authorized to sign this Agreement and the
Related Agreements to which such Loan Parties and Merger Sub are a
party, and any other documents or certificates to be delivered pursuant
to this Agreement;
(vii) a certificate of the treasurer or other senior officer of the
Borrower to the effect that, to the best of his knowledge after
reasonable inquiry, all representations and warranties of each of the
Loan Parties set forth in Article 2 hereof are true in all material
respects as of the Closing Date;
(viii) a favorable opinion of the Chief Legal Officer and Corporate
Secretary of the Borrower, in substantially the form of Schedule
10.1.1-A annexed hereto; a favorable opinion of Davis Polk & Wardwell,
U.S. counsel for the Loan Parties, in substantially the form of
Schedule 10.1.1-B annexed hereto; and a favorable opinion of Hopkins &
Sutter, legal counsel to the Guarantors, substantially the form of
Schedule 10.1.1-C annexed hereto, in each case addressed to the
Arrangers and each Lender; and
(ix) a favorable opinion of Arrangers' Counsel, addressed to the
Arrangers and to each Lender in substantially the form of Schedule
10.1.1-D annexed hereto.
10.1.2 Capital Structure and Ownership. The capital structure and
ownership of the Borrower and its Subsidiaries, before and immediately after
giving effect to the Tender Offer, shall be as set forth on Schedule 10.1.2
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annexed hereto. The Borrower shall have also set forth on Schedule 10.1.2 the
proposed capital structure and ownership of the Borrower and its Subsidiaries
after giving effect to the Merger.
10.1.3 Target Documents. On or before the Closing Date, the Borrower
shall deliver to Lenders (or to Administrative Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its counsel)
the following with respect to Target, each dated the Closing Date:
10.1.3.1 Certified copies of the Certificate or
Articles of Incorporation of Target as in effect on the Closing Date,
together with a good standing certificate from the Secretary of State
of its jurisdiction of incorporation and each other state in which
Target is qualified as a foreign corporation to do business and, to the
extent generally available, a certificate or other evidence of good
standing as to payment of any applicable franchise or similar taxes
from the appropriate taxing authority of each of such jurisdictions,
each dated a recent date prior to the Closing Date; and
10.1.3.2 Copies of the by-laws of Target as in effect
on the Closing Date.
10.1.4 Tender Offer Materials and Related Agreements.
10.1.4.1 Tender Offer Materials. The Arrangers shall
have received a copy of all Tender Offer Materials and other documents
in connection therewith filed with the Securities and Exchange
Commission. The Tender Offer Materials shall not have been amended or
otherwise modified, and no conditions to the Tender Offer shall have
been modified or waived in any respect, if such amendment, modification
or waiver would (w) increase the consideration payable per share of
Target Common Stock, (x) increase the aggregate amount of cash
consideration to be paid by Merger Sub in connection with the Tender
Offer and the Merger, (y) decrease the number of shares constituting
Minimum Shares set forth in the condition with respect to the minimum
number of shares to be validly tendered, or (z) otherwise be materially
adverse to the Lenders, without in each case obtaining the prior
written consent of Arrangers to such amendment, modification or waiver.
10.1.4.2 Related Agreements. The Arrangers shall have
received a fully executed or conformed copy of each Related Agreement
and any documents executed in connection therewith. Each Related
Agreement shall be in full force and effect and no provision thereof
shall have been amended, modified or waived in any respect, if such
amendment, modification or waiver would (w) increase the consideration
payable per share of Target Common Stock, (x) increase the aggregate
amount of cash consideration to be paid by Merger Sub in connection
with the Tender Offer and the Merger, (y) decrease the number of shares
constituting Minimum Shares set forth in the condition with respect to
the minimum number of shares to be validly tendered, or (z) otherwise
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be materially adverse to the Lenders, without in each case obtaining
the prior written consent of Arrangers to such amendment, modification
or waiver.
10.1.4.3 Officers' Certificates. Administrative Agent
shall have received Officers' Certificates from the Borrower and Merger
Sub to the effect that (a) the Merger Agreement is in full force and
effect and no provision thereof (except as permitted hereunder) has
been modified or waived in any respect without the consent of the
Arrangers and (b) each such Person has complied with all agreements and
conditions contained in the Merger Agreement and any agreements or
documents referred to therein required to be performed or complied with
by each of them on or before the Closing Date.
10.1.4.4 US Credit Documents. The Arrangers shall
have received a fully executed or conformed copy of the US Credit
Documents, including the US Credit Agreement (and all exhibits and
schedules thereto) and any promissory notes evidencing the US Term
Loans and the US Revolving Loans, and the Intercreditor Agreements each
of which shall be in form and substance reasonably satisfactory to the
Arrangers, and each such agreement and promissory note shall be in full
force and effect.
10.1.5 Environmental Reports. The Arrangers shall have received reports
and other information, in form, scope and substance satisfactory to the
Arrangers, regarding environmental matters relating to the Borrower, the
Guarantors and Target.
10.1.6 Necessary Governmental Authorizations and Consents; Expiration
of Waiting Periods, Etc. The Borrower shall have obtained all Governmental
Authorizations and all material consents of other Persons, in each case that are
necessary or advisable in connection with the consummation by the Borrower and
Merger Sub of the Tender Offer and the Merger (other than final approval by the
STB of the Acquisition by the Borrower of control of Target), the other
transactions contemplated by this Agreement and the Related Agreements, and each
of the foregoing shall be in full force and effect, in each case other than
those the failure to obtain or maintain which, either individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
Without limiting the generality of the foregoing, the Arrangers shall have
received evidence satisfactory to them that Borrower shall have received an
informal nonbinding opinion of the STB staff that the Voting Trust established
pursuant to the Voting Trust Agreement effectively insulates the Borrower from
any violation of law or STB policy against unauthorized control of Target, and
the Borrower shall have filed with the STB a copy of the Voting Trust Agreement
and a copy of the Schedule 14D filed in connection with the Tender Offer. All
applicable waiting periods shall have expired without any action being taken or,
to the knowledge of the Borrower, threatened by any competent authority which
would materially restrain, prevent or otherwise impose material adverse
conditions on the Tender Offer or the Merger or the financing thereof.
10.1.7 Financial Statements; Pro Forma Balance Sheet; Projections. On
or before the Closing Date, Lenders shall have received from the Borrower:
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(i) unaudited financial statements (dated January 21, 1998) of the
Borrower and its Consolidated Subsidiaries for the fiscal year ended
December 31, 1997, consisting of a consolidated balance sheet and the
related consolidated statements of income, shareholders' equity and
changes in financial position for such fiscal years, all in reasonable
detail and certified by the treasurer of the Borrower that they fairly
present the consolidated financial condition of the Borrower and its
Consolidated Subsidiaries as at such date and the results of the
operations of the Borrower and its Consolidated Subsidiaries for the
period ended on such date, subject to changes resulting from audit and
all in accordance with generally accepted accounting principles
consistently applied;
(ii) unaudited financial statements of Target and its Subsidiaries for
the fiscal year ended December 31, 1997, consisting of a consolidated
balance sheet and the related consolidated statements of income,
stockholders' equity and cash flows for the period ending on such date;
(iii) the Pro Forma Closing Balance Sheet; and
(iv) a consolidated plan and financial forecast for Borrower and its
Subsidiaries for the four-fiscal year period ending on December 31,
2001 (the "Financial Projections" for such fiscal years), including,
without limitation, a forecasted consolidated balance sheet and
forecasted consolidated statements of income and cash flows of the
Borrower and its Subsidiaries for each such fiscal year, together with
an explanation of the assumptions on which such forecasts are based.
10.1.8 No Material Adverse Effect. Since September 30, 1997, there
shall have occurred (i) no material adverse change in or effect on, either
individually or in the aggregate, the condition, operations, properties,
business or results of operations of the Borrower and its Consolidated
Subsidiaries taken as a whole; and (ii) no material adverse change in or effect
on, either individually or in the aggregate, the condition, operations,
properties, business or results of operations of Target and its Subsidiaries
taken as a whole. Since September 30, 1997, no information submitted by the
Borrower to the Arrangers shall have proved to be inaccurate, incomplete, or
misleading in any material respect. Since February 9, 1998, no information,
condition or event shall have occurred or come to the attention of the Lenders
that (i) relates to the Borrower or Target or their respective Subsidiaries,
(ii) is inconsistent with the written information previously disclosed to the
Arrangers in connection with this Agreement and (iii) would reasonably be
expected to result in a material adverse change in or effect on, either
individually or in the aggregate, the condition, operations, properties,
business or results of operations of the Borrower, Target and their respective
Subsidiaries, taken as a whole, which change or effect adversely affects or
could reasonably be expected to adversely affect the ability of the Borrower and
its Consolidated Subsidiaries, taken as a whole, to perform any of their
obligations hereunder.
10.1.9 Underwriting Fees. The Borrower shall have paid to the Arrangers
the fees payable on the Closing Date referred to in Section 5.9.
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10.1.10 Administrative Agent's Fee. The Borrower shall have paid to the
Administrative Agent the fee payable on the Closing Date referred to in Section
5.11.
10.1.11 Fees and Expenses of Agents. The Borrower shall have paid to
Agents all costs, fees and expenses payable under Section 9.9.2 to the extent
incurred before the Closing Date and presented to the Borrower for payment at
least one Business Day before the Closing Date.
10.2 Conditions Precedent to the Term Loans and other Advances on Initial
Funding Date
The Initial Funding Date shall occur on the date of fulfillment of the
following conditions (in addition to the conditions set forth in Sections 10.1
and 10.3) to the satisfaction of the Arrangers and Arrangers' Counsel:
10.2.1 Proceeds of Debt and Equity Capitalization of Merger Sub.
10.2.1.1 Use of Proceeds of Term Loan by Borrower.
The Borrower shall have provided evidence satisfactory to the Arrangers
that all proceeds of the Term Loans and the Revolving Loans, if any,
made on the Initial Funding Date, together with certain cash on hand of
the Borrower and borrowings by Grand Trunk made on the Initial Funding
Date under the US Credit Agreement, shall be applied by the Borrower to
the refinancing of Indebtedness under the Existing Credit Agreements
and/or to the payment of Transaction Costs and contributed to the
capital of Merger Sub as common equity to be applied to the purchase of
the Tendered Target Shares.
10.2.1.2 Use of Proceeds by Merger Sub. The Borrower
shall have provided evidence satisfactory to the Arrangers that all
proceeds of the capitalization of Merger Sub described in the
immediately preceding Section 10.2.1.1 will be applied on the Initial
Funding Date to the purchase of the Tendered Target Shares.
10.2.2 Tendered Target Shares. The Borrower shall have delivered to the
Arrangers (a) a certificate of the Depositary certifying to the number of
Tendered Target Shares, and (b) an Officers' Certificate of the Borrower
certifying that the Tendered Target Shares to be purchased with the proceeds of
the Term Loans, the Revolving Loans, the US Term Loans and the US Revolving
Loans to be made on the Initial Funding Date and cash on hand of the Borrower
represent, in the aggregate, not less than the Minimum Shares and not more than
46,051,761 shares of Target Common Stock.
10.2.3 Maximum Consideration for Tendered Target Shares. Each of the
Arrangers shall have received evidence satisfactory to it that the aggregate
cash consideration to be paid by Merger Sub on the Initial Funding Date to
purchase the Tendered Target Shares, does not exceed US$1,796,018,679.00. The
Tender Offer shall have been consummated in all respects in accordance with the
Tender Offer Materials.
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10.2.4 Repayment of Existing Credit Agreements and Termination of
Related Liens. The Borrower and its Subsidiaries shall have, either prior to or
contemporaneously with the application of the proceeds of the Term Loans and the
Revolving Loans, (a) repaid in full all Indebtedness outstanding under the
Existing Credit Agreements, (b) terminated any commitments to lend or make other
extensions of credit thereunder and (c) taken all action necessary to terminate
or release any Liens securing Indebtedness or other obligations of the Borrower
and its Subsidiaries thereunder, in each case on terms satisfactory to the
Administrative Agent.
10.2.5 US Credit Agreement. The conditions precedent to the
effectiveness of the obligations to extend the initial advances under the US
Credit Agreement shall have been satisfied or waived.
10.3 Conditions Precedent to each Advance
The obligation of each Lender to make each Advance (including the
initial Advance) and each Bid Advance (including the initial Bid Advance) and to
issue each Letter of Credit (including the first Letter of Credit) hereunder is
subject to and conditional upon the prior fulfillment of the following
conditions:
10.3.1 The Administrative Agent shall have received, as applicable, a
Notice of Borrowing prior to the Drawdown Date as required in Section 3.3 or a
Notice of Conversion prior to the Conversion Date as required in Section 4.3 or
a Notice of Bid Borrowing prior to the date of the proposed Bid Borrowing as
required by Section 3.4.1 or an application as required in Section 7.7.1 or
7.7.2;
10.3.2 On the date of each such Advance or such Bid Advance or such
Letter of Credit, as applicable, the following statements shall be true (and the
acceptance by the Borrower of the proceeds of such Advance or such Bid Advance
or the issuance of such Letter of Credit, as applicable, shall be deemed to
constitute a representation and warranty by the Borrower and each of the
Guarantors that on the date of such Advance or such Bid Advance or such Letter
of Credit, as applicable, such statements are true):
(i) the representations and warranties contained in Article 2, except
for Section 2.1.3, and Sections 2.1.14, 2.1.21, 2.1.22, 2.1.26 and
2.1.27 and except that clause (i) of Section 2.1.7 shall be read as if
it referred to the most recent financial statements of the Borrower
delivered by the Borrower to the Administrative Agent pursuant to
Section 11.1.2 and the date in Section 2.1.17 shall be the last day of
the most recent fiscal year for which the Borrower has furnished its
audited annual consolidated statements to the Administrative Agent
pursuant to Section 11.1.2, are true and correct in all material
respects on and as of the date of such Advance or such Bid Advance or
such Letter of Credit, as applicable, as though made on and as of such
date;
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(ii) the making of such Advance or such Bid Advance or the issuance of
such Letter of Credit, as applicable, requested on such Drawdown Date
shall not violate any law including, without limitation, Regulation G,
Regulation T, Regulation U or Regulation X of the Board of Governors of
the Federal Reserve System;
(iii) no event has occurred and is continuing, or would result from
such Advance or such Bid Advance or such Letter of Credit, as
applicable, which constitutes an Event of Default or would constitute
an Event of Default but for the requirement that notice be given or
time elapse or both; and
(iv) in the event that a Money Market Loan will be outstanding
immediately after giving effect to the making of such Advance or such
Bid Advance or such Letter of Credit, as applicable, the Borrower shall
have complied with the provisions of Section 3.5.11.
10.4 Waiver
The terms and conditions of Sections 10.1, 10.2 and 10.3 are inserted
for the sole benefit of the Lenders and may be waived by the Administrative
Agent on instruction from the Majority Lenders in whole or in part, with or
without terms or conditions, in respect of any Advance or Bid Advance or Letter
of Credit, as applicable, without prejudicing the right of the Lenders to assert
these terms and conditions in whole or in part in respect of any other Advance
or Bid Advance or Letter of Credit, as applicable.
10.5 Waiver by Lenders under Existing Credit Agreements.
In order to facilitate the satisfaction of the condition set forth in
Section 10.2.4 above, each of the parties hereto which is a party to either
Existing Credit Agreement waives (i) the requirement in Section 4.7 thereof that
a notice terminating the commitments of the lenders thereunder must be given at
least five (5) Business Days (as defined in the relevant Existing Credit
Agreement) prior to such termination, (ii) to the extent necessary, the
requirement in Section 3.5 thereof that a notice of prepayment of any Advance
(as defined in the relevant Existing Credit Agreement) must be given at least
three (3) Business Days prior to such termination and (iii) to the extent
necessary, the prohibition in Section 4.4.4 thereof on the prepayment of any
Libor Loan Portion (as defined in the relevant Existing Credit Agreement) prior
to the last day of the then current Interest Period (as defined in the relevant
Existing Credit Agreement) with respect thereto.
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ARTICLE 11
COVENANTS
11.1 Affirmative Covenants
So long as any amount owing hereunder remains unpaid or any Lender has
any Commitment under this Agreement, and unless consent is given in accordance
with Section 15.12, the Borrower and each of the Guarantors, as applicable,
shall:
11.1.1 duly and punctually pay all sums of money due by it under the
terms of this Agreement or otherwise at the times and places and in the manner
provided for by this Agreement or by any other applicable agreement and shall
duly and punctually perform and observe all other obligations on its part to be
performed or observed hereunder or thereunder at the times and in the manner
provided for herein or therein;
11.1.2 furnish to the Administrative Agent in sufficient copies for
distribution to each Lender:
(i) as soon as possible and in any event within five (5) Business Days
after the occurrence of each Event of Default or becoming aware of each
event which, with the giving of notice or lapse of time or both, would
constitute an Event of Default, a statement of the principal financial
officer of the Borrower setting forth details of such Event of Default,
or event, and the action which the Borrower proposes to take with
respect thereto;
(ii) as soon as available and in any event within 75 days after the end
of each first quarter and within 60 days after the end of each of the
second and third quarters of each fiscal year of the Borrower (A) the
unaudited quarterly consolidated financial statements of the Borrower
and its Consolidated Subsidiaries as of the end of such quarter
(including balance sheet, statement of income and statement of cash
flows) certified by the principal financial officer or treasurer of the
Borrower, (B) the unaudited quarterly consolidated financial statements
of Grand Trunk and its consolidated Subsidiaries as of the end of such
quarter (including balance sheet, statement of income and statement of
cash flows) certified by the principal financial officer or treasurer
of Grand Trunk, (C) any reports which the Borrower is required to file
for such quarter with the Securities and Exchange Commission or the
Quebec Securities Commission, (D) a certificate of the principal
financial officer or treasurer of the Borrower stating that no Event of
Default, or event which, with the giving of notice or lapse of time or
both, would constitute an Event of Default, has occurred and is
continuing or, if an Event of Default or such event has occurred and is
continuing, a statement as to the nature thereof and the action which
the Borrower proposes to take with respect thereto, (E) a certificate
of the principal financial officer or treasurer of the Borrower
confirming, to the best of his knowledge after reasonable inquiry,
compliance with all of the covenants in Article 11 and setting forth
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in reasonable detail the computations used by the Borrower in
determining, as of the end of such fiscal quarter, compliance with the
covenants contained in Section 11.2, and (F) an unaudited quarterly
consolidated financial statement of the Target and its Subsidiaries as
of the end of any such quarter (including balance sheet, statement of
income and statement of cash flows) ending on or prior to the STB
Approval Date;
(iii) as soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower (A) the audited annual
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries containing comparative consolidated financial statements
for such year (including balance sheet, statement of income and
statement of cash flows) certified by independent chartered accountants
of recognized national standing, (B) the unaudited annual consolidated
financial statements of Grand Trunk and its consolidated Subsidiaries
for such year (including balance sheet, statement of income and
statement of cash flows) certified by the principal financial officer
or treasurer of Grand Trunk, (C) the unaudited annual consolidated
financial statements of each of the Guarantors (other than Grand Trunk)
and their consolidated Subsidiaries, if any, for such year (including
balance sheet, statement of income and statement of cash flows)
certified by the principal financial officer or treasurer of each of
such Guarantors respectively, (D) any reports which the Borrower is
required to file with the Securities and Exchange Commission or the
Quebec Securities Commission, (E) a certificate of the principal
financial officer or treasurer of the Borrower stating that no Event of
Default, or event which, with the giving of notice or lapse of time or
both, would constitute an Event of Default, has occurred and is
continuing, or if an Event of Default or such an event has occurred and
is continuing, a statement as to the nature thereof and the action
which the Borrower proposes to take with respect thereto, (F)
certificate of the principal financial officer or treasurer of the
Borrower confirming, to the best of his knowledge after reasonable
inquiry, compliance with all of the covenants in Article 11 and setting
forth in reasonable detail the computations used by the Borrower in
determining, as of the end of such fiscal year, compliance with the
covenants contained in Section 11.2, and (G) the audited annual
consolidated financial statements of the Target and its Subsidiaries
containing comparative consolidated financial statements for any such
year (including balance sheet, statement of income and statement of
cash flows) ending on or prior to the STB Approval Date certified by
independent chartered accountants of recognized national standing; and
(iv) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any of its Subsidiaries, as
any Lender, through the Administrative Agent, may from time to time
reasonably request;
11.1.3 as soon as possible, and in any event within five (5) Business
Days after the Borrower or any of its Subsidiaries has received notice of the
commencement thereof, give notice to the Administrative Agent of any litigation,
proceeding or dispute affecting the Borrower or any of its Subsidiaries or its
property before any court, tribunal, commission or other administrative agency
which could have a Material Adverse Effect; from time to time, the Borrower
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shall provide all reasonable information requested by the Administrative Agent
concerning the status of any such litigation, proceeding or dispute;
11.1.4 promptly cause to be paid and discharged all lawful and material
Taxes assessed against the Borrower or any of its Subsidiaries or imposed upon
the income and profits of, or upon any property belonging to, the Borrower or
any of its Subsidiaries, before the same shall become in default, as well as all
lawful and material claims for labor, materials and supplies which, if unpaid,
might become a Lien other than a Permitted Encumbrance upon such property or any
part thereof, provided, however, that the Borrower shall not be required to
cause to be paid and discharged any such Tax as long as the amount or validity
thereof shall be contested in good faith by appropriate proceedings and the
Borrower or such Subsidiary, as the case may be, shall set aside on its books
reserves with respect thereto that the Borrower and the independent chartered
accountants who are at the time employed to audit the books and accounts of the
Borrower or such Subsidiary consider adequate;
11.1.5 at all times cause to be carried and maintained types and
amounts of insurance in respect of the Borrower and its Material Subsidiaries'
material buildings, plants, equipments (other than rolling stock) and other
material property on a replacement cost basis for partial losses and on a
depreciated replacement cost basis for total losses, including, without
limitation, property insurance and public liability insurance, in such amounts,
for such risks, on such terms (including self-insured retention), with such
endorsements and with such insurance companies as are at least comparable to
industry standards for Class I railroads, subject to availability; the Borrower
represents that it carries, as of the date hereof, C$288,000,000 liability
policies in excess of a C$5,000,000 self-insured retention and C$200,000,000
"all risks" property policies in excess of a C$2,500,000 self-insured retention;
the Borrower shall deliver in due course to the Administrative Agent
certificates of insurance from the Borrower's insurers confirming the insurance
coverage;
11.1.6 at all times keep, and cause each of its Subsidiaries to keep,
true and complete books and records and accounts in accordance with generally
accepted accounting principles; in respect of Subsidiaries of the Borrower in
the United States, such generally accepted accounting principles shall be as
applied from time to time in the United States;
11.1.7 permit the Administrative Agent by its representatives and
agents, after reasonable notice, to visit or inspect any of its or its Material
Subsidiaries' properties, including, without limitation, corporate books,
computer files and tapes and financial records, to examine and make copies of
its books of accounts and other financial records and to discuss its affairs,
finances and accounts with, and to be advised as to the same by, their
respective senior officers at such reasonable times during normal business hours
and intervals as the Administrative Agent may designate but subject always to
the security requirements of the Borrower or its Subsidiaries in effect from
time to time;
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11.1.8 at all times cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and the corporate
existence of each of its Material Subsidiaries;
11.1.9 conduct, and cause each of its Material Subsidiaries to conduct,
its business substantially as presently conducted; and keep in full force and
effect its material rights and franchises except where failure to do so could
not have a Material Adverse Effect; provided that nothing in this Section 11.1.9
shall be construed to prohibit the Reorganization or the Merger;
11.1.10 operate, maintain and preserve, and cause each of its Material
Subsidiaries to operate, maintain and preserve, in good repair, working order
and condition (ordinary wear and tear excepted), all its and their material
properties necessary for the proper conduct of its or their business;
11.1.11 within sixty (60) days following the end of each fiscal year
end, provide to the Administrative Agent in sufficient copies for each Lender,
the Borrower's annual business plan outlining financial forecasts for the then
current fiscal year, such forecasts to include balance sheet, income statement
and statement of cash flows for such fiscal year including planned capital
expenditures and assumptions used in such forecast;
11.1.12 within ten (10) Business Days of any Person becoming a Material
Subsidiary, notify the Administrative Agent that such a Person has become a
Material Subsidiary and furnish the Administrative Agent with all details
thereof such as name, date and jurisdiction of incorporation, names of
shareholders and percentages of ownership, description of businesses and
addresses and shall further cause to be delivered to the Lenders joinder
agreements in form and substance substantially as set out in Schedule 11.1.12
annexed hereto duly executed in favor of the Lenders by each such Material
Subsidiary to the extent permitted by Law, pursuant to which the payment and
performance of all of the Borrower's obligations under this Agreement are
guaranteed (or, in the event that a Material Subsidiary organized pursuant to
the laws of Canada or a province thereof is not permitted by Law to guarantee
the payment and performance of all of the Borrower's obligations under this
Agreement, a joinder agreement in form and substance satisfactory to the
Administrative Agent duly executed in favor of the Lenders by such Material
Subsidiary to the extent permitted by Law, pursuant to which the payment and
performance of all of the obligations of a Guarantor under this Agreement are
guaranteed by such Material Subsidiary), together with a favorable legal opinion
in form and substance satisfactory to the Lenders in respect of such Material
Subsidiary and such guarantee; provided that Borrower shall not be obligated to
cause Target and its Subsidiaries to deliver such joinder agreements until ten
(10) Business Days after the later of the STB Approval Date and the Merger Date;
11.1.13 ensure at all times that the consolidated Tangible Net Worth of
the Borrower and its Material Subsidiaries represents at least 90% of the
consolidated Tangible Net Worth of the Borrower and its Consolidated
Subsidiaries;
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11.1.14 advise the Administrative Agent, as soon as it becomes aware of
(i) any change or effect which has or could have a Material Adverse Effect or
(ii) any breach of a representation or warranty in Article 2 which would occur
during the period from the STB Approval Date to the date 90 days thereafter if
the Target and its Subsidiaries were deemed "Subsidiaries" of the Borrower
during such period, such advice to be accompanied with all reasonable details
thereof;
11.1.15 deliver to the Administrative Agent if and when the Borrower or
any ERISA Affiliate of the Borrower (i) gives or is required to give notice to
the PBGC of any Reportable Event with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows that
the plan administrator of any Plan has given or is required to give notice of
any such Reportable Event, a copy of the notice of such Reportable Event given
or required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer, any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Code, a copy of such application; (v) gives notice of intent
to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to
make any payment or contribution to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the imposition of a Lien or
the posting of a bond or other security, a certificate of the chief financial
officer or the treasurer of the Borrower setting forth details as to such
occurrence and action, if any, which the Borrower or applicable ERISA Affiliate
of the Borrower is required or proposes to take; provided that no such
certificate shall be required unless the aggregate unpaid actual or potential
liability of the Borrower and the ERISA Affiliates involved in all events
referred to in clauses (ii) through (vii) above of which the said officer of the
Borrower has obtained knowledge and has not previously reported under this
paragraph, exceeds C$50,000,000; and
11.1.16 no later than five (5) Business Days prior to the proposed date
on which a Guarantor shall become a Borrower hereunder, notify the
Administrative Agent that such Guarantor intends to become a Borrower on such
date. Such Guarantor shall cause to be delivered to the Lenders on such date a
joinder agreement in form and substance substantially as set out in Schedule
11.1.16 annexed hereto duly executed in favor of the Lenders by such Guarantor
and each other Borrower and Guarantor hereunder to the extent permitted by Law,
pursuant to which (i) such Guarantor shall agree to be bound by this Agreement
as a borrower and to assume and perform its obligations as a borrower hereunder
as if it were the Borrower hereunder on the date hereof, except that such
Guarantor's obligations as a Borrower shall be limited to such Guarantor's
Borrowings hereunder made on and after such date and (ii) each Guarantor
(including Canadian National Railway Company) shall guarantee the payment and
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performance of all of such new Guarantor's obligations as Borrower under this
Agreement (or, in the event that any such Guarantor organized pursuant to the
laws of Canada or a province thereof is not permitted by Law to guarantee the
payment and performance of all of such Borrower's obligations under this
Agreement, such Guarantor shall execute a joinder agreement in form and
substance satisfactory to the Administrative Agent duly executed in favor of the
Lenders by such Guarantor to the extent permitted by Law, pursuant to which such
Guarantor shall guarantee the payment and performance of all of the obligations
of another Guarantor under this Agreement), together with a favorable legal
opinion in form and substance reasonably satisfactory to the Administrative
Agent in respect of such Guarantor as a Borrower and such guarantees.
11.2 Financial Covenants
So long as any amount owing hereunder remains unpaid or any Lender has
any Commitment under this Agreement, and unless consent is given in accordance
with Section 15.12, the Borrower shall:
11.2.1 maintain at all times during each of its fiscal quarters ending
after April 1, 1998 a consolidated Tangible Net Worth of at least an amount
equal to the sum of C$3.6 billion plus 50% of all positive Net Profits, if any,
accruing on a cumulative basis from April 1, 1998 plus 50% of the net proceeds
of equity issues after the Closing Date (including equity issuances in
connection with the Merger), if any, accruing on a cumulative basis from the
Closing Date, in all cases based upon the most recent financial statements of
the Borrower and its Consolidated Subsidiaries;
11.2.2 ensure that at all times during each fiscal quarter ending
during any of the periods set forth below, the sum of (x) Total Debt plus (y)
the obligations of the Borrower and its Subsidiaries with respect to any
securitization or monetization financing, as a percentage of Total
Capitalization, does not exceed the correlative percentage indicated below, in
all cases based upon the then most recent financial statements of the Borrower
and its Consolidated Subsidiaries:
============================================================================
Maximum Total Debt to
Period Total Capitalization
- ----------------------------------------------------------------------------
Closing Date - 12/31/98 60%
- ----------------------------------------------------------------------------
01/01/99 - 12/31/99 58%
- ----------------------------------------------------------------------------
01/01/00 and thereafter 55%
============================================================================
11.2.3 maintain as at the end of each fiscal quarter ending during any
of the periods set forth below, a Fixed Charge Coverage Ratio (calculated (a)
for each such fiscal quarter ending during the period from April 1, 1998 to
September 30, 1999, on a cumulative basis for the period from and including
April 1, 1998 to and including the last day of the fiscal quarter then most
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recently ended, and (b) for each such fiscal quarter ending after September 30,
1999, on a rolling six-fiscal quarter basis) of not less than the correlative
ratio indicated below, in all cases based upon the then most recent financial
statements of the Borrower and its Consolidated Subsidiaries:
============================================================================
Minimum Fixed Charge
Period Coverage Ratio
- ----------------------------------------------------------------------------
04/01/98 - 12/31/98 1.85:1.0
- ----------------------------------------------------------------------------
01/1/99 and thereafter 2.00:1.0
============================================================================
; provided, however, the covenant in this Section 11.2.3 shall not apply at any
time when the Public Debt Rating of the Borrower by S&P is BBB+ or higher or by
Moody's is Baal or higher.
Calculations under this Section 11.2 of Tangible Net Worth and Total
Capitalization for any date shall be made on a pro forma basis assuming, in each
case, that the Merger was consummated on the Closing Date and that the equity to
be issued under the Merger Agreement in connection with the Merger has been
issued on such date, and that no shares of capital stock of Target are subject
to the Voting Trust. Calculations under this Section 11.2 of the Fixed Charge
Coverage Ratio (and related definitions) for any period shall be made on a pro
forma basis assuming, in each case, that the Merger was consummated on the first
day of such period and that no shares of capital stock of Target are subject to
the Voting Trust at any time during such period. Notwithstanding the foregoing,
if the Merger Agreement has terminated prior to the consummation of the Merger
or the Merger is otherwise abandoned and no Event of Default shall occur as a
result thereof, then the foregoing calculations shall not be made on a pro forma
basis and shall be based on the most recent financial statements of the Borrower
and its Consolidated Subsidiaries delivered to the Lenders hereunder.
11.3 Merger and Voting Trust Covenants
So long as any amount owing hereunder remains unpaid or any Lender has
any Commitment under this Agreement, and unless consent is given in accordance
with Section 15.12, the Borrower shall:
11.3.1 until consummation of the Merger, cause Merger Sub to engage in
only those activities that are necessary or advisable to effect the Tender Offer
upon the terms set forth in the Tender Offer Materials, to effect the Merger and
to effect the transactions contemplated by this Agreement and the Merger
Agreement;
11.3.2 comply with and cause Merger Sub to comply in all material
respects with all covenants set forth in the Merger Agreement applicable prior
to the consummation of the Merger;
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11.3.3 comply with and cause Merger Sub to comply in all material
respects with all covenants set forth in the Voting Trust Agreement applicable
prior to the STB Approval Date; and
11.3.4 use best efforts to cause the Merger to be consummated in
accordance with the terms and conditions of the Merger Agreement and the Tender
Offer Materials as soon as practicable and in accordance with applicable
securities laws and regulations and, in any event, no later than the first
anniversary of the Initial Funding Date.
11.4 Negative Covenants
So long as any amount owing hereunder remains unpaid or any Lender has
any Commitment under this Agreement and, unless consent is given in accordance
with Section 15.13, Borrower shall not:
11.4.1 except as permitted by clauses (i) through (x) of Section
11.4.2, enter into, or permit any of its Subsidiaries to enter into, any
transaction (whether by way of reconstruction, reorganization, consolidation,
amalgamation, arrangement, merger, transfer, sale, lease or otherwise) whereby
all or substantially all of its business, property and assets would become the
property of any other Person, or in the case of any such amalgamation,
arrangement (if applicable) or merger, of the continuing company resulting
therefrom except that (a) any Wholly-owned Subsidiary may merge, consolidate or
amalgamate with or into the Borrower or another Wholly-owned Subsidiary, (b) any
Wholly-owned Subsidiary may merge with a third party carrying on a business
similar or in support of the railway business in a transaction in which the only
consideration paid by the Borrower or such Wholly-owned Subsidiary is common
stock of the Borrower; (c) a Wholly-owned Subsidiary may be liquidated and its
assets distributed to one or more Wholly-owned Subsidiaries and/or the Borrower;
(d) the Borrower or any "Borrower" under the US Credit Agreement may merge or
consolidate with any Person carrying on a business similar or in support of the
railway business so long as (i) in the case of the Borrower, the Borrower is the
surviving entity and in the case of a "Borrower" under the US Credit Agreement,
the surviving entity (which shall be an entity organized in the United States)
shall have succeeded to the obligations of such borrower under the US Credit
Agreement and executed such instruments and documents as Administrative Agent
shall deem necessary or advisable to evidence such succession, and (ii) the
consolidated Tangible Net Worth of the Borrower immediately following such
merger or consolidation is greater than or equal to the consolidated Tangible
Net Worth of the Borrower immediately prior to such merger or consolidation; (e)
Merger Sub may merge with and into Target in the manner contemplated by the
Related Agreements and the Tender Offer Materials; (f) the Borrower and CNR
Properties may consummate the Reorganization; (g) the Borrower and its
Subsidiaries may consummate sales and other dispositions of stock of Target to
the extent required by a United States Governmental Authority; and (h) the
Borrower and its Subsidiaries may consummate any disposition expressly permitted
by Section 11.4.2; provided, however, that in each of said cases (a) through
(d), (i) immediately prior to the consummation of such merger, consolidation,
amalgamation or liquidation, no Event of Default or event which, with the giving
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of notice or lapse of time, or both, would constitute an Event of Default, shall
have occurred and be continuing, (ii) no condition or event shall exist in
respect of the Borrower after giving full effect to such merger, consolidation,
amalgamation or liquidation which constitutes or would, with the giving of
notice or lapse of time, or both, constitute an Event of Default, and (iii) all
of the representations and warranties contained in Article 2, except for Section
2.1.3 and Sections 2.1.14, 2.1.21, 2.1.22, 2.1.26 and 2.1.27, and except that
clause (i) of Section 2.1.7 shall be read as if it referred to the most recent
financial statements of the Borrower delivered by the Borrower to the
Administrative Agent pursuant to Section 11.1.2 and the date in Section 2.1.17
shall be the last day of the most recent fiscal year for which the Borrower has
furnished its audited annual consolidated statements to the Administrative Agent
pursuant to Section 11.1.2, shall be true and correct in all material respects
on and as of the date of such merger, consolidation, amalgamation or liquidation
as though made on and as of such date;
11.4.2 sell, exchange, lease, release or abandon or otherwise dispose
of, or permit any of its Subsidiaries to sell, exchange, lease, release or
abandon or otherwise dispose of, any assets to any Person other than:
(i) sales and transfers of assets among the Borrower and its
Subsidiaries or as between any Subsidiaries at fair market value; sales
of inventory in the ordinary course of business;
(ii) sales or other dispositions of Permitted Investments of the type
described in clauses (a) through (f) of the definition of Permitted
Investments in Section 1.1;
(iii) sales, exchanges, leases, releases, abandonments or other
dispositions of obsolete equipment, scrap or surplus material and
supplies and other properties of the Borrower and its Subsidiaries
which have no material economic value; any lease and/or rental by the
Borrower or any of its Subsidiaries of surplus assets temporarily not
being used by the Borrower or any of its Subsidiaries, provided the
Borrower or such Subsidiary at all times retains title to such assets;
(iv) sales, exchanges, leases, releases, abandonments or other
dispositions pursuant to the restructuring and network rationalization
as presented in the Borrower's most recent annual business plan
provided to the Administrative Agent, in any case not to exceed 3,500
miles of rail lines in the aggregate after the Closing Date, and sales
exchanges, leases, releases, abandonments or other dispositions of
non-rail real estate assets;
(v) (1) the disposition of Excluded Subsidiaries (including by
liquidation, dissolution, winding up or surrender of charter); and (2)
dispositions pursuant to the Reorganization;
(vi) any bona fide sales, exchanges or other dispositions (including,
without limitation, dispositions by way of merger, amalgamation or
otherwise) at fair market value and provided that fair market value of
all such sales, exchanges or other dispositions does not
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exceed in the aggregate in any fiscal year of the Borrower an amount
equal to two percent (2%) of the Borrower's consolidated Tangible Net
Worth, based upon the audited financial statements of the Borrower and
its Consolidated Subsidiaries as at the end of the preceding fiscal
year of the Borrower (and calculated on a pro forma basis giving effect
to the Merger);
(vii) securitizations or monetizations of assets in the ordinary course
of business of the Borrower or its Subsidiaries; or sale leasebacks
entered into by the Borrower and/or its Subsidiaries (including the
circumstance where one such party is seller and one such party is the
lessee); or the sale, transfer or assignment by the Borrower or its
Subsidiaries of rights under purchase agreements;
(viii) until the Merger Date, the sale or assignment by Merger Sub of
any shares of Target Common Stock owned by it that are in excess of the
Minimum Shares (but only to the extent of such excess) for cash and for
fair market value;
(ix) (1) any sale or disposition of any assets or business of Target
and its Subsidiaries or of any stock of Target required by a United
States Governmental Authority; provided that the sole consideration
received in connection with any such sale or other disposition of stock
or assets or business of Target shall be cash; (2) any grant of
trackage, haulage, switching or running rights or similar rights over
any rail line or with respect to any rail facility of the Borrower or
of any Subsidiary of the Borrower or of Target or any Subsidiary of
Target, or any sale or lease of such line or facility subject to
retained trackage rights, which will, in the reasonable judgment of the
Borrower, facilitate obtaining a final order of the STB approving the
Borrower's acquisition of control of Target and its Subsidiaries, and
which will be consummated or become effective only if any when such
order becomes effective; (3) any grant of trackage, haulage, switching
or running rights or similar rights to third parties in the ordinary
course of business or required by applicable Law; and (4) dispositions
by Merger Sub of common stock of the Borrower in payment of
consideration pursuant to the Merger Agreement;
(x) sales, exchanges, leases, releases, abandonments or other
dispositions with the prior written consent of Majority Lenders;
provided, however, that in each of said cases (iv), (v), (vi) and (vii), on the
date thereof and immediately thereafter no Event of Default, or event which
would constitute an Event of Default but for the requirement that notice be
given, or time elapse, or both, shall have occurred and be continuing.
11.4.3 other than as outlined in its annual business plan submitted to
the Lenders, make, or permit any of its Subsidiaries to make, any Investments,
other than Permitted Investments, the Acquisition of the Target Common Stock
pursuant to the Tender Offer and the Merger and any intercompany loans made in
connection therewith;
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11.4.4 effect or allow any of its Subsidiaries to effect any Hostile
Acquisition;
11.4.5 create, incur, assume or suffer to exist or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien on any of
their respective present or future assets or revenues other than (x) Permitted
Encumbrances, and (y) until the Merger Date, Merger Sub may directly or
indirectly sell, assign, pledge or encumber any shares of Target Common Stock
owned by it that are in excess of the Minimum Shares (but only to the extent of
such excess) for cash and for fair market value; it being understood that the
Voting Trust and the provisions thereof do not constitute a "Lien" on the shares
of capital stock of Target subject thereto;
11.4.6 in the case of the Borrower, its Subsidiaries and each of the
Guarantors, materially change the nature of their respective businesses;
11.4.7 violate, or permit any of its Subsidiaries to violate, any Law
(including, without limitation, ERISA and any applicable Environmental Laws),
the violation of which could have a Material Adverse Effect;
11.4.8 after the Initial Funding Date (i) agree or permit Merger Sub to
agree to any amendment to, or waive or permit Merger Sub to waive, any of its
rights under, any Related Agreement or terminate or agree to terminate any
Related Agreement, or (ii) agree or permit Merger Sub to agree to any amendment
to the Tender Offer Materials, if the effect of any such amendment, waiver or
termination (as applicable) referred to in clause (i) or (ii) would be (w) to
increase the consideration payable per share of Target Common Stock, (x) to
increase the aggregate amount of cash consideration to be paid by Merger Sub in
connection with the Tender Offer and the Merger, (y) to decrease the number of
shares constituting Minimum Shares set forth in the condition with respect to
the minimum number of shares to be validly tendered, or (z) otherwise materially
adverse to the Lenders, without in each case obtaining the prior written consent
of Majority Lenders to such amendment, waiver or termination; and
11.4.9 permit Grand Trunk or any of its other Subsidiaries (i) to amend
or otherwise change the terms of any of the US Credit Documents described in
clauses (i) through (vii) of the second sentence of Section 15.13 thereof, or
make any payment consistent with such an amendment thereof or such a change
thereto, without the prior written consent of all Lenders under this Agreement,
or (ii) to amend or otherwise change the terms of any of the US Credit
Documents, or make any payment consistent with an amendment thereof or a change
thereto not described in clause (i), without the prior written consent of
Majority Lenders.
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ARTICLE 12
DEFAULT
12.1 Events of Default
The occurrence of any of the following events shall constitute an Event
of Default under this Agreement:
12.1.1 the Borrower shall fail to make any payment of principal on the
Loan or the Bid Loan when due, whether due by acceleration or otherwise; or
12.1.2 the Borrower shall fail to make any payment of interest, fees or
other payment (other than a payment referred to in Section 12.1.1) due under
this Agreement within five (5) Business Days of its due date, whether due by
acceleration or otherwise; or
12.1.3 any representation, warranty, statement or certificate made or
delivered to any Lender or to the Administrative Agent in writing or any
representation or warranty deemed pursuant to Section 2.2 or Section 10.2 to
have been made to the Administrative Agent or any Lender or any financial
statement or other information delivered in writing to the Administrative Agent
or any Lender by the Borrower or any of the Guarantors or any of their officers
in, or in connection with, this Agreement is incorrect or misleading in any
material respect; or
12.1.4 the Borrower or any of the Guarantors shall fail to perform,
observe or comply with any of the covenants contained in Section 11.1.2(i), 11.2
or 11.3; or
12.1.5 the Borrower or any of the Guarantors shall fail to perform,
observe or comply with any other term, covenant or agreement contained in this
Agreement on its part to be performed, observed or complied with and such
failure shall remain unremedied for a period of thirty (30) days following
notice thereof by the Administrative Agent to the Borrower; or
12.1.6 if a change of control occurs for any Material Subsidiary other
than as permitted pursuant to Sections 11.4.1 and 11.4.2 or if any Person gains
control of the Borrower; or
12.1.7 the Borrower or any of its Subsidiaries shall fail to pay any of
its Indebtedness (other than that referred to in Sections 12.1.1 and 12.1.2) or
any interest or premium thereon, when due (whether at scheduled maturity or by
required prepayment, acceleration, demand or otherwise), the amount of which
individually or in the aggregate at any time exceeds C$50,000,000 and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness unless, in respect of
Indebtedness other than for borrowed money or Guarantees for borrowed money, the
Borrower or any of its Subsidiaries, as the case may be, is contesting such
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failure diligently and in good faith and in respect of which no final
non-appealable judgment or order for the payment of money has been rendered and
no execution proceedings have been commenced and are unstayed; or any other
default which has not been cured or waived under any agreement or instrument
relating to any such Indebtedness, the amount of which individually or in the
aggregate at any time exceeds C$50,000,000, of the Borrower or any of its
Subsidiaries, or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such default or event is to accelerate, or to permit the
acceleration of the maturity of such Indebtedness; or any such Indebtedness, the
amount of which individually or in the aggregate at any time exceeds
C$50,000,000, shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; or any Event of Default (as defined in the US Credit
Agreement) shall occur and be continuing, if at such time the US Credit
Agreement shall not have terminated; or
12.1.8 a final non-appealable judgment or order for the payment of
money be rendered against the Borrower or any of its Subsidiaries such judgment
or order shall continue unsatisfied and unstayed (or shall not have been
vacated) for a period of thirty (30) consecutive days unless such judgment or
order could not have a Material Adverse Effect; or
12.1.9 (i) a Reportable Event or a failure to make a required
instalment or other payment (within the meaning of Section 412(n) of the Code or
Section 302(f) of ERISA) shall have occurred with respect to any Plan or Plans
of the Borrower or any of its ERISA Affiliates that, in the reasonable opinion
of the Majority Lenders, is likely to result in (A) the termination of such Plan
or Plans, (B) the appointment of a trustee by a United States District Court to
administer such Plan or Plans, or (C) the imposition of a Lien or other
encumbrance in favor of a Plan or the PBGC; or (ii) a trustee shall be appointed
by a United States District Court to administer any Plan; or (iii) the
withdrawal of the Borrower or any of its ERISA Affiliates from a Plan during a
plan year in which it was a "substantial employer" as defined in Section
4011(a)(2) of ERISA; or (iv) the filing by the Borrower or any of its ERISA
Affiliates of a notice of intent to terminate a Plan or the institution of other
proceedings to terminate a Plan; or (v) the PBGC shall have instituted
proceedings to terminate, or to cause a trustee to be appointed to administer,
any Plan of the Borrower or any of its ERISA Affiliates; or (vi) any Person
engages in a Prohibited Transaction with respect to any Plan which results in or
could result in liability of the Borrower or any of its ERISA Affiliates, any
Plan of the Borrower or any of its ERISA Affiliates or fiduciary of any such
Plan; or (vii) the Borrower or any of its ERISA Affiliates shall, or in the
reasonable opinion of the Majority Lenders is likely to, incur any liability in
connection with a withdrawal from, or the insolvency or reorganization of, a
Multiemployer Plan; and, in each case above, such event or condition, together
with all other such events or conditions, if any, could reasonably be likely to
subject the Borrower or any of its ERISA Affiliates to any Tax, penalty or other
liability which in the aggregate may exceed C$50,000,000; or
12.1.10 (i) the Merger shall not have been consummated on or prior to
the first anniversary of the Initial Funding Date, (ii) the Merger, if
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consummated, shall be unwound, reversed or otherwise rescinded in whole or in
part for any reason, or (iii) prior to the Merger Date, any party to the Merger
Agreement shall have taken action to terminate the Merger Agreement; provided,
however, that the occurrence of any of the events described in this Section
12.1.10 shall not constitute an Event of Default if on or prior to the first
anniversary of the Initial Funding Date (x) all outstanding Term Loans and US
Term Loans shall have been repaid and (y) the Revolving Loan Commitments and the
commitments to make US Revolving Loans under the US Credit Agreement (and all
outstanding Revolving Loans and US Revolving Loans) shall have been permanently
reduced and repaid on a pro rata basis (according to the initial amounts
thereof) to an aggregate amount not exceeding US$500,000,000 or the Equivalent
Amount in CDollars; or
12.1.11 the Borrower or any Material Subsidiary shall not pay its debts
generally as such debts become due, or shall admit in writing its inability to
pay its debts generally as they become due, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be commenced or instituted
by or against the Borrower, or any Material Subsidiary seeking to adjudicate it
bankrupt or insolvent, or seeking winding-up, reorganization, arrangement,
adjustment, dissolution, protection, relief, liquidation or composition of it or
its debt under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking appointment of a receiver, trustee, sequestrator
or other similar official for it or for any substantial or material part of its
property or seeking the suspension of the operations of the Borrower or any
Material Subsidiary and, in the case of any such proceeding instituted against
the Borrower or any Material Subsidiary and in respect of which the Borrower or
any Material Subsidiary has not by any act indicated its consent to, approval
of, or acquiescence in, such proceeding, such proceeding shall remain
undismissed for a period of sixty (60) days; or the Borrower, or any Material
Subsidiary shall take corporate action to authorize any of the actions set forth
above in this Section 12.1.11; or
12.1.12 at any time prior to the later of the STB Approval Date and the
Merger Date the Target shall fail to perform, observe or comply with any of the
covenants contained in Section 6 of the Merger Agreement and such failure could
reasonably be expected to result in a Material Adverse Effect; provided,
however, that such failure shall not constitute an Event of Default (i) if such
failure would not, if Target were a Subsidiary of the Borrower for all purposes
hereunder, constitute an Event of Default under any other Section of this
Article 12, and (ii) unless such failure shall remain unremedied for a period of
thirty (30) days.
12.2 Effect of a Default
Upon the occurrence and during the continuation of any Event of
Default, the Administrative Agent shall at the request, or may with the consent,
of the Majority Lenders, by notice to the Borrower (i) declare the obligation of
the Lenders to make Advances or Bid Advances to the Borrower to be terminated,
whereupon the same shall forthwith terminate, and/or (ii) declare the Loan and
the Bid Loan, all interest accrued and unpaid thereon and all other amounts
payable under this Agreement to be forthwith due and payable, whereupon the Loan
and the Bid Loan, all such accrued interest and all such other amounts shall
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become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower and each of the Guarantors. Thereupon the Borrower shall immediately
pay to the Administrative Agent all such amounts due and payable. In addition to
the foregoing, in the event of the institution of any proceeding against the
Borrower or a Material Subsidiary or the Borrower or any Material Subsidiary
making an assignment for the general benefit of creditors or otherwise
voluntarily initiating any proceeding in respect of its property or creditors
under any Law relating to bankruptcy, insolvency or organization or relief of
debtors the effect of which is to cause an automatic stay to come into effect
with respect to the Borrower or a Material Subsidiary or an actual or deemed
entry of an order for relief with respect to any proceeding instituted by or
against the Borrower or a Material Subsidiary under the U.S. Federal Bankruptcy
Code, the Bankruptcy and Insolvency Act (Canada) or the Companies' Creditors
Arrangement Act (Canada) (as amended, supplemented or replaced from time to
time), as may be applicable, or any other applicable bankruptcy or insolvency
laws which provide for an automatic stay, the obligation of each Lender to make
Advances or Bid Advances shall automatically be terminated and the Loan and the
Bid Loan, all interest accrued and unpaid thereon and all other amounts payable
under this Agreement shall automatically become due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower and each of the Guarantors. For greater
certainty, the Borrower and each of the Guarantors will be considered to be in
default of their obligations hereunder by the mere lapse of time provided herein
for performing such obligations, without any requirement of further notice or
other act of the Administrative Agent or the Lenders unless a notice is
specifically required hereunder.
12.3 Remedies Cumulative; No Waiver
For greater certainty, it is expressly understood and agreed that the
rights and remedies of the Lenders and the Administrative Agent under this
Agreement are cumulative and are in addition to, not in substitution for, any
rights or remedies provided by law; no failure on the part of the Lenders or the
Administrative Agent to exercise, and no delay in exercising, any right or
remedy hereunder or thereunder shall operate as a waiver thereof, nor shall any
single or partial exercise by the Lenders or the Administrative Agent of any
right or remedy for a default or breach of any term, covenant, condition or
agreement herein contained prejudice or preclude any other or further exercise
thereof or the exercise of any other right or remedy for the same or any other
default or breach and shall not waive, alter, affect or prejudice any other
right or remedy.
12.4 Set-Off
In addition to, and not in limitation of, any rights now or hereafter
granted under applicable Law, each Lender is hereby expressly authorized (but
not obliged), at any time or from time to time upon the occurrence and during
the continuation of an Event of Default, to set off or compensate and to
appropriate and to apply any and all deposits, general or special, matured or
unmatured, and any other Indebtedness at any time held by or owing by such
Lender to, or for the credit of, or the account of, the Borrower or any of the
Guarantors against and on account of the obligations and liabilities of the
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Borrower or each of the Guarantors due and payable to such Lender under this
Agreement including, without limitation, all claims of any nature or description
arising out of, or connected with, this Agreement, irrespective of whether or
not any demand therefor has been made and although such obligations and
liabilities of, or claims against, the Borrower or any of the Guarantors, are
contingent or unmatured. Each Lender shall upon any such set-off, compensation
or appropriation give immediate notice to the Administrative Agent and the other
Lenders and thereafter give notice to the Borrower.
ARTICLE 13
NOTICE
13.1 Notices, Etc.
All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing to the party for whom it is
intended and shall be mailed, sent or delivered, to such party at its address
set forth below with its signature or shall be sent by telecopier or other means
of rapid communication at its rapid communication address set forth below with
its signature, or at such other address or rapid communication address as shall
be designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective (i) if mailed, three (3)
Business Days after deposited in the mail, first class, postage prepaid, (ii) if
delivered, when delivered and (iii) if sent by telecopier or other means of
rapid communication, on the date of transmission if transmitted before 3:00 p.m.
(Montreal time) on a Business Day or, in any other case, on the next following
Business Day; provided however that notices and communications to the
Administrative Agent pursuant to Article 3, Article 4, Section 5.5 and Section
7.7 hereof shall not be effective until actually received by the Administrative
Agent. In the event of a postal strike or any slow-down in the postal service,
no notice of or communication by mail shall be effective if sent during or
within five (5) Business Days prior to the commencement of, such strike or
slow-down unless it is actually received by the party to whom it is addressed
and, in such event, it shall be effective only on the date of actual receipt.
ARTICLE 14
GOVERNING LAW: JURISDICTION; JUDGMENT CURRENCY
14.1 Governing Law
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
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14.2 Jurisdiction
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY LOAN PARTY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OBLIGATIONS THEREUNDER, MAY
BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH
LOAN PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEX- CLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO SUCH LOAN PARTY AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SECTION 13.1;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH LOAN PARTY IN ANY
SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST SUCH
LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SECTION 14.2 RELATING
TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
To the extent that any Loan Party now or hereafter may be entitled, in any
jurisdiction in which proceedings may at any time be commenced with respect to
this Agreement, to claim for itself or its revenues, assets or properties any
sovereign immunity (including, without limitation, immunity from service of
process, jurisdiction, suit, judgment, counterclaim, enforcement of or execution
on a judgment, attachment prior to the judgment, attachment in aid of execution
of a judgment or other legal process), and to the extent that in any
jurisdiction there may be attributed any such sovereign immunity (whether or not
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claimed), each Loan Party hereby irrevocably undertakes not to claim and hereby
irrevocably waives any such immunity to the fullest extent permitted by law.
14.3 Judgment Currency
14.3.1 If for any purpose, including the obtaining of judgment in any
court, it is necessary to convert a sum due hereunder from the currency in which
it is payable (the "Payment Currency") into another currency (the "Judgment
Currency"), the parties hereto agree, to the fullest extent that they may
lawfully and effectively do so, that the rate of exchange used shall be that at
which, in accordance with normal banking procedures, the Administrative Agent
could purchase the Payment Currency with the Judgment Currency in the New York
foreign exchange market on the Business Day preceding the date of final
judgment.
14.3.2 The obligation of the Borrower in respect of any sum due from it
to the Lenders or the Administrative Agent hereunder shall, notwithstanding any
judgment or payment in a currency other than the Payment Currency, be discharged
only to the extent that on the Business Day following receipt by the
Administrative Agent of any sum so paid or adjudged to be so due in the Judgment
Currency the Administrative Agent may in accordance with normal banking
procedures, purchase the Payment Currency with the amount of the Judgment
Currency so paid or adjudged to be due; if the amount in the Payment Currency so
purchased is less than the sum originally due to the Lenders and the
Administrative Agent in the Payment Currency, the Borrower and each Guarantor
agrees, as a separate obligation and additional cause of action and
notwithstanding any such payment or judgment, to indemnify the Lenders and the
Administrative Agent against such loss and if the amount in the Payment Currency
so purchased exceeds the sum originally due to the Lenders and the
Administrative Agent in the Payment Currency, the Lenders and the Administrative
Agent agree to remit to the Borrower such excess.
14.3.3 The term "rate of exchange" in this Section 14.3 means the spot
rate at which the Administrative Agent, in accordance with normal practices, is
able on the relevant date to purchase the Payment Currency with the Judgment
Currency and includes any premium and costs of exchange payable in connection
with the purchase.
ARTICLE 15
THE AGENTS AND THE LENDERS
15.1 Authorization of Agents
Each Lender hereby irrevocably appoints and authorizes each of the
Arrangers, the Advisor, the Syndication Agent, the Co-Documentation Agents and
the Administrative Agent to act as its agent hereunder with such powers as are
expressly delegated to the such Agent by the terms of this Agreement and the
Intercreditor Agreement, together with such other powers as are reasonably
incidental thereto; each Lender hereby authorizes and confirms the appointment
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by Administrative Agent of Bank of Montreal as Repayment Agent under the
Intercreditor Agreement; and each Lender and Administrative Agent hereby
authorizes Repayment Agent to act as its agent in accordance with the terms of
the Intercreditor Agreement. Each Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement or, in the case of the
Administrative Agent and the Repayment Agent, in the Intercreditor Agreement. As
to any matters not expressly provided for by this Agreement, the Administrative
Agent shall act hereunder or in connection herewith in accordance with
instructions of the Majority Lenders but, in the absence of any such
instructions, the Administrative Agent may (but shall not be obliged to) take
such action as it deems it necessary to protect the rights of the Lenders, and
any such instructions and any action taken by the Administrative Agent in
accordance herewith shall be binding upon all the Lenders. Each Agent shall not,
by reason of this Agreement, or, in the case of the Repayment Agent, by reason
of the Intercreditor Agreement, be deemed to be a trustee for the benefit of any
Lender, the Borrower, the Guarantors or any other Person. None of the Agents nor
any of their respective directors, officers, employees or agents shall be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or in any certificate or other document
referred to, or provided for in, or received by any of them under, this
Agreement, for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement, or any other document referred to, or provided
for, herein or any collateral provided for hereby or for any failure by the
Borrower or any of the Guarantors to perform its obligations hereunder. The
Agents 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. None of the Agents nor any of their respective
directors, officers, employees or agents shall be responsible for any action
taken or omitted to be taken by it or them under or in connection herewith,
except for its or their own gross negligence or wilful misconduct. As of the
date on which Syndication Agent notifies the Borrower that it has concluded its
primary syndication of the Loan and Commitments, all obligations of the
Arrangers, the Advisor and the Syndication Agent, in such capacities hereunder,
shall terminate.
15.2 Agents' Responsibility
15.2.1 Each Agent shall be entitled to rely upon any certificate,
notice or other document (including any cable or telegram) 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 advisers,
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat each Lender as the holder of the
Participation in the Loan made by such Lender and as the holder of its share of
any Bid Loans and the holder of Money Market Loans made by it for all purposes
hereof unless and until an assignment or transfer has been accepted by the
Borrower and the Guarantors and the Administrative Agent in accordance with
Article 16.
15.2.2 The Administrative Agent shall not be deemed to have knowledge
of the occurrence of an Event of Default unless the Administrative Agent has
received notice from a Lender or the Borrower or a Guarantor describing such an
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Event of Default and stating that such notice is a "Notice of Default". In the
event that the Administrative Agent receives such a notice of the occurrence of
an Event of Default, the Administrative Agent shall promptly give notice thereof
to the Lenders. The Administrative Agent shall take such action with respect to
such Event of Default as shall be directed by the Majority Lenders, provided
that, unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obliged to) take such
action, or refrain from taking such action, with respect to such an Event of
Default as it shall deem advisable in the best interest of the Lenders.
15.2.3 The Agents shall have no responsibility (i) to the Borrower or
any of the Guarantors on account of the failure of any Lender to perform its
obligations hereunder, or (iii) to any Lender on account of the failure of the
Borrower or any of the Guarantors to perform its obligations hereunder.
15.2.4 Each of the Lenders severally represents and warrants to the
Agents that it has made its own independent investigation of the financial
condition and affairs of each of the Borrower and each of the Guarantors in
connection with the making and continuation of its Participation in the Loan or
its Bid Advances or Money Market Loans hereunder and has not relied on any
information provided to such Lender by any Agent in connection herewith, and
each Lender represents and warrants to the Agents that it shall continue to make
its own independent appraisal of the creditworthiness of the Borrower and each
of the Guarantors while the Loan or any Bid Loan or any Money Market Loan is
outstanding or any Commitment is in force.
15.3 Rights of Agents as Lenders
With respect to its Commitments and its Participation in the Loan and
any Bid Loans made by it, each Agent in its capacity as a Lender shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not acting as an Agent and the terms "Lender" or "Lenders"
shall, unless the context otherwise indicates, include such Agent in its
capacity as a Lender. Each Agent may (without having to account therefor to any
Lender) accept deposits from, lend money to and generally engage in any kind of
banking, or other business with the Borrower or any of the Guarantors as if it
were not acting as an Agent.
15.4 Indemnity
The Lenders agree to indemnify each Agent (to the extent not otherwise
reimbursed by the Borrower or the Guarantors) rateably in accordance with their
respective Participation in the Loan (or, if no Advances have been made,
rateably in accordance with their respective Commitments), for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
cost, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by, or asserted against, such Agent in any way relating to
or arising out of this Agreement or any other documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
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(excluding, unless an Event of Default is apprehended or has occurred and is
continuing, normal administrative costs and expenses incidental to the
performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or of any such other documents, provided that no Lender shall be
liable for any of the foregoing to the extent they arise from such Agent's gross
negligence or wilful misconduct.
15.5 Notice by Administrative Agent to Lenders
Promptly after its receipt thereof, the Administrative Agent will
forward to each Lender a copy of each report, notice or other document required
by this Agreement to be delivered to the Administrative Agent for such Lender.
15.6 Protection of Agents
15.6.1 No Agent shall be required to keep itself informed as to the
performance or observance by the Borrower or any of the Guarantors of this
Agreement or any other document referred to or provided for herein or to inspect
the properties or books of the Borrower or any of the Guarantors. Except for
notices, reports and other documents and information expressly required to be
furnished to the Lenders by an Agent hereunder, or, in the case of the Repayment
Agent, in accordance with the Intercreditor Agreement, such Agent shall have no
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs or financial condition of the Borrower or any
of the Guarantors which may come into the possession of such Agent. Nothing in
this Agreement, or, in the case of the Repayment Agent, in the Intercreditor
Agreement, shall oblige any Agent to disclose any information relating to the
Borrower or any of the Guarantors if such disclosure would or might in the
opinion of such Agent constitute a breach of any law or duty of secrecy or
confidence.
15.6.2 Unless the Administrative Agent shall have been notified in
writing or by tested cable by any Lender prior to the date of an Advance or Bid
Advance requested hereunder that such Lender does not intend to make available
to the Administrative Agent such Lender's Participation in such Advance or Bid
Advance, the Administrative Agent may assume that such Lender has made such
Lender's Participation in such Advance or Bid Advance available to the
Administrative Agent on the date of such Advance or Bid Advance and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Lender, the Administrative
Agent shall be entitled to recover such amount (together with interest thereon
at the rate determined by the Administrative Agent as being its cost of funds in
the circumstances) on demand from such Lender or, if such Lender fails to
reimburse the Administrative Agent for such amount on demand, from the Borrower.
15.6.3 Unless the Administrative Agent shall have been notified in
writing or by cable by the Borrower prior to the date on which any payment is
due hereunder that the Borrower does not intend to make such payment, the
Administrative Agent may assume that the Borrower has made such payment when so
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due and the Administrative Agent may, in reliance upon such assumption, make
available to each Lender on such payment date an amount equal to such Lender's
pro rata share of such assumed payment. If it proves to be the case that the
Borrower has not in fact made such payment to the Administrative Agent, each
Lender shall forthwith on demand repay to the Administrative Agent the amount
made available to such Lender (together with interest at the rate determined by
the Administrative Agent as being its cost of funds in the circumstances).
15.7 Notice by Lenders to Administrative Agent
Each Lender shall endeavor to use its best efforts to notify the
Administrative Agent of the occurrence of any event which by the giving of
notice or lapse of time or both would constitute an Event of Default forthwith
upon becoming aware of such event and of any legal proceeding such Lender
intends to take against the Borrower or any of the Guarantors in virtue of this
Agreement, but no Lender shall be liable if it fails to give such notice to the
Administrative Agent.
15.8 Resignation of Administrative Agent
Subject to the appointment and acceptance of a successor Administrative
Agent (as provided below) (i) the Administrative Agent may resign at any time by
giving not less than thirty (30) days written notice thereof to the Lenders and
the Borrower, and (ii) the Administrative Agent may be removed at any time with
cause by the Majority Lenders by giving not less than thirty (30) days written
notice of their intention to do so to the Administrative Agent and the Borrower.
Upon such resignation or removal, the Majority Lenders shall have the right to
appoint a successor Administrative Agent, which, if no Event of Default has
occurred and is continuing, must be acceptable to the Borrower. If no successor
Administrative Agent shall have been so appointed by the Majority Lenders and
shall have accepted such appointment within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation or receiving of notice of
removal, then the retiring Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent which, if no Event of Default has
occurred and is continuing, must be acceptable to the Borrower.
If (i) the Total Commitment has been cancelled or terminated, (ii) the
Loan has been repaid, and (iii) the Administrative Agent has no outstanding Bid
Loans, the Administrative Agent may resign at any time by giving not less than
thirty (30) days' written notice thereof to the Lenders with outstanding Bid
Loans and the Borrower. If no agreement is reached by the parties to whom such
notice is given within such thirty (30) day period on the appointment of a
successor Administrative Agent, the Administrative Agent may appoint as a
successor Administrative Agent the Lender with the highest amount of outstanding
Bid Loans and such Lender shall become the Administrative Agent effective on
such appointment.
Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, or upon the appointment by the
Administrative Agent of a successor Administrative Agent as aforesaid, such
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successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Agreement
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 Administrative Agent.
15.9 Sharing Among the Lenders
The Lenders agree among themselves that, except as otherwise provided
for by the provisions of this Agreement, all sums received by the Administrative
Agent in its capacity as agent of the Lenders, for the ratable account of the
Lenders relative to this Agreement or any other document contemplated hereby
(whether received by voluntary payment, by the exercise of the right of set-off
or compensation or by counterclaim, cross action or as proceeds of realization
of any security) shall be shared by each Lender pro rata, in accordance with
their respective Participations and each Lender undertakes to do all such things
as may be reasonably required to give full effect to this Section 15.9. If any
sum which is so shared is later recovered from the Lender who originally
received it, each of the other Lenders shall restore its proportionate share of
such sum to such Lender, without interest.
If any Lender obtains any payment (whether voluntary, involuntary or
through the exercise of any right of set-off or compensation or by counterclaim,
cross-action or as proceeds of realization of any security) on account of the
Loan in excess of its ratable share of payments on account of the Loan obtained
by all the Lenders, such Lender shall promptly deliver such amount to the
Administrative Agent for distribution to all Lenders pro rata in accordance with
their respective Participations.
Each Lender agrees with the other Lenders that it will not, without the
prior written consent of the other Lenders, take or obtain any Lien on any
property of the Borrower or any Material Subsidiary to secure the obligations of
the Borrower or any of the Guarantors hereunder, except for the benefit of all
Lenders or as may otherwise be required by Law.
15.10 Intercreditor Agreement
Each Lender hereby further authorizes Administrative Agent and
Repayment Agent, on behalf of and for the benefit of Lenders, to enter into the
Intercreditor Agreement, and each Lender agrees to be bound by the terms of the
Intercreditor Agreement.
15.11 Provisions for the Benefit of Lenders Only
The provisions of this Article 15 relating to the rights and
obligations of the Lenders and Administrative Agent inter se shall be operative
as between the Lenders and Agents only, and the Borrower and the Guarantors
shall not have any rights or obligations under or be entitled to rely for any
purposes upon such provisions except for Sections 15.8 and 15.14.
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15.12 Amendment of Article 15
Except for such provisions of Section 15.8 and Section 15.14 that
relate to the Borrower, the provisions of this Article 15 may be amended or
added to, from time to time, by execution by the Administrative Agent and the
Lenders of an instrument in writing and such instrument in writing shall validly
and effectively amend or add to any or all of the provisions of this Article 15
affecting the Lenders without requiring the execution of such instrument in
writing by the Borrower or any of the Guarantors. Notwithstanding the foregoing
sentence, for so long as no Event of Default has occurred and is continuing, the
second and third sentences of Section 15.13 cannot be amended without the
consent of the Borrower.
15.13 Authorized Waivers, Variations and Omissions
If so authorized in writing by Majority Lenders, the Administrative
Agent may grant waivers, consents, vary the terms of this Agreement, and do or
omit to do all such acts and things in connection herewith or therewith. Except
with the prior written agreement of all the Lenders, nothing in this Section
15.13 shall authorize (i) any increase in the Total Commitment or subject the
Lenders to any additional financial or other material obligations, (ii) any
extension of the Term Loan Maturity Date, (iii) any extension of the Revolving
Loan Commitment Termination Date, (iv) any change in the definition of Majority
Lenders, (v) any reduction in any of the interest rates or fees (other than
agency fees payable to the Administrative Agent) provided for in this Agreement,
(vi) postpone any date fixed for any payment of interest or fees or (vii) any
amendments to any guarantees, security, if any, or Section 15.9 or this Section
15.13. Save as otherwise provided in Article 15 and in Section 16.1.2, all
instructions, decisions, approvals, consents or actions referred to in this
Agreement and required of the Lenders shall be made, taken or given by the
Majority Lenders. No amendment, waiver or consent shall, unless in writing and
signed by the applicable Agent in addition to the Lenders required herein to
take such action, affect the rights or duties of such Agent under this
Agreement. Notwithstanding anything in this Agreement to the contrary, (a) in
the event Majority Lenders or all Lenders shall consent to any amendment,
modification or waiver of any provision contained in Articles 2, 10, 11 or 12
(other than Sections 12.1.1, 12.1.2 and 12.1.11) of this Agreement, or the
definitions in Article 1 as used in such Articles, including without limitation
any waiver of compliance therewith as a condition to making any Advance or Bid
Advance, such amendment, modification or waiver shall not be effective
(notwithstanding approval thereof by Majority Lenders or all Lenders) with
respect to either this Agreement or the US Credit Agreement unless such
amendment, modification or waiver is effective with respect to both such
agreements and any fees which are paid by the Borrower or any of its
Subsidiaries to obtain consent to any such amendment, modification or waiver are
paid on a ratable basis to Lenders and "Lenders" (as defined in the US Credit
Agreement) who consent to such amendment, modification or waiver, and the
Lenders hereunder hereby consent to any such amendment, modification or waiver
in this Agreement and the US Credit Agreement as is necessary to give effect to
this sentence, and (b) any change in the definition of Majority Lenders or to
this Section 15.13 shall require the prior written agreement of all Lenders and
all "Lenders" as defined in the US Credit Agreement.
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15.14 Dissenting Lenders
If a Lender (in this Section 15.14 called a "Dissenting Lender")
withholds its consent or its approval following a request of the Borrower as
provided in this Agreement and, as a result, the consent of all the Lenders or
the Majority Lenders, as the case may be, cannot be obtained in connection with
such request, the Borrower may, provided at least 51% of the Lenders based on
the amount of the Total Commitment in effect from time to time have consented to
such request, by giving notice to each Dissenting Lender and to the Agent within
ten (10) days of being advised by the Administrative Agent of whether the
Lenders or the Majority Lenders, as the case may be, have consented to such
request, designate an alternate lender (which need not be an existing Lender) to
purchase an assignment in accordance with Section 16.1.7 of such Dissenting
Lender's Commitments and outstanding Loan and Bid Loan and Money Market Loans
(which alternative lender shall purchase such assignment prior to the expiry of
such ten (10) day delay) provided that no Lender shall be obligated to make any
such assignment as a result of a demand by the Borrower pursuant to this Section
15.14 unless said assignment is done on a without warranty basis and unless and
until such Dissenting Lender shall have received one or more payments from
either the Borrower or one or more assignees in an aggregate amount at least
equal to the aggregate outstanding principal amount of the Loan and Bid Loan and
Money Market Loans owing to such Dissenting Lender, together with accrued
interest thereon to the date of payment of such principal amount and all other
amounts payable to such Dissenting Lender under this Agreement. Any such
alternate lender is subject to the Administrative Agent's prior written
approval, such approval not to be unreasonably withheld. Nothing contained
herein shall be deemed to obligate any Lender or the Administrative Agent to
agree to any such request made by the Borrower.
ARTICLE 16
SUCCESSORS AND ASSIGNS
16.1 Successors and Assigns
16.1.1 This Agreement shall become effective when it shall have been
executed by the Borrower, the Guarantors, the Administrative Agent, the
Arrangers, the Advisor, the Syndication Agent and each Lender and thereafter
shall be binding upon and enure to the benefit of the Borrower, the Guarantors,
the Administrative Agent, the Arrangers, the Advisor, the Syndication Agent, the
Lenders and their respective successors and permitted assigns.
16.1.2 Neither the Borrower nor any of the Guarantors shall have the
right to assign their rights or obligations hereunder or any interest herein
without the prior written consent of all the Lenders, which consent may be
arbitrarily withheld.
16.1.3 A Lender may (i) without notice to or consent of any Person,
grant participations in its interest in the Credit to one or more Persons (each
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a "Participant"); or (ii) with the consent of the Borrower (but not the
Guarantors) which consent shall not be unreasonably withheld or delayed, assign
its rights and obligations in the Credit to one or more financial institutions
(each an "Assignee") in whole or in part, subject to the following limitations:
(w) any such Assignee shall be subject to approval by
the Administrative Agent and no such consent of the Borrower or
approval of the Administrative Agent shall be required for assignments
by a Lender to an Affiliate of such Lender or to another Lender or
during the occurrence and continuance of an Event of Default;
(x) no Lender shall assign its Commitments (except to
Affiliates of such Lender and to other Lenders) in amounts less than
US$10,000,000 (or such lesser amount as shall constitute the aggregate
amount of the Commitments and Advances of such Lender) in the
aggregate;
(y) no Lender may assign its Revolving Loan
Commitment or Term Loan Commitment or Advances except together with a
proportionate share of all Commitments and Advances held by such
Lender; and
(z) notwithstanding anything to the contrary
contained herein, no Lender may assign its interest in the Credit
except to a resident of Canada within the meaning of the Income Tax Act
(Canada).
Except in the case of an Assignee which has delivered an assumption agreement
pursuant to Section 16.1.7, the Participant or Assignee shall not have any
rights under this Agreement (such Person's rights against such Lender in respect
of such participations and assignments to be those set forth in the agreement
executed by such Lender in favor of such Person relating thereto and such Person
shall not constitute a "Lender" hereunder). With respect to all such
participations (i) the obligations under this Agreement of each Lender selling a
participation interest hereunder shall remain unmodified and fully effective and
enforceable against such Lender, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the party entitled to receive payments for all
purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
(v) such Lender shall not grant to its Participant(s) any rights to consent or
withhold consent to any action taken by such Lender or the Administrative Agent
under this Agreement other than action requiring the consent of all of the
Lenders hereunder.
16.1.4 Subject to Section 16.1.9, the Lenders may deliver a copy of any
financial statement or any other information relating to the business, assets or
condition (financial and otherwise) of the Borrower and its Subsidiaries or the
Guarantors which may be furnished to them under this Agreement or otherwise to
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any prospective or other Participant or Assignee to the extent reasonably
required by such Participant or Assignee in connection with its interest or the
proposed acquisition of an interest in the Credit or a Bid Loan or any Money
Market Loans.
16.1.5 The Borrower and each of the Guarantors shall provide such
certificates, acknowledgements and further assurances in respect of this
Agreement and the Credit or a Bid Loan or a Money Market Loan as such Lender may
reasonably require in connection with any participation or assignment pursuant
to Section 16.1.3.
16.1.6 Except in the case of an Assignee which has delivered an
assumption agreement pursuant to Section 16.1.7:
(a) a Lender granting a participation or making an assignment shall
remain a "Lender" hereunder and shall act on behalf of all of its
Participants and Assignees in all dealings with the Borrower and the
Guarantors in respect of the Credit and the Bid Loans and any Money
Market Loans;
(b) the Participant or Assignee shall not constitute a "Lender" here-
under; and
(c) except with respect to Bankers' Acceptances, all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not
granted such participation or made such assignment.
16.1.7 A Lender may deliver to the Borrower, the Guarantors and the
Administrative Agent an agreement substantially in the form of Schedule 16.1.7
annexed hereto by which any Assignee of such Lender assumes the obligations and
agrees to be bound by all the terms and conditions of this Agreement, all as if
such Assignee had been an original party hereto. Upon any such assignment and
assumption of the obligations of such Lender by an Assignee:
(a) the Administrative Agent shall, upon receipt of a fee of US$2,500
from the Assignee (provided that such fee shall be paid by the Borrower
in the event of any assignment pursuant to Section 7.12 or 8.5), record
the assignment and any modified Commitments resulting therefrom; and
(b) the assigning Lender, the Borrower and the Guarantors shall be
released from their respective obligations hereunder (to the extent of
such assignment and assumption) and thereafter shall not have any
liability or obligations to each other to such extent, except in
respect of matters arising prior to such assignment.
In the event a Lender assigns the full amount of its Loan and
Commitments and such Lender has an outstanding Bid Loan and/or any Money Market
Loans at the time of such assignment, such Lender must also assign the full
amount of such Bid Rate Loans and Money Market Loans to a Person which is a
Lender at the time of such assignment.
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16.1.8 The Borrower and each of the Guarantors hereby consents to the
disclosure by each Lender to any Participant or Assignee of all information in
regard to this Agreement. The Borrower and each of the Guarantors further agrees
to co-operate fully with each Lender in connection with any transaction pursuant
to Section 16.1.7 and to execute and deliver such documents and assurances as a
Lender may reasonably request in connection therewith including, without
limitation, the agreement referred to in Section 16.1.7.
16.1.9 Each Lender and the Administrative Agent agrees (on behalf of
itself and each of its Affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of this nature and in accordance with safe and sound lending practices, any
non-public information supplied to it by the Borrower or any of its Subsidiaries
pursuant to this Agreement (and which is not independently known to such Lender
or the Administrative Agent) provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by Law or judicial
process, (ii) to counsel for any of the Lender or the Administrative Agent,
(iii) to a Lender's examiners, auditors or accountants, (iv) to the
Administrative Agent or any other Lender, (v) in connection with any litigation
to which any one or more of the Lenders is a party, (vi) to any Affiliate of any
Lender or the Administrative Agent, or (vii) to any Assignee or Participant (or
prospective Assignee or Participant) so long as such Assignee or Participant (or
prospective Assignee or Participant) first executes and delivers to the
respective Lender a Confidentiality Agreement substantially in the form of
Schedule 16.1.9 annexed hereto; provided, further, that, unless specifically
prohibited by applicable Law or court order, each Lender shall, prior to
disclosure thereof, notify the Borrower of any request for disclosure of any
such non-public information (x) by any governmental agency or representative
thereof (other than any such request in connection with an examination of such
Lenders financial condition by such governmental agency), or (y) pursuant to
legal process; and provided finally that in no event shall any Lender or the
Administrative Agent be obligated or required to return any materials furnished
by the Borrower or any of its Subsidiaries.
16.1.10 No Lender shall be entitled to grant a participation or an
assignment pursuant to Section 16.1.3 or to change its branch of account, as the
case may be, if, as a result, the Borrower would be required to pay or reimburse
the Participant or Assignee for any Taxes under Section 9.7 or any Compensating
Amount under Section 8.2.
16.1.11 Each Lender listed on the signature pages hereof hereby
represents and warrants (i) that it has experience and expertise in the making
of loans such as the Term Loans and/or the Revolving Loans, as applicable; and
(ii) that it will make its Advances for its own account in the ordinary course
of its business and without a view to distribution of its interest in the Credit
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of this
Article 16, the disposition of such interests in the Credit shall at all times
remain within its exclusive control). Each Lender listed on the signature pages
hereof hereby represents and warrants that it is a resident of Canada within the
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meaning of the Income Tax Act (Canada). Each Lender that becomes a party hereto
after the date hereof pursuant to an assignment from a Lender shall be deemed to
represent and warrant that it is a resident of Canada within the meaning of the
Income Tax Act (Canada).
ARTICLE 17
GUARANTEE
17.1 Guarantee
Each of the Guarantors, for good and valuable consideration received,
hereby absolutely, irrevocably and unconditionally guarantees, as primary
obligor and not merely as surety, in favor of each of the Lenders and the
Administrative Agent, the prompt and complete payment when due, whether at
stated maturity, by acceleration or otherwise, of all present and future
obligations of the Borrower resulting from the terms and conditions of this
Agreement, including without limitation, the repayment of the Bid Loan and the
Loan and all reimbursement obligations under any Letters of Credit, together
with interest thereon and all fees and other amounts as provided in this
Agreement (such obligations being herein called the "Obligations"). Each of the
Guarantors shall be considered as primarily liable to the Lenders and the
Administrative Agent, and shall not be released nor its liability hereunder
limited or lessened by any variation or departure from the provisions of this
Agreement nor by the Lenders or the Administrative Agent's granting time, taking
or giving up securities, accepting compositions, granting releases or
discharges, or otherwise dealing with any Person, nor by any other thing
whatsoever, either of a like nature to the foregoing or otherwise whereby as
guarantor only, a Guarantor would or might be released, and none of the Lenders
or the Administrative Agent shall be bound to exhaust its recourse against the
Borrower or any other Person or any security it may hold before being entitled
to payment from each of the Guarantors. The Guarantors covenant and agree that
until such time as each of the Lenders and the Administrative Agent shall have
been indefeasibly paid in full all Obligations, no payment will be taken,
demanded, received or accepted by a Guarantor of or on account of the principal
amount of or interest of any indebtedness incurred by a Guarantor in fulfillment
of its obligations pursuant to this Section 17.1 or on any other indebtedness
payable by the Borrower, each of the Guarantors agreeing that this said
indebtedness shall, at all times, be fully subordinated to and rank in time and
right of payment junior to the Obligations, and each of the Guarantors hereby
renounces any rights of compensation and/or set-off and/or counterclaim. Without
limiting the foregoing, each of the Guarantors hereby expressly subordinates and
postpones all of its rights to the benefit of subrogation (whether contractual,
under the Bankruptcy Code, under common law or otherwise) and all contractual,
common law, statutory and other rights of reimbursement, contribution,
exoneration or indemnity (or any similar right) from or against the Borrower
which may have arisen in connection with this guarantee, and agrees not to
enforce or attempt to enforce any of the foregoing, until indefeasible full
repayment of the Obligations and the termination of all Letters of Credit and
the Total Commitment. Each of the Guarantors hereby determines and agrees that
the execution, delivery and performance of this Agreement by such Guarantor is
necessary and convenient to the conduct, promotion or attainment of the business
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of the Borrower and the Guarantors and in furtherance of the corporate purposes
of the Guarantors. Notwithstanding anything herein to the contrary, the
obligations of CNR Properties arising under this Article 17 are solely with
respect to the obligations of Canadian National Railway Company under this
Agreement in its capacity as a Borrower. Upon the reasonable request of the
Administrative Agent, CNR Properties will execute a guarantee agreement with
substantially the same effect as this Article 17 in order to guarantee the
obligations of any future Borrower or any other future Guarantor under this
Agreement to the extent that CNR Properties is permitted to guarantee such
obligations under applicable Law.
17.2 Guarantee Absolute
Each of the Guarantors guarantees that the Obligations will be paid
strictly in accordance with the terms of this Agreement, regardless of any Law,
regulation, or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Administrative Agent or the Lenders with
respect thereto. The liability of each of the Guarantors under this Agreement
shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any provisions of this
Agreement, any Bankers' Acceptance or any other agreement or instrument
relating to this Agreement;
(ii) any change in the time, manner or place of payment of or in any
other term of, all or any of the Obligations or any other amendment,
restatement or waiver of or any consent to departure from this
Agreement;
(iii) any exchange, release or non-perfection of any collateral or any
release or amendment or waiver of or consent to departure from any
other guarantee, for all or any of the Obligations;
(iv) the reconstruction, reorganization, consolidation, amalgamation or
merger of the Borrower with or into any other Person, or the transfer,
sale, lease or other disposition by the Borrower of all or
substantially all of its assets or business to any other Person,
whether or not affected in compliance with the provisions of this
Agreement;
(v) the illegality under any applicable Law of repayment of the
Obligations or the adoption of any Law purporting to render any
Obligations null and void;
(vi) any defense, setoff or counterclaim which may at any time be
available to or asserted by any Guarantor against the Administrative
Agent or any Lender; or
(vii) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor.
The liability of each of the Guarantors under this Article 17 shall
continue to be effective or be reinstated, as the case may be, if at any time
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any payment of any of the Obligations is rescinded or must otherwise be returned
by the Administrative Agent or any Lender upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, all as though such payment had not
been made.
17.3 Waiver
Each of the Guarantors hereby waives promptness, diligence, notice of
acceptance, presentment, protest, demand, notice of default, and any other
notice with respect to any of the Obligations and its liability hereunder and
any requirement that the Administrative Agent or any Lender protect, secure,
perfect or insure any Lien, if any, or any property subject thereto or exhaust
any right or take any action against the Borrower or any other Person or any
collateral.
17.4 Continuing Guarantee
The obligations of each of the Guarantors under this Article 17 shall
be a continuing guarantee and shall:
(i) remain in full force and effect until payment in full of the
Obligations and all other amounts payable under this Agreement;
(ii) be binding upon each of the Guarantors, its successors and
assigns; and
(iii) enure to the benefit of and be enforceable by the Lenders, the
Administrative Agent and their respective successors, transferees and
assigns.
Without limiting the generality of the foregoing clause (iii), upon any
assignment by any Lender of all or any part of any interest in this Agreement by
it to any other Person in accordance with the terms of this Agreement, such
other Person shall thereupon become vested with all the rights in respect
thereof granted to such Lender herein or otherwise, subject, however, to the
provisions of this Agreement concerning the Administrative Agent and subject to
compliance with Section 16.1.7.
17.5 Fraudulent Conveyance Limitation
17.5.1 Anything contained in this Article 17 to the contrary
notwithstanding, if any Fraudulent Transfer Law (as hereinafter defined) is
determined by a court of competent jurisdiction to be applicable to the
obligations of any Guarantor under this Article 17, such obligations of such
Guarantor hereunder shall be limited to a maximum aggregate amount equal to the
largest amount that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11
of the United States Code or any applicable provisions of comparable state law
(collectively, the "Fraudulent Transfer Laws"), in each case after giving effect
to all other liabilities of such Guarantor, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically excluding, however,
any liabilities of such Guarantor (x) in respect of intercompany indebtedness to
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the Borrower or other affiliates of the Borrower to the extent that such
indebtedness would be discharged in an amount equal to the amount paid by such
Guarantor hereunder and (y) under any guaranty of subordinated indebtedness
which guaranty contains a limitation as to maximum amount similar to that set
forth in this Section 17.5.1, pursuant to which the liability of such Guarantor
hereunder is included in the liabilities taken into account in determining such
maximum amount) and after giving effect as assets to the value (as determined
under the applicable provisions of the Fraudulent Transfer Laws) of any rights
to subrogation, reimbursement, indemnification or contribution of such Guarantor
pursuant to applicable law or pursuant to the terms of any agreement (including
without limitation any such right of contribution under Section 17.5.2).
17.5.2 Guarantors together desire to allocate among themselves, in a
fair and equitable manner, their obligations arising under this Article 17.
Accordingly, in the event any payment or distribution is made on any date by any
Guarantor under this Article 17 (a "Funding Guarantor") that exceeds its Fair
Share (as defined below) as of such date, that Funding Guarantor shall be
entitled to a contribution from each of the other Guarantors in the amount of
such other Guarantor's Fair Share Shortfall (as defined below) as of such date,
with the result that all such contributions will cause each Guarantor's
Aggregate Payments (as defined below) to equal its Fair Share as of such date.
"Fair Share" means, with respect to a Guarantor as of any date of determination,
an amount equal to (i) the ratio of (x) the Adjusted Maximum Amount (as defined
below) with respect to such Guarantor to (y) the aggregate of the Adjusted
Maximum Amounts with respect to all Guarantors, multiplied by (ii) the aggregate
amount paid or distributed on or before such date by all Funding Guarantors
under this Article 17 in respect of the obligations guarantied. "Fair Share
Shortfall" means, with respect to a Guarantor as of any date of determination,
the excess, if any, of the Fair Share of such Guarantor over the Aggregate
Payments of such Guarantor. "Adjusted Maximum Amount" means, with respect to a
Guarantor as of any date of determination, the maximum aggregate amount of the
obligations of such Guarantor under this Article 17, determined as of such date
in accordance with Section 17.5.1; provided that, solely for purposes of
calculating the "Adjusted Maximum Amount" with respect to any Guarantor for
purposes of this Section 17.5.2, any assets or liabilities of such Guarantor
arising by virtue of any rights to subrogation, reimbursement or indemnification
or any rights to or obligations of contribution hereunder shall not be
considered as assets or liabilities of such Guarantor. "Aggregate Payments"
means, with respect to a Guarantor as of any date of determination, an amount
equal to (i) the aggregate amount of all payments and distributions made on or
before such date by such Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 17.5.2) minus (ii) the aggregate
amount of all payments received on or before such date by such Guarantor from
the other Guarantors as contributions under this Section 17.5.2. The amounts
payable as contributions hereunder shall be determined as of the date on which
the related payment or distribution is made by the applicable Funding Guarantor.
The allocation among Guarantors of their obligations as set forth in this
Section 17.5.2 shall not be construed in any way to limit the liability of any
Guarantor hereunder.
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17.6 Taxes
17.6.1 Any and all payments to the Lenders by the Guarantors in respect
of the Obligations, shall be made free and clear of and without deduction or
withholding for any and all present or future Taxes excluding, in the case of
each Lender and the Administrative Agent, (i) Taxes on the overall income or net
profits (or franchise taxes imposed in lieu thereof) of such Lender or
Administrative Agent imposed by any jurisdiction in which such Lender or
Administrative Agent is organized or has its Applicable Lending Office, and (ii)
in the case of each Lender and the Administrative Agent, Taxes imposed solely by
reason of the Lender or the Administrative Agent (as the case may be) doing
business in the jurisdiction imposing such Tax, other than as a result of this
Agreement or any transaction contemplated hereby (all Taxes, other than such
excluded Taxes, being hereinafter referred to as "Section 17.6 Taxes") unless
such Taxes are required by law or the administration thereof to be deducted or
withheld. If any Guarantor shall be required by Law or the administration
thereof to deduct or withhold any such Section 17.6 Taxes from or in respect of
any such amount payable hereunder then, (i) the amount payable shall be
increased as may be necessary so that after making all required deductions or
withholdings (including deductions or withholdings applicable to additional
amounts paid under this Section 17.6), the Lenders receive an amount equal to
the amount they would have received if no such deduction or withholding had been
made; (ii) such Guarantor shall make such deductions or withholdings; and (iii)
such Guarantor forthwith shall pay the full amount deducted or withheld to the
relevant taxation or other authority in accordance with applicable Law.
17.6.2 Each Guarantor agrees to pay forthwith any present or future
stamp documentary taxes or any other excise or property taxes, charges or
similar levies (all such taxes, charges and levies being herein referred to as
"Other Taxes") imposed by any jurisdiction (or any political subdivision or
taxing authority thereof or therein) which arise from any payment made by the
Guarantors hereunder.
17.6.3 Each Guarantor agrees to indemnify the Lenders for the full
amount of (i) Section 17.6 Taxes and Other Taxes not deducted or withheld and
paid by such Guarantors in accordance with Section 17.6.1 and 17.6.2 to the
relevant taxation or other authority and (ii) any Section 17.6 Taxes or Other
Taxes imposed by any jurisdiction on amounts payable by any Guarantor under this
Section 17.6, in each case paid by the Lenders and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not any such Taxes or Other Taxes were correctly or legally asserted;
provided that, if such Taxes or Other Taxes were incorrectly or illegally
imposed, such Lender shall, at the reasonable request of the applicable
Guarantor, take all reasonable actions that are without risk or material cost to
such Lender to claim and obtain refunds with respect to such Taxes or Other
Taxes and will promptly after receipt thereof remit such refunds to such
Guarantor. Payment under this indemnification shall be made within 15 days from
the date the Administrative Agent or the relevant Lenders make written demand
therefor. A certificate as to the amount of such Taxes or Other Taxes, providing
reasonable details of the calculation thereof, and evidence of payment thereof
submitted to the relevant Guarantor by the Administrative Agent shall be prima
facie evidence of the amount due from such Guarantor to the Administrative Agent
or the Lenders.
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17.6.4 Each Guarantor shall furnish to the Administrative Agent and the
relevant Lenders the original or a certified copy of a receipt evidencing any
payment of Taxes or other Taxes made by such Guarantor, as soon as such receipt
becomes available.
Each Lender and the Administrative Agent agrees that it will (i) take
all reasonable actions reasonably requested by the Guarantor that are without
risk or material cost to such Lender or the Administrative Agent (as the case
may be) to maintain all exemptions, if any, available to it from withholding
taxes (whether available by treaty or existing administrative waiver), and (ii)
to the extent reasonable and without material cost to it, otherwise cooperate
with the Guarantor to minimize any amounts payable by the Guarantor under this
Section.
If the Guarantor is required to pay additional amounts to or for the
account of any Lender pursuant to this section 17.6, then such Lender will
change the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such change,
in the judgment of such Lender, would not impose material cost on such Lender
and is not otherwise disadvantageous to such Lender.
17.6.5 The provisions of this Section 17.6 shall survive the
termination of the Agreement and the repayment of all Advances and Bid Advances
and all Money Market Loans.
ARTICLE 18
MISCELLANEOUS
18.1 Severability
Any provision of this Agreement which is or becomes prohibited or
unenforceable in any jurisdiction shall not invalidate, affect or impair the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction does not invalidate or render unenforceable any such provision in
any other jurisdiction.
18.2 Amendments, Waivers, Etc.
Except as specifically provided in Section 15.12, no amendment,
modification or waiver of any provision of, and no waiver of the strict
observance, performance or compliance by the Borrower or each of the Guarantors
with any term, covenant, condition or agreement contained in this Agreement and
no indulgence granted by the Administrative Agent or the Lenders or consent to
any departure by the Borrower or any of the Guarantors therefrom, shall in any
event be effective unless it shall be in writing and signed by, as the case may
be, the Majority Lenders or the Administrative Agent on behalf of the Lenders or
the Majority Lenders, as required, and the Borrower and each of the Guarantors,
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and then such amendment, modification, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it is given.
18.3 Direct Obligation
Notwithstanding any other provision hereof, the Borrower shall be
obligated directly towards each of the Lenders in respect of the Participation
of each of the Lenders as well as any other amounts which may be payable by the
Borrower pursuant to or in connection with this Agreement or any Borrowings. The
obligations of each of the Lenders are independent from one another, are not
joint, and may not be increased, reduced, extinguished or otherwise affected due
to the default of another Lender pursuant hereto. Any default of any party
hereto in the performance of its obligations shall not release any of the other
parties hereto from the performance of any of their respective obligations.
18.4 Sharing of Information
The Borrower and each of the Guarantors agrees that the Administrative
Agent and the Lenders may share amongst themselves any information which any of
them may possess concerning the Borrower or any of the Guarantors in respect of
the Borrower's and each of the Guarantors' undertakings, obligations or
indebtedness towards any Lender pursuant to this Agreement or otherwise, as well
as any payment received from the Borrower or any of the Guarantors by any
Lender. Without limiting the generality of the foregoing, the Administrative
Agent may disclose to any Lender and the Borrower and any of the Guarantors any
information contained in any notices, consents, certificates, documents or other
instruments or writings delivered to it under or pursuant to this Agreement.
18.5 Term of Agreement
This Agreement shall continue in full force and effect until both the
Total Commitment of the Lenders has terminated and all Obligations (other than
inchoate indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen) of the Borrower and each of the
Guarantors under or pursuant to this Agreement have been indefeasibly paid and
satisfied in full.
18.6 Further Assurances
The Borrower and each of the Guarantors agrees to do, execute,
acknowledge, deliver or cause to be done, executed, acknowledged or delivered
all such further acts, deeds, documents, opinions and assurances as may be
reasonably requested by the Administrative Agent or any Lender from time to time
during the term hereof for the purpose of effecting the transactions
contemplated hereby.
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18.7 Execution in Counterparts
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement.
18.8 Language
The parties hereby confirm their express wish that the present
Agreement and all documents and agreements directly and indirectly related
thereto, including notices, be drawn up in English. Notwithstanding such express
wish, the parties agree that any of such documents, agreements and notices or
any part thereof or of this Agreement may be drawn up in French. Les parties
reconnaissent leur volonte expresse que la presente convention ainsi que tous
les documents et conventions qui s'y rattachent directement ou indirectement, y
compris les avis, soient rediges en langue anglaise. Nonobstant telle volonte
expresse, les parties conviennent que n'importe quel desdits documents,
conventions et avis ou toute partie de ceux-ci ou de cette convention puissent
etre rediges en langue francaise.
18.9 Whole Agreement
This Agreement and the letters referred to in Sections 5.9 and 5.11 in
regard to the underwriting fee and administrative fee constitute the whole
agreement between the parties in respect of the Credit and the Bid Loans, and as
and from the date of this Agreement cancel and supersede any other prior
agreements, undertakings, declarations and representations, written or oral, in
respect thereto.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective representatives thereunto duly authorized as of the
date first above written.
CANADIAN NATIONAL RAILWAY COMPANY,
as Borrower
By: /s/ Sean Finn
------------------------------------------
Sean Finn
Treasurer and Principal Tax Counsel
Notice Address:
935 de La Gauchetiere West, 3rd Floor
Montreal, Quebec
H3B 2M9
Attention: Treasurer
Telecopier: (514) 399-4854
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<PAGE>
GRAND TRUNK CORPORATION,
as a Guarantor
By: /s/ Sean Finn
------------------------------------------
Sean Finn
Treasurer and Principal Tax Counsel
GRAND TRUNK WESTERN RAILROAD INCORPORATED,
as a Guarantor
By: /s/ Sean Finn
------------------------------------------
Sean Finn
Treasurer and Principal Tax Counsel
DULUTH, WINNIPEG AND PACIFIC RAILWAY COMPANY,
as a Guarantor
By: /s/ Sean Finn
------------------------------------------
Sean Finn
Treasurer and Principal Tax Counsel
ST. CLAIR TUNNEL COMPANY,
as a Guarantor
By: /s/ Sean Finn
------------------------------------------
Sean Finn
Treasurer and Principal Tax Counsel
2
<PAGE>
CANADIAN NATIONAL RAILWAY PROPERTIES, INC.
as a Guarantor
By: /s/ Sean Finn
------------------------------------------
Sean Finn
Treasurer and Principal Tax Counsel
Notice Address for the Guarantors:
935 de La Gauchetiere West, 3rd Floor
Montreal, Quebec
H3B 2M9
Attention: Treasurer
Telecopier: (514) 399-4854
3
<PAGE>
BANK OF MONTREAL,
as Administrative Agent and Repayment Agent
By: /s/ Glenn Rourke
------------------------------------------
Authorized Signing Officer
By: /s/ Denis LaFramboise
------------------------------------------
Authorized Signing Officer
Notice Address:
After Sales
100 King Street West
22nd Floor, F.C.P.
Toronto, Ontario
M5X lA1
Attention: Manager Loan Agency
Telecopier: (416) 867-5718
BANK OF MONTREAL,
as an Arranger and as a Lender
By: /s/ Glenn Rourke
------------------------------------------
Authorized Signing Officer
By: /s/ Denis LaFramboise
------------------------------------------
Authorized Signing Officer
Notice Address:
129, rue St-Jacques
12th Floor
Montreal, Quebec
H2Y 1L6
Attention: Director
Telecopier: (514) 877-6933
4
<PAGE>
GOLDMAN SACHS CREDIT PARTNERS L.P.
as Advisor and Syndication Agent and as an Arranger
By: /s/ Ed Forst
------------------------------------------
Authorized Signatory
Notice Address:
85 Broad Street
New York, New York 10004
Attention: Stephen King
Telephone: 212-902-8123
Telecopier: 212-357-3000
with a copy to:
85 Broad Street
New York, New York 10004
Attention: John Makrinos
Telephone: 212-902-5977
Telecopier: 212-357-4597
GOLDMAN SACHS CANADA CREDIT PARTNERS CO.,
as a Lender
By: /s/ Ed Forst
------------------------------------------
Authorized Signatory
Notice Address:
85 Broad Street
New York, New York 10004
Attention: Stephen King
Telephone: 212-902-8123
Telecopier: 212-357-3000
with a copy to:
85 Broad Street
New York, New York 10004
Attention: John Makrinos
Telephone: 212-902-5977
Telecopier: 212-357-4597
5
<PAGE>
THE BANK OF NOVA SCOTIA,
as a Co-Documentation Agent and as a Lender
By: /s/ Raymond Trempe
------------------------------------------
Name: Raymond Trempe
Title: Senior Manager
Notice Address:
1002, Sherbrooke Street West
Montreal, Quebec H3A 3M3
Telephone: 514-499-5664
Facsimile: 514-499-5504
6
<PAGE>
NBD BANK,
as a Co-Documentation Agent
By: /s/ Daniel J. Thomson
------------------------------------------
Name: Daniel J. Thomson
Title: First Vice President
By: /s/ Richard L. Janisee
------------------------------------------
Name: Richard L. Janisee
Title: First Vice President
Notice Address:
611 Woodward Avenue
Detroit, Michigan 48226
Attention: Daniel J. Thomson
Telephone: 313-225-1044
Facsimile: 313-225-1689
7
<PAGE>
[This page intentionally left blank]
8
<PAGE>
BANK OF AMERICA CANADA,
as a Lender
By: /s/ Gregory B. Vit
------------------------------------------
Name: Gregory B. Vit
Title: Vice President
Notice Addresses:
200 Front Street West, Suite 2700
Toronto, Ontario M5V 3L2
Attention: Gregory B. Vit
Telephone: 416-349-4095
Facsimile: 416-349-4283
and
1250 Rene-Levesque Blvd. Ouest
Suite 4335
Montreal, Quebec H3B 4W8
Attention: Charline Didierjean
Telephone: 514-938-1600 (X5072)
Facsimile: 514-938-1601
9
<PAGE>
BANCA COMMERCIALE ITALIANA OF CANADA,
as a Lender
By: /s/ Roger Michaud
------------------------------------------
Name: Roger Michaud
Title: Vice President and Regional Manager
By: /s/ Mike Bucci
------------------------------------------
Name: Mike Bucci
Title: Senior Manager
Notice Address:
888 rue Sherbrooke Ouest
Montreal, Quebec H3A 1G3
Attention: Mike Bucci
Telephone: 514-284-3627
Facsimile: 514-284-1860
10
<PAGE>
THE CHASE MANHATTAN BANK OF CANADA,
as a Lender
By: /s/ Christine Chan
------------------------------------------
Name: Christine Chan
Title: Vice-President
Notice Address:
1 First Canadian Place
100 King Street West, Suite 6900
Toronto, Ontario M5X 1A4
Attention: Gene Gomes
Telephone: 416-216-4146
Facsimile: 416-216-4161
11
<PAGE>
CANADIAN IMPERIAL BANK OF COMMERCE,
as a Lender
By: /s/ Michel Tessier
------------------------------------------
Name: Michel Tessier
Title: Executive Director
Notice Address:
600 De Maisonnueve West, Suite 3210
Montreal, Quebec H3A 3J2
Telephone: 514-847-6658
Facsimile: 514-847-6672
12
<PAGE>
CITIBANK CANADA,
as a Lender
By: /s/ Camillo O. di Prata
------------------------------------------
Name: Camillo O. di Prata
Title: Managing Director
Notice Address:
630 Rene-Levesque Blvd. Ouest
Suite 2450
Montreal, Quebec H3B 1S6
Telephone: 514-393-7507
Facsimile: 514-393-7545
13
<PAGE>
FIRST CHICAGO NBD BANK, CANADA,
as a Lender
By: /s/ Daniel J. Thomson
------------------------------------------
Name: Daniel J. Thomson
Title: First Vice President
By: /s/ Richard L. Janisee
------------------------------------------
Name: Richard L. Janisee
Title: First Vice President
Notice Address:
611 Woodward Avenue
Detroit, Michigan 48226
Attention: Daniel J. Thomson
Telephone: 313-225-1044
Facsimile: 313-225-1689
14
<PAGE>
JP MORGAN CANADA,
as a Lender
By: /s/ John Maynard
------------------------------------------
Name: John Maynard
Title: Vice President and Controller
Notice Address:
Royal Bank Plaza
South Tower
Suite 1800
Toronto, Ontario M5J 2J2
Telephone: 416-981-9290
Facsimile: 416-981-9234
15
<PAGE>
NATIONAL BANK OF CANADA,
as a Lender
By: /s/ Andre Marenger
------------------------------------------
Name: Andre Marenger
Title: Manager
By: /s/ Linda Gross
------------------------------------------
Name: Linda Gross
Title: Manager
Notice Address:
North American Corporate Banking
600, de la Gauchetiere West
Main Floor
Montreal, Quebec H3B 4L2
Telephone: 514-394-6430
Facsimile: 514-394-6073
16
<PAGE>
ROYAL BANK OF CANADA,
as a Lender
By: /s/ Fiona Dubsky
------------------------------------------
Name: Fiona Dubsky
Title: Senior Manager
Notice Address:
1 Place Ville Marie, 8th Floor
Montreal, Quebec H3C 3A9
Telephone: 514-874-2816
Facsimile: 514-874-5315
17
<PAGE>
THE TORONTO DOMINION BANK,
as a Lender
By: /s/ Donald Olds
------------------------------------------
Name: Donald Olds
Title: Manager
Corporate & Investment Banking Group
By: /s/ Yves Bergeron
------------------------------------------
Name: Yves Bergeron
Title: Associate Vice President
Corporate & Investment Banking Group
Notice Address:
500 St. Jacques Street, 9th Floor
Montreal, Quebec H2Y 1S1
Telephone: 514-289-1500
Facsimile: 514-289-0788
18
<PAGE>
UNION BANK OF SWITZERLAND [CANADA],
as a Lender
By: /s/ Lawrence J. Maloney
------------------------------------------
Name: Lawrence J. Maloney
Title: Director
By: /s/ Donald R. Chung
------------------------------------------
Name: Donald R. Chung
Title: Director
Notice Address:
154 University Avenue
Toronto, Ontario M5H 3Z4
Telephone: 416-343-1768
Facsimile: 416-343-1700
19
<PAGE>
CREDIT LYONNAIS CANADA,
as a Lender
By: /s/ Andre Roy
------------------------------------------
Name: Andre Roy
Title: Assistant Vice-President
By: /s/ Jacques Clermont
------------------------------------------
Name: Jacques Clermont
Title: Vice-President and Assistant
Manager Eastern Region
Notice Address:
2000 Mansfield
16th Floor
Montreal, Quebec H3A 3A4
Telephone: 514-499-8743
Facsimile: 514-288-9683
20
<PAGE>
MELLON BANK CANADA,
as a Lender
By: /s/ Wendy B. H. Bocti
---------------------------------
Name: Wendy B. H. Bocti
Title: Vice President
Notice Address:
Royal Trust Tower
Toronto Dominion Tower
Suite 3200
Toronto, Ontario M5K 1K2
Telephone: 416-860-2412
Facsimile: 416-860-2409
21
CREDIT AGREEMENT
by and among
GRAND TRUNK CORPORATION
as Borrower
CANADIAN NATIONAL RAILWAY COMPANY,
GRAND TRUNK WESTERN RAILROAD INCORPORATED,
DULUTH, WINNIPEG AND PACIFIC RAILWAY COMPANY,
ST. CLAIR TUNNEL COMPANY and CANADIAN NATIONAL RAILWAY
PROPERTIES, INC.
as Guarantors
THE FINANCIAL INSTITUTIONS NAMED
ON THE SIGNATURE PAGES HEREOF
as Lenders
GOLDMAN SACHS CREDIT PARTNERS L.P. and BANK OF MONTREAL
as Arrangers
GOLDMAN SACHS CREDIT PARTNERS L.P.
as Advisor and Syndication Agent
BANK OF MONTREAL
as Administrative Agent
THE BANK OF NOVA SCOTIA and NBD BANK
as Co-Documentation Agents
BANK OF MONTREAL
as Repayment Agent
---------------------------------
U.S. $720,000,000
---------------------------------
Dated as of March 16, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 INTERPRETATION............................................. 4
1.1 Definitions................................................ 4
1.2 Control.................................................... 30
1.3 Computation of Time Periods................................ 30
1.4 Headings and Table of Contents............................. 30
1.5 References................................................. 30
1.6 Singular and Plural; Gender................................ 31
1.7 Generally Accepted Accounting Principles................... 31
1.8 Ratable - Portion of Accommodations........................ 31
1.9 Incorporation of Schedules................................. 31
ARTICLE 2 REPRESENTATIONS AND WARRANTIES............................. 31
2.1 Representations and Warranties............................. 31
2.2 Survival of Representations and Warranties................. 37
ARTICLE 3 THE CREDIT................................................. 38
3.1 Term Loan Commitment; Use of Proceeds...................... 38
3.2 Revolving Loan Commitment; Use of Proceeds of
Revolving Loans.......................................... 38
3.3 Direct Advances............................................ 39
3.4 Bid Advances............................................... 40
3.5 Money Market Loans......................................... 44
3.6 Notice Provisions.......................................... 46
3.7 Pro Rata Treatment......................................... 46
3.8 Accounts Kept by the Administrative Agent.................. 46
3.9 Accounts Kept by each Lender............................... 47
ARTICLE 4 REPAYMENT, CONVERSION AND REDUCTION........................ 47
4.1 Mandatory Repayment and Prepayment of the Loan............. 47
4.2 Optional Repayments........................................ 48
4.3 Conversion Option.......................................... 49
4.4 Requirements for Optional Repayments and Optional
Conversions.............................................. 49
4.5 Authority to Debit......................................... 50
4.6 Reduction of the Commitments............................... 50
4.7 Increase of Revolving Loan Commitment...................... 51
ARTICLE 5 INTEREST AND FEES.......................................... 52
5.1 Interest................................................... 52
5.2 Payment of Interest on Libor Loan.......................... 52
5.3 Payment of Interest on US Base Rate Loan................... 52
5.4 Selection of Interest Periods.............................. 52
5.5 Default Interest........................................... 53
i
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5.6 Determination of Interest Rates............................ 53
5.7 Underwriting Fee........................................... 54
5.8 Facility Fee............................................... 54
5.9 Administrative Fee......................................... 54
5.10 Certain Computations....................................... 54
ARTICLE 6 [INTENTIONALLY OMITTED].................................... 54
ARTICLE 7 LETTERS OF CREDIT.......................................... 55
7.1 Letter of Credit Commitment................................ 55
7.2 Letter of Credit Participations............................ 55
7.3 Repayment of Participants.................................. 56
7.4 Role of the Administrative Agent........................... 56
7.5 Lenders' Obligations Absolute.............................. 56
7.6 Reinstatement and Survival................................. 57
7.7 Procedure for Issuance and Renewal of
Letters of Credit........................................ 57
7.8 Reimbursement of the Administrative Agent.................. 59
7.9 Commissions, Fees and Charges.............................. 59
7.10 Interest on Amounts Disbursed under Letters
of Credit................................................ 60
7.11 Computation of Interest and Fees; Payment not
on Business Day.......................................... 60
7.12 Increased Costs............................................ 60
7.13 Further Assurances......................................... 61
7.14 Nature of Obligations; Indemnities......................... 61
7.15 Payments upon any Event of Default......................... 63
ARTICLE 8 CHANGE IN CIRCUMSTANCES.................................... 63
8.1 Substitute Basis - Alternate Interest Rate................. 63
8.2 Increased Costs............................................ 64
8.3 Illegality................................................. 65
8.4 Indemnity.................................................. 66
8.5 Replacement of a Lender.................................... 66
ARTICLE 9 PAYMENTS, TAXES, EXPENSES AND INDEMNITY.................... 67
9.1 Payments by Borrower to Administrative Agent............... 67
9.2 Payments by Lenders to Administrative Agent................ 67
9.3 Payments by Administrative Agent to Borrower............... 67
9.4 Distribution to Lenders and Application of Payments........ 67
9.5 Currency Payment........................................... 67
9.6 Set-off.................................................... 68
9.7 Taxes...................................................... 68
9.8 Application of Payments.................................... 70
9.9 Expenses and Indemnity..................................... 70
9.10 Non-Receipt by Administrative Agent........................ 72
9.11 Indemnity by the Borrower.................................. 72
ii
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9.12 Survival of Indemnification Obligations.................... 73
ARTICLE 10 CONDITIONS OF LENDING...................................... 74
10.1 Conditions Precedent to the Closing........................ 74
10.2 Conditions Precedent to the Term Loans and other
Advances on In
Funding Date.............................................. 78
10.3 Conditions Precedent to each Advance........................ 79
10.4 Waiver...................................................... 80
10.5 Waiver by Lenders under Existing Credit Agreements.......... 81
ARTICLE 11 COVENANTS................................................... 81
11.1 Affirmative Covenants....................................... 81
11.2 Financial Covenants......................................... 86
11.3 Merger and Voting Trust Covenants........................... 87
11.4 Negative Covenants.......................................... 88
ARTICLE 12 DEFAULT..................................................... 91
12.1 Events of Default........................................... 91
12.2 Effect of a Default......................................... 94
12.3 Remedies Cumulative; No Waiver.............................. 95
12.4 Set-Off..................................................... 95
ARTICLE 13 NOTICE...................................................... 96
13.1 Notices, Etc................................................ 96
ARTICLE 14 GOVERNING LAW: JURISDICTION; JUDGMENT CURRENCY.............. 96
14.1 Governing Law............................................... 96
14.2 Jurisdiction................................................ 96
14.3 Judgment Currency........................................... 97
ARTICLE 15 THE AGENTS AND THE LENDERS.................................. 98
15.1 Authorization of Agents..................................... 98
15.2 Agents' Responsibility...................................... 99
15.3 Rights of Agents as Lenders.................................100
15.4 Indemnity...................................................100
15.5 Notice by Administrative Agent to Lenders...................100
15.6 Protection of Agents........................................100
15.7 Notice by Lenders to Administrative Agent...................101
15.8 Resignation of Administrative Agent.........................102
15.9 Sharing Among the Lenders...................................102
15.10 Intercreditor Agreement.....................................103
15.11 Provisions for the Benefit of Lenders Only..................103
15.12 Amendment of Article 15.....................................103
15.13 Authorized Waivers, Variations and Omissions................103
iii
<PAGE>
15.14 Dissenting Lenders..........................................104
ARTICLE 16 SUCCESSORS AND ASSIGNS......................................105
16.1 Successors and Assigns......................................105
ARTICLE 17 GUARANTEE...................................................109
17.1 Guarantee...................................................109
17.2 Guarantee Absolute..........................................110
17.3 Waiver......................................................111
17.4 Continuing Guarantee........................................111
17.5 Fraudulent Conveyance Limitation............................111
17.6 Taxes.......................................................112
ARTICLE 18 MISCELLANEOUS...............................................114
18.1 Severability................................................114
18.2 Amendments, Waivers. Etc....................................114
18.3 Direct Obligation...........................................114
18.4 Sharing of Information......................................115
18.5 Term of Agreement...........................................115
18.6 Further Assurances..........................................115
18.7 Execution in Counterparts...................................115
18.8 [Intentionally Omitted].....................................115
18.9 Whole Agreement.............................................115
iv
<PAGE>
SCHEDULES
1.1A COMMITMENTS AND APPLICABLE LENDING OFFICES
1.1B FORM OF NOTICE OF BORROWING
1.1C FORM OF NOTICE OF CONVERSION
1.1D FORM OF NOTICE OF OPTIONAL REPAYMENT
2.1.5 MATERIAL LITIGATION
2.1.10 TITLE DEFECTS
2.1.13 CERTAIN PERMITS, LICENSES AND APPROVALS
2.1.14 PENSION PLANS
2.1.19 CERTAIN MATTERS
2.1.21 CANADIAN PENSION PLAN FUNDING DEFICIENCIES
2.1.22 U.S. UNDERFUNDED ERISA PLANS
3.4.1 FORM OF NOTICE OF BID BORROWINGS
4.5 ACCOUNTS OF BORROWER
6.6 FORM OF POWER OF ATTORNEY
10.1.1 OPINIONS OF COUNSEL
10.1.2 CAPITAL STRUCTURE
11.1.12 FORM OF JOINDER AGREEMENT
11.1.16 FORM OF BORROWER JOINDER AGREEMENT
16.1.7 FORM OF ASSIGNMENT AGREEMENT
16.1.9 FORM OF CONFIDENTIALITY AGREEMENT
v
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT IS DATED AS OF MARCH 16, 1998 AND ENTERED INTO
BY AND AMONG: GRAND TRUNK CORPORATION, a corporation incorporated
and existing under the Delaware General Corporation
Law (together with any other Person that may become
a Borrower, hereinafter called the "Borrower");
AND: CANADIAN NATIONAL RAILWAY COMPANY, a corporation
continued and existing under the Canada Business
Corporations Act
(hereinafter called the "Company")
AND: GRAND TRUNK WESTERN RAILROAD INCORPORATED, a
corporation incorporated and existing under the
Delaware General Corporation Law
(hereinafter called "Western")
AND: DULUTH, WINNIPEG AND PACIFIC RAILWAY COMPANY, a
corporation incorporated and existing under the
Minnesota Business Corporation Act
(hereinafter called "Duluth")
AND: ST. CLAIR TUNNEL COMPANY, a corporation incorporated
and existing under the Michigan Railroad Code of 1993
(hereinafter called "St-Clair")
AND: CANADIAN NATIONAL RAILWAY PROPERTIES, INC., a
corpora- tion incorporated and existing under the
Canada Business Corporations Act
(hereinafter called "CNR Properties")
(Western, Duluth, St-Clair and CNR Properties, and
the Company, together with any other Person that may
become a Guarantor, are hereinafter collectively
called the "Guarantors")
AND: THE FINANCIAL INSTITUTIONS NAMED ON THE SIGNATURE
PAGES HEREOF
(hereinafter called individually a "Lender" and
collectively the "Lenders")
AND: BANK OF MONTREAL
(hereinafter called the "Administrative Agent")
AND: GOLDMAN SACHS CREDIT PARTNERS L.P. and BANK OF
MONTREAL
(hereinafter called individually an "Arranger" and
collectively the "Arrangers")
AND: THE BANK OF NOVA SCOTIA and NBD BANK
(hereinafter called individually a "Co-Documentation
Agent" and collectively the "Co-Documentation
Agents")
AND: GOLDMAN SACHS CREDIT PARTNERS L.P.
(hereinafter called the "Advisor" and the
"Syndication Agent")
AND: BANK OF MONTREAL
(hereinafter called the "Repayment Agent")
PRELIMINARY STATEMENTS:
A. The Company has caused the formation of, and indirectly
owns all of the outstanding shares of capital stock of, Merger Sub (this and
other capitalized terms used in these Preliminary Statements without definition
being used as defined in Section 1.1) for the purpose of acquiring not less than
50.1% (on a fully diluted basis) of the outstanding shares of common stock, par
value US$0.001 per share, of Illinois Central Corporation, a Delaware
corporation (together with its successors, including without limitation, the
survivor to the Merger, "Target") (such common stock being the "Target Common
Stock").
B. Merger Sub has offered to purchase not less than 50.1% (on
a fully diluted basis) and not more than 46,051,761 of the issued and
outstanding shares of Target Common Stock at a price equal to US$39.00 per share
pursuant to the Tender Offer.
C. Simultaneously with the purchase of the Target Common
Stock, such Target Common Stock purchased by Merger Sub will be deposited into
the Voting Trust established pursuant to the Voting Trust Agreement.
D. The Company, Merger Sub and Target have entered into the
Merger Agreement pursuant to which, upon completion of the Tender Offer and,
with respect to clauses (1), (2) and (3) below, upon receipt of the approval by
holders of at least 50.1% of the outstanding shares of Target Common Stock (if
required by law):
(1) Merger Sub will merge with Target pursuant to the
Merger Agreement with Target being the surviving corporation in such
merger (such surviving corporation is sometimes referred to herein as
the "Surviving Corporation");
(2) If Merger Sub has purchased 46,051,761 shares of
Target Common Stock, each of the shares of Target Common Stock
outstanding immediately before the consummation of the Merger (other
than shares to be cancelled as described in clause (4) below and shares
held by those who perfect appraisal rights, if any, under state law)
will be converted into the right to receive a number of common shares,
without par value, of the Company (the "Company Common Stock")
determined in accordance with the Merger Agreement;
(3) If Merger Sub has purchased less than 46,051,761
shares of Target Common Stock, each of the shares of Target Common
Stock outstanding immediately before the consummation of the Merger
(other than shares to be cancelled as described in clause (4) below and
shares held by those who perfect appraisal rights, if any, under state
law) will be converted into the right to receive (x) a number of shares
of Company Common Stock determined in accordance with the Merger
Agreement and (y) a cash payment in an amount determined in accordance
with the Merger Agreement;
(4) Each of the shares of Target Common Stock
outstanding immediately before the consummation of the Merger held by
Merger Sub, Target or any of their respective direct or indirect
Subsidiaries (including shares held in the Voting
Trust) (the "Other Target Shares") shall be cancelled and retired
without payment of any consideration therefor;
(5) As a result of the Merger, each of the shares of
the capital stock of Merger Sub outstanding immediately before the
consummation of the Merger will be converted into and become one fully
paid and nonassessable share of common stock of Surviving Corporation
(the "Surviving Corporation Common Stock"); and
(6) Following the Merger, all of the outstanding
shares of Surviving Corporation Common Stock shall be deposited into
and subject to the provisions of the Voting Trust unless and until the
STB approves the acquisition of control of Target by the Company.
E. The Borrower desires that Lenders extend certain credit
facilities to the Borrower to provide (together with cash on hand of the
Borrower and the proceeds of borrowings on the Initial Funding Date under the
Canadian Credit Agreement) for (i) the payment by Merger Sub of the cash
consideration for the Tendered Target Shares in an aggregate amount not
exceeding US$1,796,018,679.00; (ii) the refinancing of certain Indebtedness of
the Borrower and its Subsidiaries; (iii) the payment of Transaction Costs; (iv)
the working capital requirements and general corporate purposes of the Borrower
and its Subsidiaries, including without limitation commercial paper backstop;
(v) the issuance of Standby Letters of Credit and Commercial Letters of Credit
as described herein; and (vi) the other purposes described herein.
F. The Guarantors have agreed to guarantee the Obligations
hereunder.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the Borrower, Guarantors,
Lenders, and Agents hereby agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement unless something in the subject-matter or the context
otherwise is inconsistent therewith:
"Acquisition" - means a take-over bid or offer to acquire all or
substantially all of the outstanding voting or equity securities of a
corporation or an acquisition of all or substantially all of the assets of any
Person.
"Administrative Agent" - means Bank of Montreal or the administrative
agent in office at such time pursuant to Article 15.
"Advance" - means (i) a direct advance by a Lender to the Borrower by
way of US Base Rate Advances or Libor Advances pursuant to Section 3.3, (ii) US
Base Rate Advances pursuant to Section 7.8.1, and (iii) the amount of the Letter
of Credit Exposure.
"Affiliate" - has the meaning ascribed thereto in the Canada Business
Corporations Act, as the same may be amended, replaced or supplemented from time
to time.
"Agreement" - means this agreement as it may be amended, supplemented
or restated from time to time.
"Agents" - means Administrative Agent, Arrangers, Advisor, Syndication
Agent, the Co-Documentation Agents, and Repayment Agent.
"Applicable Lending Office" - means, with respect to any Lender, the
office of such Lender in the United States specified under the heading "Address"
opposite its name on Schedule 1.1A annexed hereto as specified thereon, or such
other office of such Lender in the United States as such Lender may from time to
time specify to the Borrower (with a copy to the Administrative Agent), and
means, with respect to any assignee of all or any part of, or any interest in,
any Lender's rights and obligations hereunder, the office of such assignee
located at its address selected in the United States and specified as its
"Applicable Lending Office" to the Borrower (with a copy to the Administrative
Agent) from time to time by such assignee.
"Applicable Margin" - means, for each day during which a Libor Loan or
a Letter of Credit is outstanding, the rate of interest per annum (expressed in
basis points, i.e., 1/100 of 1%) set forth in Column B below opposite the
category in Column A below which describes the Applicable Public Debt Rating in
effect on such day:
Column A Column B
-------- --------
Level 1 19.5
Level 2 25
Level 3 27.5
Level 4 30
Level 5 47.5
Level 6 67.5
provided that (i) if the Applicable Public Debt Rating is comprised of two
"Levels", (x) if there is no more than one Level difference between such Levels,
then the Applicable Margin shall be the amount in Column B above corresponding
to the Level in Column A above which is the higher of such Levels and (y) if
there is more than one Level difference between such Levels, then the Applicable
Margin shall be the arithmetic average of (a) the amount in Column B above
corresponding to the Level in Column A above which corresponds to the S&P Public
Debt Rating and (b) the amount in Column B above corresponding to the Level in
Column A above which corresponds to the Moody's Public Debt Rating, and (ii) for
each day during which the sum of the aggregate principal amounts of the Loan,
the Bid Loans, the Canadian Term Loan, the Canadian Revolving Loans and all
other advances under the Canadian Credit Agreement (including Bid Loans, but not
including Money Market Loans, as such terms are defined therein) exceeds
US$900,000,000, each of the Applicable Margins shall be increased by 5 basis
points.
"Applicable Public Debt Rating" - means, as of any day, Level 1, Level
2, Level 3, Level 4, Level 5 or Level 6 below, whichever is applicable on such
day to (a) if the Public Debt Rating on such day by S&P and Moody's is in the
same "Level" below, that Level or (b) if such Public Debt Ratings are not in the
same "Level", the Level which corresponds to the S&P Public Debt Rating and the
Level which corresponds to the Moody's Public Debt Rating:
Level S&P Moody's
----- --- -------
1 A- or higher A3 or higher
2 BBB+ Baal
3 BBB Baa2
4 BBB- Baa3
5 BB+ Ba1
6 Less than BB+ Less than Ba1
or Unrated or Unrated
; provided that, notwithstanding anything to the contrary contained herein, any
change in the Applicable Public Debt Rating which results from a change in the
Public Debt Rating shall become effective on the day upon which such change in
the Public Debt Rating is publicly announced by the relevant rating agency (or
the date upon which the relevant rating agency ceases to provide a rating) and
shall be effective only with respect to amounts accruing after such date.
"Arrangers" - is defined in the introductory paragraph.
"Arrangers' Counsel" - means O'Melveny & Myers LLP and Ogilvy Renault.
"Asset Sale" means the sale by the Company or any of its Subsidiaries
or by Target or any of its Subsidiaries to any Person other than the Company or
any of its wholly-owned Subsidiaries or Target or any of its Subsidiaries of (i)
any of the stock of Target or any of Target's Subsidiaries or (ii) any assets
(whether tangible or intangible) of Target or any of its Subsidiaries (other
than asset sales or network rationalizations in the ordinary course of
business).
"Assignee" - has the meaning specified in Section 16.1.3.
"Available Revolving Loan Commitment" - means at any time (i) with
respect to all Lenders, the aggregate amount of the Revolving Loan Commitments
of all Lenders at such time less the Total Utilization of Revolving Loan
Commitments at such time and (ii) with respect to a Lender, the amount of the
Available Revolving Loan Commitment of all Lenders at such time multiplied by
the Participation of such Lender.
"Available Term Loan Commitment" - means at any time (i) with respect
to all Lenders, the aggregate amount of the Term Loan Commitments of all Lenders
at such time less the aggregate amount of Advances made to the Borrower pursuant
to the Term Loan Commitments at such time, and (ii) with respect to any Lender,
the amount of the Available Term Loan Commitment of all Lenders at such time
multiplied by the Participation of such Lender.
"Benefit Arrangement" - means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA that is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by the
Company or any ERISA Affiliate of the Company.
"Bid Advance" - means an advance by a Lender to the Borrower as part of
a Bid Borrowing resulting from the auction bidding procedure described in
Section 3.4.
"Bid Borrowing" - means a borrowing consisting of simultaneous Bid
Advances from each of the Lenders whose offers to make one or more Bid Advances
as part of such borrowing has been accepted by the Borrower under the auction
bidding procedure described in Section 3.4.
"Bid Loan" - means an advance by a Lender to the Borrower pursuant to
Section 3.4.
"Borrower" - is defined in the introductory paragraph; provided,
however, that Borrower may include one or more Subsidiaries of Grand Trunk
Corporation organized in the United States that from time to time shall become
parties hereto as borrowers by executing instruments reasonably satisfactory to
Arrangers assuming the obligations of a Borrower under this Agreement in
accordance with Section 11.1.16.
"Borrowing" - means a utilization by the Borrower of the Credit by way
of Advances from the Lenders.
"Business Day" - means a day on which banking institutions in Montreal,
Quebec and New York, New York are open for business and which is also a day on
which dealings in USDollars may be carried on by and between banks in the London
interbank market.
"Canadian Credit Agreement" - means that certain Credit Agreement dated
as of the date hereof by and among the Company, as borrower, the guarantors
listed on the signature pages thereof, the financial institutions listed on the
signature pages thereof, the Bank of Montreal, as administrative agent and
repayment agent, Goldman Sachs Credit Partners L.P. and Bank of Montreal, as
arrangers, and The Bank of Nova Scotia and NBD Bank, as co-documentation agents,
as such agreement may be amended, supplemented or otherwise modified to the
extent permitted under Section 11.4.9.
"Canadian Credit Documents" - means the Canadian Credit Agreement, the
promissory notes issued thereunder and each other document executed in
connection with the Canadian Credit Agreement.
"Canadian Plan" - means each employee benefit plan (other than a
pension plan) which the Company or any one of its Material Subsidiaries
maintains or to which it is obligated to contribute and which is subject to any
Canadian federal Law or provincial Law relating to employee benefit plans (other
than pension plans).
"Canadian Revolving Loans" - means any senior revolving loans borrowed
under the Canadian Credit Agreement and designated as "Revolving Loans"
thereunder.
"Canadian Term Loans" - means the senior term loans borrowed under the
Canadian Credit Agreement and designated as "Term Loans" thereunder.
"Capital Lease Obligations" - shall mean, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) immovable or real property or
movable or personal property, which obligations are required to be classified
and accounted for as a capital lease on a balance sheet of such Person under
generally accepted accounting principles and, for purposes of this Agreement,
the amount of such obligations shall be the capitalized amount thereof,
determined in accordance with generally accepted accounting principles.
"CBRS" - means Canadian Bond Rating Service or its successor.
"CDollars" and the symbol: "C$" each means lawful money of Canada.
"Closing Date" means the date on or prior to March 31, 1998 on which
all of the conditions set forth in Section 10.1 are satisfied or waived as
permitted hereunder. The parties hereto expect the Closing Date to occur on
March 13, 1998.
"Code" - means the United States Internal Revenue Code of 1986, as
amended from time to time. References to sections of the Code as presently in
effect include corresponding provisions of the Code after the date hereof.
"Commercial Letter of Credit Application" - has the meaning ascribed
to it in Section 7.7.1.
"Commercial Letters of Credit" - means a commercial letter of credit in
a face amount of not less than US$500,000, having an expiry date not later than
the Revolving Loan Commitment Termination Date, issued by the Administrative
Agent in accordance with Sections 7.1 and 7.7 for the account of the Borrower
for the purchase of goods in the ordinary course of business, in which the
Lenders participate pursuant to Section 7.2.
"Commitments" - in relation to a Lender means at any time such Lender's
Term Loan Commitment and Revolving Loan Commitment at such time.
"Confidential Information Memorandum" - means that certain Confidential
Information Memorandum prepared by the Agents relating to the Term Loans and
Revolving Loans dated February 1998.
"Consolidated Subsidiaries" - means all Subsidiaries of the Company and
all Excluded Subsidiaries.
"Contaminant" - means, any pollutants, dangerous substances, liquid
waste, industrial waste, hauled liquid waste, toxic substances, hazardous
wastes, hazardous materials, hazardous substances or contaminants as defined or
dealt with in any Environmental Law.
"Conversion Advance" and "Converted Advance" shall each have the
meaning ascribed to such terms in Section 4.3.
"Conversion Date" - means a day which the Borrower has notified the
Administrative Agent in a Notice of Conversion as the date on which the Borrower
will convert Borrowings under the Credit, or a portion thereof, in accordance
with Section 4.3.
"Credit" - means the credit facility in the amount of seven hundred
twenty million USDollars (US$720,000,000) which the Lenders will make available
to the Borrower pursuant to, and in accordance with the terms of, this Agreement
for the purposes permitted hereunder.
"Crown" - means the government of Canada and the government of any
province thereof.
"DBRS" - means Dominion Bond Rating Service or its successor.
"Deficient Canadian Plans" - means any Canadian Plan of the Company or
any one of its Material Subsidiaries as to which the actuarial present value of
all benefit liabilities under such Canadian Plan exceed the value of the assets
held in such Canadian Plan which are allocable to such benefits.
"Depositary" - means Harris Trust Company of New York.
"Drawdown Date" - means a day which the Borrower has notified the
Administrative Agent in a Notice of Borrowing as the date on which the Borrower
requests an Advance in accordance with Section 3.3 or, as applicable, the day on
which the Borrower has requested the issuance of a Letter of Credit in
accordance with Section 7.7.
"Effective Time" means the date and time that the Merger becomes
effective in accordance with the terms of the Merger Agreement, with the effect
set forth in Section 259 of the General Corporation Law of the State of
Delaware.
"Environmental Activity" - means any activity, event or circumstances
in respect of a Contaminant, including, without limitation, its storage, use,
holding, collection, purchase, accumulation, assessment, generation,
manufacture, construction, processing, treatment, stabilization, disposition,
handling or transportation, or its Release, escape, leaching, dispersal or
migration into the natural environment, including the movement through or in the
air, land surface or subsurface strata, surface water or groundwater.
"Environmental Law" - means any and all applicable Laws relating to
pollution or protection of human health or the environment or any Environmental
Activity.
"Equivalent Amount" - means, on any date, the amount in CDollars or
USDollars, as the case may be, which would be obtained on the conversion of an
amount in USDollars into CDollars or CDollars into USDollars, respectively, at
the Bank of Canada's noon mid-point spot rate for the purchase of USDollars with
CDollars or CDollars with USDollars, respectively, as quoted or published or
otherwise made available by the Bank of Canada on such date.
"ERISA" - means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules issued and regulations promulgated
thereunder. References to sections or parts of ERISA as presently in effect
include corresponding provisions of ERISA after the date hereof.
"ERISA Affiliate" - shall mean, with respect to any Person, any other
Person which, together with such Person, would be treated as a single employer
under Section 414 of the Code; provided, however, that Target and its
Subsidiaries shall not be ERISA Affiliates of the Borrower or the Company or
their respective Subsidiaries prior to the STB Approval Date; and provided
further, however, that Target and its Subsidiaries shall not be ERISA Affiliates
of the Borrower or the Company or their respective Subsidiaries for purposes of
determining compliance with Article 2 hereof until 90 days after such date.
"Event of Default" - means any of the events specified in Section 12.1.
"Excess Canadian Pension Obligations" - means, at any time, the sum of
(a) the amount by which the actuarial present value of all pension liabilities
of a Canadian pension plan of the Company and its Material Subsidiaries exceed
the aggregate value of the assets held in such pension plan which are allocable
to such liabilities, plus (b) the aggregate amount of the obligations of the
Company and its Material Subsidiaries in respect of obligations to terminated
Canadian pension plans which are secured by Liens on the assets of the Company
or its Material Subsidiaries.
"Excluded Subsidiaries" - means Canaprev Inc., Domestic Four Leasing
Corporation, CV Properties Incorporated, Autoport Limited, The Canada and Gulf
Terminal Railway Company, Ecorail Inc., Ecorail Enterprises Inc., Canac Inc. and
all Subsidiaries of Canac Inc., Canadian National Transportation Limited, CN
Transactions Inc., The Quebec and Lake St. John Railway Company, The Northern
Consolidated Holding Company Limited, The Canadian Northern Quebec Railway
Company and The Great North Western Telegraph Company of Canada, but in each
case, only for so long as each such company is a company controlled, directly or
indirectly, by the Company.
"Existing Credit Agreements" means (i) the Amended and Restated Credit
Agreement dated July 31, 1997, by and among the Company, as borrower, Borrower,
Western, Duluth and St-Clair, as guarantors, and the financial institutions
named on the signature pages thereof, as lenders, pursuant to which the said
borrower is granted a revolving credit facility of C$275,000,000, and (ii) the
Amended and Restated Credit Agreement dated July 31, 1997, by and among the
Borrower, Western, Duluth and St-Clair, as borrowers, Company, as guarantor, and
the financial institutions named on the signature pages thereof, as lenders,
pursuant to which the said borrowers are granted a revolving credit facility of
US$137,500,000.
"Facility Fee" - means, for each day, the rate per annum (expressed in
basis points, i.e. 1/100 of 1%) set forth in Column B below opposite the
category in Column A below which describes the Applicable Public Debt Rating in
effect on such day:
Column A Column B
-------- --------
Level 1 8
Level 2 10
Level 3 12.5
Level 4 15
Level 5 20
Level 6 25
; provided that if the Applicable Public Debt Rating is comprised of two
"Levels" (x) if there is no more than one Level difference between such Levels,
then the Facility Fee shall be the amount in Column B above corresponding to the
Level in Column A above which is the higher of such Levels and (y) if there is
more than one Level difference between such Levels, then the Facility Fee shall
be the arithmetic average of (a) the amount in Column B above corresponding to
the Level in Column A above which corresponds to the S&P Public Debt Rating and
(b) the amount in Column B above corresponding to the Level in Column A above
which corresponds to the Moody's Public Debt Rating.
"Federal Funds Effective Rate" - means, for any day, an interest rate
per annum (rounding up, if necessary, to the nearest 1/16 of 1%) equal to the
weighted average of the rates on overnight Federal Funds transactions with
members of the Federal Reserve System of the United States of America arranged
by federal funds brokers, as published for such day by the Federal Reserve Bank
of New York or, if such rate is not published for any day which is a Business
Day, the average of the quotations for such day on such transactions received by
the Administrative Agent from three (3) federal funds brokers of recognized
standing selected by it; in the case of a day which is not a Business Day, the
Federal Funds Effective Rate for such day shall be the Federal Funds Effective
Rate for the immediately preceding Business Day.
"Financial Projections" - has the meaning assigned to that term in
Section 10.1.7(iv).
"Fixed Assets" - means, as at any time, the aggregate net book value of
the long-term fixed assets, including but without limitation, tracks and
roadways, buildings and rolling stock, of the Company and its Consolidated
Subsidiaries.
"Fixed Charge Coverage Ratio" - means, with respect to the Company, the
ratio, calculated on a consolidated basis, of (A) the aggregate of (i) Net
Profits, (ii) all items properly classified as net interest expense (whether
expensed or capitalized) on the Company's financial statements in accordance
with generally accepted accounting principles, (iii) the computed net interest
component for any element of Indebtedness of the Company and its Consolidated
Subsidiaries (such as capital leases) which would not be classified as interest
expense pursuant to (ii), (iv) the aggregate of all taxes (including deferred
taxes) based on income of the Company and its Consolidated Subsidiaries
determined in accordance with generally accepted accounting principles, and (v)
operating lease commitments and receivable securitization costs of the Company
and its Consolidated Subsidiaries to (B) the aggregate of (i) all items properly
classified as interest expense (whether expensed or capitalized) on the
Company's financial statements in accordance with generally accepted accounting
principles, (ii) the computed net interest component for any element of
Indebtedness of the Company and its Consolidated Subsidiaries (such as capital
leases) which would not be classified as interest expense pursuant to (i), and
(iii) operating lease commitments and receivable securitization costs of the
Company and its Consolidated Subsidiaries. For the purposes of this Agreement,
the Fixed Charge Coverage Ratio (and related definitions) (x) for the last day
of any fiscal quarter ended on or prior to September 30, 1999 shall be
calculated for the period from and including April 1, 1998 to and including such
last day and (y) for the last day of any fiscal quarter ended after September
30, 1999 shall be calculated for the period of six consecutive fiscal quarters
ended on such last day.
"Fixed Rate Advance" - means a Bid Advance which bears interest at a
fixed rate per annum determined as provided in, and in response to, a Notice of
Bid Borrowing delivered pursuant to Section 3.4.1(i).
"Governmental Authority" - means any country or government, any
province, state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantees" - means, with respect to any Person, any Indebtedness of
another Person which such guaranteeing Person has guaranteed or in respect of
which such guaranteeing Person is liable, contingently or otherwise, including,
without limitation, liable by way of agreement to purchase property or services,
to provide funds for payment, to supply funds to or otherwise invest in such
other Person, or otherwise to assure a creditor of such other Person against
loss, other than endorsements for collection or deposit in the ordinary course
of business; provided that, in the case of the Borrower, the term Guarantee
shall not include any obligations, undertakings or indemnities in respect of
surety bonds and other similar contracts issued on behalf of, or entered into
by, any of its Subsidiaries including AMF Technotransport Management Inc. prior
to the time it ceased to be a Subsidiary in the ordinary course of their
business. The amount of any Guarantee shall be deemed to be the higher of (i) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee is made and (ii) the maximum amount for which
such guaranteeing Person may be liable pursuant to the terms of the instrument
embodying such Guarantee, unless such primary obligation and the maximum amount
for which such guaranteeing Person may be liable are not stated or determinable,
in which case the amount of such Guarantee shall be such guaranteeing Person's
maximum reasonably anticipated liability in respect thereof as determined by the
Majority Lenders, in good faith.
"Guarantors" - means, on any date, (i) each of the Company, Western,
Duluth, St-Clair, CNR Properties, (ii) any Material Subsidiary that, on or prior
to such date, becomes a guarantor pursuant to Section 11.1.12 and (iii) in the
event any Person other than Grand Trunk Corporation becomes a borrower under
this Agreement, Grand Trunk Corporation pursuant to Section 11.1.16.
"Hostile Acquisition" - means an Acquisition by the Company or any of
its Subsidiaries in respect of which the board of directors of the target
company or management of the target Person (if the target is not a company) has
not recommended acceptance of such Acquisition.
"Indebtedness" - means, without duplication, for any Person:
(a) obligations for borrowed money, including obligations evidenced by
bonds, notes, debentures or other similar instruments;
(b) obligations under financial guarantees, letters of credit or
letters of guarantee or obligations to financial institutions who
issued such letters of credit or letters of guarantee for the account
of such Person;
(c) obligations under banker's acceptances;
(d) obligations representing the deferred purchase price of property or
services except trade accounts payable of such Person arising in the
ordinary course of business;
(e) obligations, whether or not assumed, secured by Liens on, or
payable out of the proceeds or production from, property owned by such
Person;
(f) Capital Lease Obligations;
(g) Guarantees; and
(h) obligations under interest rate protection agreements, currency
hedging agreements and commodity hedging agreements
; provided that any borrowings made by the Company and CNR Properties in
connection with the Reorganization and any borrowings (other than Advances) by
the Borrower and Company in connection with the acquisition of Target Common
Stock pursuant to the Tender Offer and the Merger shall not constitute
Indebtedness so long as such borrowings are repaid in full on the Business Day
on which they have been made.
"Initial Funding Date" means the date on or prior to March 31, 1998 on
which all of the conditions set forth in Section 10.2 are satisfied or waived as
permitted hereunder. The parties hereto expect the Initial Funding Date to occur
on March 18, 1998.
"Intercreditor Agreement" - means that certain Intercreditor Agreement
dated as of the date hereof by and among the Administrative Agent, as
representative of the Lenders, the administrative agent under the Canadian
Credit Agreement and the Repayment Agent, as such agreement may be amended,
supplemented or otherwise modified to the extent permitted under Section 15.10.
"Interest Payment Date" - means (i) in respect of the US Base Rate
Loan, the last Business Day of each and every month, and the date of any
repayment or prepayment thereof, and (ii) in respect of the Libor Loan, for each
Libor Loan Portion the last day of each Interest Period in respect of such Libor
Loan Portion, the date of any repayment or prepayment thereof and, if any
Interest Period is longer than three months, the last day of the three month
period starting on the first day of such Interest Period, the last day of each
successive three month period and the last day of such Interest Period.
"Interest Period" - for each Libor Loan Portion means (a) the first
period of approximately one month, two months, three months, six months or,
subject to availability, nine or twelve months selected by the Borrower and
notified to the Administrative Agent in accordance with Section 5.4, which
period shall commence on the Drawdown Date or Conversion Date, as the case may
be, of such Libor Loan Portion, and (b) each of the successive periods of
approximately one month, two months, three months, six months or, subject to
availability, nine or twelve months in respect of such Libor Loan Portion
selected by the Borrower and notified to the Administrative Agent in accordance
with Section 5.4, each of which shall commence on the last day of the
immediately preceding Interest Period in respect of such Libor Loan Portion;
provided, however, that:
(i) the duration of any Interest Period with respect to any portion of
the Term Loans which otherwise would end after the Term Loan Maturity
Date applicable to each Lender shall end on such Term Loan Maturity
Date and the duration of any Interest Period with respect to any
portion of the Revolving Loans which otherwise would end after the
Revolving Loan Commitment Termination Date applicable to each Lender
shall end on such Revolving Loan Commitment Termination Date;
(ii) Interest Periods commencing on the same day for Libor Advances
comprising part of the same Libor Loan Portion shall be of the same
duration;
(iii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day;
provided, in the case of any Interest Period for a Libor Advance, that,
if such extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day; and
(iv) there may not, at any one time, be more than five different
Interest Periods in effect for Libor Advances.
"Investments" - means any loan, advance, deposit, extension of credit,
capital contribution or investment to or in any Person, or any purchase or other
acquisition for a consideration of any evidences of Indebtedness, capital stock
or other securities of any Person or the acquisition of assets of another Person
in circumstances which would qualify such acquisition as a bulk sale of an
enterprise.
"Law" - means all applicable provisions of statutes, ordinances,
decrees, rules, regulations, treaties and all applicable determinations,
rulings, orders and decrees of Governmental Authorities.
"Lender" - means any Person that (i) either is (a) a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of America
or any state or political subdivision thereof or (b) otherwise completely exempt
from U.S. federal withholding tax with respect to all payments to be made by the
Borrower hereunder, and (ii) either (a) is designated as a Lender on the
signature pages hereof and has not assigned all of its rights and obligations in
the portion of the Credit available to the Borrower or (b) becomes a Lender
after the date hereof by virtue of an assignment by a Lender of such Lender's
rights and obligations hereunder and makes the representations set forth in
Section 16.1.11, and "Lenders" means such Persons, collectively.
"Letter of Credit Exposure" - means at a particular time, the sum in
USDollars of (i) the undrawn and unexpired aggregate amount of all Letters of
Credit outstanding and (ii) the aggregate amount of drawings under the Letters
of Credit which have not been reimbursed pursuant to Section 7.8.2.
"Letters of Credit" - means, collectively, the Commercial Letters of
Credit and the Standby Letters of Credit.
"LIBOR" - means, for any Interest Period for each Libor Loan Portion,
an interest rate per annum determined on the basis of the rate for deposits in
US Dollars for a period equal to such Interest Period commencing on the first
day of such Interest Period appearing on Page 3750 of the Telerate screen as of
11:00 A.M. (London time) two Business Days prior to the beginning of such
Eurodollar Interest Period; provided, however, that in the event that such rate
does not appear on Page 3750 of the Telerate Service (or otherwise on such
service), LIBOR shall be (i) determined by reference to such other publicly
available service for displaying Eurodollar rates as may be agreed upon by
Administrative Agent and the Borrower or (ii) in the absence of such agreement,
the rate per annum equal to the arithmetic average (rounded upwards, if
necessary, to the nearest 1/16 of 1% per annum) of the rate per annum at which
deposits in USDollars are offered by the principal office of each of the
Reference Lenders in London to prime banks in the London Interbank Market at
approximately 11:00 a.m. (London time) two Business Days before the first day of
such Interest Period in an amount substantially equal to the amount of the Libor
Loan Portion to be outstanding during such Interest Period and for a period
equal to such Interest Period. LIBOR (as calculated in accordance with clause
(ii) of the preceding proviso) for each Interest Period for each Libor Loan
Portion shall be determined by the Administrative Agent on the basis of
applicable rates furnished to and received by the Administrative Agent from the
Reference Lenders two Business Days before the first day of such Interest Period
subject, however, to the provisions of Section 5.6.1, and provided, however,
that for the purposes of Section 3.4, the preceding sentence shall be read with
reference to the Lender offering the Bid Advance rather than the Reference
Lenders.
"Libor Advance" - means an advance in USDollars to which LIBOR is
applicable pursuant to Section 3.3 or Section 3.4, as the context requires.
"Libor Loan" - means at any given time during the term of this
Agreement the Loan, or that portion of the Loan, upon which interest is payable
at a rate determined by reference to LIBOR.
"Libor Loan Portion" - means the amount of the Libor Loan or any
portion of the Libor Loan in respect of which the Borrower has selected an
Interest Period or Interest Periods commencing on the same date and having the
same duration.
"Lien" - means a mortgage, hypothecation, legal hypothecation, prior
claim, pledge, privilege, lien, charge or encumbrance, whether fixed or
floating, on, or any security interest in any property, whether immovable or
real, movable or personal, or mixed, tangible or intangible or a pledge or
hypothecation thereof or any conditional sale agreement or other title retention
agreement or equipment trust relating thereto or any lease relating to property
which would be required to be accounted for as a capital lease on a balance
sheet; provided, however, that any grant of trackage, haulage, switching or
running rights or similar rights shall not constitute a "Lien".
"Loan" - at any given time means the aggregate principal amount of all
Advances outstanding at such time and the Letter of Credit Exposure.
"Loan Party" - means the Borrower and each Guarantor, and "Loan
Parties" means all such Persons, collectively.
"Loss" - means any loss, including any expense, cost, damage, penalty,
fine, liability or obligation, which results, or may result, directly or
indirectly, from any event, fact or circumstance or series of events, facts or
circumstances.
"Majority Lenders" - means at any time:
(i) with respect to any amendment, modification or waiver of
any provision contained in Articles 2, 10, 11 or 12 (other than
Sections 12.1.1, 12.1.2 and 12.1.11) of this Agreement, or the
definitions in Article 1 as used therein, including without limitation
any waiver of compliance therewith as a condition to making any Advance
or Bid Advance, Lenders and lenders party to the Canadian Credit
Agreement having or holding more than 50% of the sum of (w) prior to
funding of the Term Loans, the aggregate Term Loan Commitments and,
upon and after funding of the Term Loans, the aggregate principal
amount of Term Loans outstanding at such time, plus (x) prior to
funding of the Canadian Term Loans, the aggregate commitments to make
Canadian Term Loans under the Canadian Credit Agreement and, upon and
after funding of the Canadian Term Loans, the aggregate principal
amount of Canadian Term Loans outstanding at such time, plus (y) prior
to the cancellation or termination of the Revolving Loan Commitments,
the aggregate Revolving Loan Commitments at such time and, upon and
after the termination or cancellation of the Revolving Loan
Commitments, the aggregate principal amount of the Revolving Loans and
Bid Loans outstanding at such time and participations in the Letter of
Credit Exposure at such time, plus (z) prior to the cancellation or
termination of the commitments to make Canadian Revolving Loans, the
aggregate amount of such commitments at such time and, upon and after
the termination or cancellation of such commitments, the aggregate
principal amount of the Canadian Revolving Loans and Bid Loans
outstanding at such time and participations in the Letter of Credit
Exposure (as such terms are defined in the Canadian Credit Agreement)
at such time; and
(ii) except as otherwise provided in clause (i) of this
definition, Lenders having or holding more than 50% of the sum of (w)
prior to funding of the Term Loans, the aggregate Term Loan Commitments
and, upon and after funding of the Term Loans, the aggregate principal
amount of Term Loans outstanding at such time, plus (y) prior to the
cancellation or termination of the Revolving Loan Commitments, the
aggregate Revolving Loan Commitments at such time and, upon and after
the termination or cancellation of the Revolving Loan Commitments, the
aggregate principal amount of the Revolving Loans and Bid Loans
outstanding at such time and participations in the Letter of Credit
Exposure at such time.
"Material Adverse Effect" - means a material adverse change in or
effect on, either individually or in the aggregate, the condition, operations,
properties, business or results of operations of the Company and its
Subsidiaries, taken as a whole, which adversely affects or could reasonably be
expected to adversely affect the ability of the Borrower and the Guarantors,
taken as a whole, to perform their obligations under this Agreement or the
Canadian Credit Agreement in accordance with the terms hereof and thereof,
provided that if the only material adverse change or effect does not or could
not reasonably be expected to result in a Loss (net of any insurance proceeds
actually received) to the Company or its Subsidiaries in the aggregate of an
amount equal to more than three percent (3%) of the Company's consolidated
Tangible Net Worth, based upon the most recent financial statements of the
Company and its Consolidated Subsidiaries delivered pursuant to Section 11.1
(calculated, at any date, on a pro forma basis giving effect to the Merger),
such material adverse change or effect will be deemed not to constitute a
Material Adverse Effect. Except as otherwise provided herein, the final
determination of whether any change or effect constitutes a Material Adverse
Effect shall be made by the Majority Lenders, in their reasonable opinion.
"Material Subsidiary" - means each of the Guarantors and, at any date,
any Subsidiary of the Company which has a Tangible Net Worth in an amount equal
to or greater than two percent (2%) of the Company's consolidated Tangible Net
Worth, based upon the most recent financial statements of such Subsidiary and of
the Company and its Consolidated Subsidiaries delivered pursuant to Section 11.1
(calculated, at any date, on a pro forma basis giving effect to the Merger) (or
the Equivalent Amount thereof in USDollars if organized under the laws of the
United States or any State thereof or the District of Columbia).
"Merger" - means the merger of Merger Sub with and into Target in
accordance with the terms of the Merger Agreement with Target being the
surviving corporation in such Merger.
"Merger Agreement" means that certain Agreement and Plan of Merger by
and among the Company, Merger Sub and Target dated as of February 10, 1998, as
amended by Amendment No. 1 thereto dated as of March 4, 1998 and as such
agreement may be further amended from time to time thereafter to the extent
permitted under Section 11.4.8.
"Merger Date" means the date that the Merger becomes effective in
accordance with the terms of the Merger Agreement.
"Merger Sub" means Blackhawk Merger Sub, Inc., a Delaware corporation
and an indirect wholly-owned Subsidiary of the Company.
"Minimum Shares" means 50.1% of the outstanding shares of Target Common
Stock, on a fully-diluted basis, required to be purchased by Merger Sub in order
to cause the Merger to occur, as adjusted in accordance with any amendment to
the Tender Offer Materials permitted hereunder.
"Minor Title Defects" - means title defects or irregularities which are
of a minor nature and in the aggregate will not substantially impair the use of
the property affected by such title defect or irregularity for the purposes for
which it is held by the owner thereof, nor substantially diminish any Liens
thereon.
"Money Market Loan" - means a loan by a Lender to the Borrower pursuant
to Section 3.5.
"Money Market Reduction" - has the meaning specified in Section 3.2.1.
"Moody's" - means Moody's Investors Service, Inc. or its successor.
"Multiemployer Plan" - means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which the Company or
any ERISA Affiliate of the Company is then making, or, pursuant to an applicable
collective bargaining agreement, accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be an ERISA Affiliate of the Company during
such five-year period.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale, cash
payments (including any cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with such Asset Sale, including but not limited to (i)
income taxes reasonably estimated to be actually payable as a result of any gain
recognized in connection with such Asset Sale, (ii) payment of the outstanding
principal amount of, premium or penalty, if any, and interest on any
Indebtedness that is secured by a Lien on the stock or assets in question and
that is required to be repaid under the terms thereof as a result of such Asset
Sale, and (iii) any amount to be paid to the shareholders of Target as
contemplated in the memorandum of understanding dated March 2, 1998, among the
Company, the plaintiffs to certain class actions brought on behalf of
stockholders of the Company challenging the acquisition by the Company of Target
Common Stock and the Merger and their respective counsel, following a sale of
any common stock of Target upon failure to obtain approval by the STB of the
Company's acquisition of control of Target.
"Net Profits" - means, as at any time, the sum of (i) the net after tax
income or earnings of the Company and its Consolidated Subsidiaries, excluding
non-recurring gains or losses resulting from a re-evaluation of any of its Fixed
Assets occurring after the Closing Date, plus (ii) special charges and
unrealized foreign exchange losses related to long term debt denominated in
foreign currencies, in each case to the extent deducted in determining such net
after tax income or earnings, minus (iii) unrealized foreign exchange gains
related to long term debt denominated in foreign currencies, to the extent added
in determining such net after tax income or earnings, minus (iv) the cash effect
of special charges described in clause (ii) recorded following the date hereof,
in each case calculated on a consolidated and annual or quarterly basis, as the
case may be, as reflected on the then most recent consolidated statement of
income of the Company and its Consolidated Subsidiaries.
"Non-Railway Properties" - means all immovable or real properties of
the Company and its Subsidiaries, other than Properties of the Company and its
Consolidated Subsidiaries.
"Notice of Bid Borrowings" - has the meaning specified in Section
3.4.1(i).
"Notice of Borrowing" - means an irrevocable notice addressed to the
Administrative Agent in substantially the form of Schedule 1.1B, specifying in
respect of a proposed Borrowing the Drawdown Date, the amount, and, in respect
of a proposed Borrowing to which LIBOR will be applicable, the initial Interest
Period.
"Notice of Conversion" - means an irrevocable notice delivered by the
Borrower pursuant to Section 4.3 substantially in the form of Schedule 1.1C.
"Notice of Optional Repayment" - means an irrevocable notice delivered
by the Borrower pursuant to Section 4.2.1 in substantially the form of Schedule
1.1D.
"Obligations" - means all obligations of any Loan Party, from time to
time owed to the Agents, Lenders or any of them under this Agreement (including
the Guarantee in Article 17) whether for principal, interest, reimbursement of
amounts drawn under Letters of Credit, fees, expenses, indemnification or
otherwise.
"Officers' Certificate" - means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer) or its president or one of its vice presidents or its chief
legal officer and by its chief financial officer or its treasurer in their
respective capacities as such officers; provided that every Officers'
Certificate with respect to the compliance with a condition precedent to the
making of the Advances hereunder shall include a statement that the officers
making or giving such Officers' Certificate certify that, to the best of their
knowledge after due inquiry, the relevant condition has been complied with.
"Optional Repayment Date" - means each day which the Borrower has
notified the Administrative Agent in a Notice of Optional Repayment as the date
on which the Borrower shall repay the Borrowings under the Credit, or a portion
thereof, in accordance with Section 4.2.1.
"Other Target Shares" has the meaning assigned to that term in the
Preliminary Statements to this Agreement.
"PBGC" - means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Participant" - has the meaning specified in Section 16.1.3.
"Participation" - of a Lender means the percentage of the Total
Commitment indicated opposite its name on Schedule 1.1A annexed hereto or, as
the context requires, the amount of such Participation in any Advance or in any
repayment thereof or, as the context may require, in any payment of interest or
fees or other payment, as adjusted to give effect to any assignments made to or
by such Lender made pursuant to this Agreement.
"Permitted Business Acquisition" - means an Acquisition of a business
similar to or in support of the railway business provided that (i) any
Indebtedness incurred by the Company or its Subsidiaries in connection therewith
does not create any Event of Default, or would create an Event of Default but
for the requirement that notice be given or time elapse or both, (ii) all
transactions related thereto shall be consummated in accordance with applicable
Laws, and (iii) at least 51% of the controlling interest must be owned directly
by the Company or its Subsidiaries. Borrower shall be permitted to acquire such
interests and assets by incurring related Indebtedness as necessary to
consummate all related transactions, provided no Event of Default or event
which, but for the requirement that notice be given or time elapse or both,
would be an Event of Default, results therefrom.
"Permitted Encumbrances" - means, as at any time, any one or more of
the following:
(i) reservations in any original grants from the Crown of any land or
interest therein, statutory exceptions to title and reservations of
mineral rights (including coal, oil and natural gas) in any grants from
the Crown or from any other predecessors in title;
(ii) servitudes of rights of way or for purposes of public utility, or
for encroachments, rights of view or otherwise, including, without in
any way limiting the generality of the foregoing, the sewers, drains,
gas and water mains, steam transport, electric light and power or
telephone and telegraph conduits, poles and cables, pipelines or zoning
restrictions affecting the use of the Company's or any of its
Subsidiaries' immovable properties which will not materially or
adversely impair the use for which any one of the Company's or any such
Subsidiary's immovable properties is intended nor substantially
diminish any Liens thereon;
(iii) any Lien for taxes, assessments or other governmental charges or
levies not yet due or, if due, the validity of which is being contested
diligently and in good faith by or on behalf of the Company or any of
its Subsidiaries, provided the action to enforce the same has not
proceeded to final non-appealable judgment and adequate provision has
been made for the payment thereof in accordance with generally accepted
accounting principles;
(iv) any Lien of any judgment rendered or claim filed against the
Company or any of its Subsidiaries, which the Company or any such
Subsidiaries or others on its behalf shall be contesting diligently and
in good faith, provided the action to enforce the same has not
proceeded to final non-appealable judgment and adequate provision has
been made for the payment thereof in accordance with generally accepted
accounting principles;
(v) any Lien of any craftsman, workman, builder, contractor, supplier
of materials, architect, engineer or subcontractor of any other similar
Lien related to the construction or the renovation of any property,
provided that such Lien secures an obligation whose term has not
expired or that the Company or any of its Subsidiaries is not in
default to perform same, or if its term has expired or the Company or
any of its Subsidiaries is in default to perform same, provided that
the Company or any such Subsidiary commences action within a delay of
less than fifteen (15) days of its registration or publication to cause
its cancellation or radiation unless the validity of such Lien is being
contested diligently and in good faith by or on behalf of the Company
or any such Subsidiary provided the action to enforce the same has not
proceeded to final non-appealable judgment and adequate provision has
been made for the payment thereof in accordance with generally accepted
accounting principles;
(vi) Minor Title Defects;
(vii) the pledges or deposits made pursuant to Laws relating to
workmen's compensation or similar Laws, or deposits made in good faith
in connection with offers, tenders, leases or contracts (excluding,
however, the borrowing of money or the repayment of money borrowed),
deposits of cash or securities in order to secure appeal bonds or bonds
required in respect of judicial proceedings;
(viii) undetermined or inchoate Liens, arising or potentially arising
under statutory provisions which have not at the time been filed or
registered in accordance with applicable Law or of which written notice
has not been duly given in accordance with applicable Law or which,
although filed or registered, relate to obligations not due or
delinquent;
(ix) the rights reserved to or vested in municipalities or governmental
or other public authorities or agencies by statutory provisions or by
the terms of leases, licenses, franchises, grants or permits, which
affect any land, to terminate any such leases, licenses, franchises,
grants or permits or to require annual or other payments as a condition
to the continuance thereof;
(x) securities to public utilities or to any municipalities or
governmental or other public authorities when required by the utility,
municipality, governmental or other public authority in connection with
the supply of services or utilities to the Company or its Subsidiaries;
(xi) any Lien created on assets of the Company or its Subsidiaries
acquired or constructed after the date of this Agreement, and any Lien
created on the shares or assets of a business entity acquired by the
Company or any of its Subsidiaries after the date of this Agreement, in
each case provided such Lien is created within one hundred and twenty
(120) days after the time of purchase, delivery or construction and
commencement of full operation thereof, whichever is later, as security
for the payment of any part of the purchase price or construction cost
of such assets or of such business entity;
(xii) any Lien existing on assets acquired by the Company or any of its
Subsidiaries at the time of such acquisition or on the outstanding
shares or assets of, or in respect of indebtedness or other obligations
of, a corporation or firm at the time such corporation or firm becomes
a Subsidiary of the Company or is merged into or consolidated with the
Company or a Subsidiary of the Company or at the time of sale, lease or
other disposition of the assets of a corporation or firm as an entirety
or substantially as an entirety to the Company or a Subsidiary of the
Company;
(xiii) any present or future conditional sales agreement or other title
retention agreement (including any capital leases) with respect to
assets of the Company or its Subsidiaries acquired after the date of
this Agreement or any Lien on rolling stock or equipment of the Company
or its Subsidiaries acquired after the date of this Agreement;
(xiv) [intentionally left blank];
(xv) any Lien created as a result of the securitization or monetization
of assets in the ordinary course of business of the Company or its
Subsidiaries permitted by the terms of this Agreement;
(xvi) any Lien granted as part of any refundings or renewals of the
outstanding amounts referred to in clauses (xi) to (xv) above or of any
secured debt of the Company or any of its Subsidiaries outstanding as
of the date of this Agreement, provided such Lien is restricted to the
same collateral;
(xvii) Liens on, deposits and pledges of, in trust or otherwise,
funding proceeds in the form of cash or Permitted Investments raised in
connection with financing or leasing of rolling stock by the Company or
any of its Subsidiaries and to be subsequently utilized to complete the
purchase and/or leasing of said rolling stock;
(xviii) Liens existing on the date of this Agreement as reflected on
the financial statements of the Company and its Consolidated
Subsidiaries as of the fiscal year ended December 31, 1997 and of the
Target and its Subsidiaries as of the STB Approval Date;
(xix) any Lien created on Non-Railway Properties as security for and in
satisfaction of requirements under workmen's compensation or similar
Laws, provided the aggregate amount at any time secured by such Liens
shall not at any time exceed C$175,000,000; and
(xx) any Lien on monies in relation to leasing or financing of rolling
stock entered into after the date of this Agreement by the Company or
its Subsidiaries, provided the aggregate amount at any time secured by
such Liens shall not exceed C$50,000,000.
"Permitted Investments" - means:
(a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the government of Canada or
the United States of America (or by any agency thereof to the extent
such obligations are backed by the full faith and credit of Canada or
the United States of America);
(b) marketable general obligations issued by any province of Canada or
by any state of the United States of America or any political
subdivision of any such province or state or any corporation or public
instrumentality thereof and, at the time of acquisition, having a
credit rating of "A-1" from S&P or its equivalent from Moody's, CBRS or
DBRS;
(c) investments in commercial paper or other similar marketable
promissory notes maturing no longer than one (1) year from the date of
acquisition thereof and having, at such date of acquisition, a credit
rating of "A-1" from S&P or its equivalent from Moody's, CBRS or DBRS;
(d) investments in Canadian, U.S. or Eurodollar certificates of
deposit, banker's acceptances and time deposits maturing within one (1)
year from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by any
Canadian or U.S. offices of any commercial bank organized or licensed
under any Laws of Canada or the United States of America or any
province or state thereof having a credit rating of "A-1" from S&P or
its equivalent from Moody's, CBRS or DBRS;
(e) investments in money market funds or other mutual funds that invest
in, or repurchase obligations that are comprised of, the types of
Permitted Investments described in clauses (a) through (d) above;
(f) investments in obligations or securities received in settlement of
debts (created in the ordinary course of business) owing to the Company
or any of its Subsidiaries or any of their Affiliates and joint
ventures;
(g) investments (other than intercompany debt referred to in clause (h)
below) by the Company in its present or future Consolidated
Subsidiaries, Affiliates, joint ventures, partnerships, associations,
trusts and any other forms of business ventures and intercompany debt
relating to financial and tax planning actions of the Company or its
Subsidiaries, as the case may be;
(h) extensions of credit and intercompany debt to any purchaser of
inventory or services in the ordinary course of business and for the
purpose of carrying the same;
(i) any investments of the funding proceeds described in clause (xvii)
or of the monies described in clause (xx) under the definition of
Permitted Encumbrances;
(j) Permitted Business Acquisitions;
(k) seller notes received as consideration with respect to any
disposition of assets (other than any disposition of stock of Target)
permitted under this Agreement; and
(l) Investments made in connection with the Reorganization;
provided, however, that no investments may be made by the Company or any of its
Subsidiaries pursuant to clauses (g) and (j) through (l) above if an Event of
Default exists at the time of such investments or would result therefrom unless
the Administrative Agent, by prior written consent, agrees with such
investments.
"Person" - means any legal or natural person, corporation, company,
firm, joint venture, partnership, whether general, limited or undeclared, trust,
association, unincorporated organization, Governmental Authority or other entity
of whatever nature.
"Plan" - means at any time any employee pension benefit plan (other
than a Multi-employer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Code and either (a) is
maintained, or contributed to, by the Company or any ERISA Affiliate of the
Company for employees of the Company or any ERISA Affiliate of the Company, or
(b) has at any time within the preceding five years been maintained, or
contributed to, by the Company or any Person which was at such time an ERISA
Affiliate of the Company for employees of the Company or any Person which was at
such time an ERISA Affiliate of the Company.
"Pro Forma Closing Balance Sheet" - has the meaning assigned to that
term in Section 2.1.7.
"Prohibited Transaction" - shall mean any transaction involving any
Plan which is proscribed by Section 406 of ERISA or Section 4975 of the Code and
for which an exception is not available under Section 408 of ERISA or Section
4975 of the Code.
"Properties" - means all main and branch lines of railway, including
all immovable or real properties used as the right of way for such lines of the
Company and its Consolidated Subsidiaries.
"Public Debt Rating" - means, as of any date, the rating for any class
of long-term public or private unsecured debt securities issued by the Company
(i) with respect to S&P, as most recently announced by S&P, or (ii) with respect
to Moody's, as most recently announced by Moody's, as the case may be; provided
that, being Unrated, whether or not so announced, shall be the lowest possible
rating.
"Reference Lenders" - means the Administrative Agent and NBD Bank.
"Reimbursement Obligation" - means the obligation of the Borrower to
reimburse the Administrative Agent pursuant to Section 7.8.
"Related Agreements" - means, collectively, the Merger Agreement and
the Voting Trust Agreement.
"Release" - means discharge, spray, inject, inoculate, abandon,
deposit, spill, leak, seep, pour, emit, empty, throw, dump, place and exhaust,
and when used as a noun has a similar meaning.
"Reorganization" - means the sale, transfer and assignment by the
Company to CNR Properties of all or substantially all of the Canadian real
estate assets held by the Company (other than in the Province of Quebec) on the
date hereof, any borrowings by the Company and CNR Properties in connection
therewith (so long as such borrowings (other than intercompany loans from the
Company to CNR Properties) are repaid in full on the Business Day on which they
have been made or on the next following Business Day) and all other transactions
entered into by the Company and CNR Properties in connection therewith, all
substantially on the terms described by the Company to the Agents prior to the
date hereof.
"Repayment Agent" - means Bank of Montreal or any successor thereto
under the Intercreditor Agreement.
"Reportable Event" - means a reportable event as described in Section
4043 of ERISA for which notice is required to be given to the PBGC.
"Revolving Loan Commitment" - in relation to a Lender means at any time
until cancelled or terminated in accordance with this Agreement, the commitment
of such Lender to make Revolving Loans pursuant to Section 3.2 (in the case of
each initial Lender being in the amount set opposite its name on Schedule 1.1A
annexed hereto, as such Lender's Revolving Loan Commitment from the Applicable
Lending Office or Offices shown thereon), as adjusted to give effect to any
assignment or reductions made pursuant to this Agreement or any increases
thereto pursuant to Section 4.7.
"Revolving Loan Commitment Termination Date" - means, with respect to
each Lender, the earlier of (i) the fifth anniversary of the Initial Funding
Date (but no later than March 31, 2003) and (ii) the date on which the Revolving
Loan Commitment of such Lender shall have terminated pursuant to Section 4.6 or
12.2.
"Revolving Loans" means the Advances made by Lenders to the Borrower
pursuant to Section 3.2.
"S&P" - means Standard and Poor's Rating Group or its successor.
"Shareholders' Equity" - means, for any Person, as at any time, the sum
of all issued and fully paid capital stock of that Person at par or stated
value, paid-in capital surplus, contributed capital and retained earnings and
Subordinated Debt of that Person, but exclusive of (i) any goodwill (other than
goodwill associated with the acquisition of Target Common Stock and the Merger),
and (ii) any write-up occurring after the Closing Date of the value of any asset
if made on the books of that Person which impacts shareholders' equity on the
most recent consolidated balance sheet of that Person and its Subsidiaries, the
whole calculated at such time on a consolidated and quarterly financial basis.
"Standby Letter of Credit Application" - has the meaning ascribed to it
in Section 7.7.2.
"Standby Letter of Credit" - means an irrevocable letter of credit or
bank letter of guarantee, in either case in a face amount of not less than
US$500,000, having an expiry date not later than the Revolving Loan Commitment
Termination Date, issued by the Administrative Agent in accordance with Sections
7.1 and 7.7 for the account of the Borrower in respect of all obligations of the
Borrower incurred pursuant to contracts made or performances undertaken or to be
undertaken or like matters relating to contracts to which the Borrower is or
proposes to become a party in the ordinary course of its business, in which the
Lenders participate pursuant to Section 7.2.
"STB" - means the Surface Transportation Board, an agency of the
Federal Government of the United States of America.
"STB Approval Date" - means the date on which the STB's approval of the
acquisition of control of Target by the Company, without any terms or conditions
not satisfactory to the Company, becomes effective.
"Subordinated Debt" - means indebtedness for borrowed money incurred by
a Person which is validly and effectively subordinated and postponed in all
respects including principal, interest, premium if any, security and rank, to
the obligations, liabilities and indebtedness owing to the Lenders under this
Agreement by way of an agreement in form and substance satisfactory to the
Majority Lenders provided that, without limitation, (i) such indebtedness is
treated as subordinated debt in accordance with generally accepted accounting
principles, (ii) such indebtedness is not recognized or classified as debt by
S&P and Moody's, (iii) such indebtedness has a maturity date of at least five
(5) years from the date of its issue or creation and, in any event, at least one
(1) year beyond the then current Revolving Loan Commitment Termination Date,
(iv) without limiting the foregoing, the Majority Lenders shall be entirely
satisfied with the covenants and default clauses in the agreement pursuant to
which such indebtedness is created, and (v) the terms of the instrument
evidencing such indebtedness or under which such indebtedness is outstanding
reflect the provisions of this definition to the satisfaction of the Majority
Lenders.
"Subsidiary" - of a Person means a company or corporation controlled by
that Person but, in the case of the Company, does not include any Excluded
Subsidiaries. Notwithstanding the foregoing, except for purposes of the
definition of "Material Adverse Effect" and for purposes of the calculations in
and determining compliance with Section 11.2, unless otherwise specified herein,
Target and its Subsidiaries shall not be deemed Subsidiaries of the Borrower for
purposes of this Agreement until the STB Approval Date; provided, that Target
and its Subsidiaries shall not be deemed Subsidiaries of the Borrower for
purposes of determining compliance with Article 2 hereof until 90 days after
such date.
"Surviving Corporation" has the meaning assigned to that term in the
Preliminary Statements to this Agreement.
"Surviving Corporation Common Stock" has the meaning assigned to that
term in the Preliminary Statements to this Agreement.
"Tangible Net Worth" - means, for any Person, as of any date, the
Shareholders' Equity of such Person and its Subsidiaries on the then most recent
consolidated balance sheet of such Person and its Subsidiaries; excluding,
without duplication, however, from the determination thereof: capitalized
research and development expenses, trademarks, trade names, copyrights, patents,
patent applications, licenses and rights in any thereof, and other similar
intangibles.
"Target Common Stock" has the meaning assigned to that term in the
Preliminary Statements to this Agreement.
"Tax" - means all taxes, assessments, levies, imposts, stamp taxes,
duties, charges to tax, fees, deductions, withholdings and any restrictions or
conditions resulting in a charge imposed, levied, collected, withheld or
assessed as of the date of this Agreement or at any time in the future, and all
penalty, interest and other payments on or in respect thereof.
"Tender Offer" means the offer by Merger Sub to purchase for cash
shares of Target Common Stock pursuant to the Tender Offer Materials.
"Tender Offer Materials" means the Tender Offer Statement on Schedule
14D-1 filed by the Company and Merger Sub on February 13, 1998 with the
Securities and Exchange Commission pursuant to Section 14(d)(1) of the Exchange
Act, together with all exhibits, supplements and amendments thereto and any
other amendments prior to the date hereof and (ii) any amendments after the date
hereof permitted under Section 11.4.8.
"Tendered Target Shares" means all shares of Target Common Stock
tendered to and purchased by Merger Sub pursuant to the Tender Offer.
"Term Loan Commitment" - in relation to a Lender means at any time
until cancelled or terminated in accordance with this Agreement, the amount set
opposite its name on Schedule 1.1A annexed hereto as such Lender's Term Loan
Commitment from the Applicable Lending Office or Offices shown thereon.
"Term Loan Maturity Date" - means, with respect to each Lender, the
earlier of (i) the first anniversary of the Initial Funding Date and (ii) the
date on which the Term Loan Commitment of such Lender shall have terminated
pursuant to Section 4.6 or 12.2.
"Term Loans" means the Advances made by the Lenders to the Borrower
pursuant to Section 3.1.
"Total Capitalization" - means Total Debt plus Shareholders' Equity
of the Company.
"Total Commitment" - means the aggregate of the Commitments of all
Lenders less any amounts by which they shall have been cancelled, terminated or
reduced pursuant to Section 4.6 or Section 12.2.
"Total Debt" - means, at any time, the aggregate of all Indebtedness of
the Company and its Consolidated Subsidiaries plus the present value (using a
discount rate of 10% per annum) of all operating lease commitments of the
Company and its Consolidated Subsidiaries less available cash and cash
equivalents of the Company and its Consolidated Subsidiaries, all at such time.
For the purposes of the foregoing, the expression "cash equivalents" means the
Permitted Investments set forth in paragraphs (a) through (e) of the definition
of Permitted Investments in this Section 1.1.
"Total Utilization of Revolving Loan Commitments" - means at any time
the aggregate of (a) the sum of the amount of Advances made to the Borrower
pursuant to the Revolving Loan Commitments and the amount of Bid Advances, and
(b) the amount of any Letter of Credit Exposure at such time.
"Transaction Costs" means the sum of all fees, costs and other similar
amounts payable by the Company or Merger Sub in connection with the transactions
contemplated by this Agreement, the Tender Offer Materials and the Related
Agreements.
"Unrated" - means, as of any date, that S&P or Moody's, as applicable,
on such date has not announced the rating for any class, or has terminated a
prior rating for each class, of long-term public or private unsecured debt
securities issued by the Company.
"US Base Rate" - means the fluctuating annual rate of interest which
shall at all times be equal to the higher of (a) the arithmetic average of the
annual rate of interest announced or established by each of the Reference
Lenders from time to time as being the "prime" lending rate then in effect at
its respective principal lending offices in the United States for determining
rates of interest on USDollar commercial loans to United States residents in the
United States, subject, however, to the provisions of Section 5.6.1 and (b) the
Federal Funds Effective Rate (which the parties acknowledge is an annualized
rate based on a year of 360 days) plus 1/2 of 1% per annum.
"US Base Rate Advance" - means an Advance in USDollars to which the US
Base Rate is applicable.
"US Base Rate Loan" - means at any given time during the term of this
Agreement the Loan, or that portion of the Loan, which the Borrower has elected
or is deemed to have elected to denominate in USDollars and upon which interest
is payable at the US Base Rate.
"USDollars" and the symbol: "US$" - each means the lawful money for the
time being of the United States of America in same day immediately available
funds or, if such funds are not available, the form of money of the United
States of America which is customarily used in the settlement of international
banking transactions on that day.
"US GAAP" - means, subject to the limitations on the application
thereof set forth in Section 1.7, generally accepted accounting principles as in
effect from time to time in the United States, applied on a basis consistent
(except for changes concurred in by the Company's independent public
accountants) with the most recent audited consolidated financial statements of
the Borrower and its Consolidated Subsidiaries delivered to the Lenders.
"Voting Shares" - means the capital stock of any class or classes of a
corporation which carry voting rights under any circumstances provided that, for
the purposes hereof, shares which only carry the right to vote conditionally on
the happening of an event shall be considered Voting Shares only upon the
happening of such event and then only while they retain the right to vote.
"Voting Trust" - means the voting trust established pursuant to the
Voting Trust Agreement.
"Voting Trust Agreement" - means that certain Voting Trust Agreement by
and among the Company, Merger Sub, and the trustee thereunder, substantially in
the form attached as Exhibit A to the Merger Agreement as such Voting Trust
Agreement may be amended, supplemented or otherwise modified from time to time
to the extent permitted under Section 11.4.8.
"Wholly-owned Subsidiary" - means a corporation that is wholly owned by
the Company directly or indirectly through any number of its Subsidiaries each
of which is wholly owned directly or indirectly by the Company.
"Written" or "in writing" shall include printing, typewriting, or any
electronic means of communication capable of being visibly reproduced at the
point of reception including telegraph, telecopier and electronic data
interchange.
1.2 Control
For the purposes of this Agreement, a Person controls a company or
corporation if that Person and/or one or more of its Subsidiaries beneficially
owns, directly or indirectly, an aggregate amount of the Voting Shares of such
company or corporation sufficient to enable it to elect a majority of the
directors (or other persons performing similar functions) of that company or
corporation regardless of the manner in which other Voting Shares are voted or
has, through the operation of any agreement or otherwise, the ability to elect
or cause the election of a majority of the directors (or other persons
performing similar functions), and the expressions "controlled by" and "under
common control" shall have correlative meanings. Notwithstanding the foregoing,
the parties hereto acknowledge and agree that the Company, Merger Sub and their
respective Subsidiaries or Affiliates do not control, solely for purposes of
this Agreement, the Target or any of its Subsidiaries solely by holding any
shares of capital stock of Target through the Voting Trust.
1.3 Computation of Time Periods
In this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding".
1.4 Headings and Table of Contents
The headings of Articles and Sections and the table of contents are
inserted for convenience of reference only and shall not affect the construction
or interpretation of this Agreement.
1.5 References
Unless the context otherwise requires, all references to Sections,
Articles and Schedules are to Sections, Articles and Schedules in this
Agreement.
1.6 Singular and Plural; Gender
In this Agreement, where the context admits, the singular includes the
plural and vice versa; and gender is used as a reference term only and applies
with the same effect whether the parties are of masculine or feminine gender,
corporate or other form.
1.7 Generally Accepted Accounting Principles
Each accounting term used in this Agreement shall be construed in
accordance with US GAAP. Financial statements and other information required to
be delivered by the Borrower pursuant to clauses (ii) and (iii) of Section
11.1.2 shall be prepared in accordance with US GAAP as in effect at the time of
such preparation subject to, with respect to the certificates to be delivered
pursuant to clauses (ii)(E) and (iii)(F) thereof, the last paragraph of Section
11.2. Calculations in connection with the definitions, covenants and other
provisions of this Agreement shall be based on and determined in accordance with
US GAAP as in effect at the time of such calculations subject to, with respect
to the calculations to be made pursuant to Section 11.2 and related definitions,
the last paragraph of Section 11.2.
1.8 Ratable - Portion of Accommodations
References in this Agreement to "Participation of a Lender", "shared by
each Lender pro rata, in accordance with their respective Participations," or
similar expressions shall mean and refer to a ratable portion or share as nearly
as may be ratable in the circumstances, as determined in good faith by the
Administrative Agent. Each such determination by the Administrative Agent shall
be prima facie evidence of such ratable share.
1.9 Incorporation of Schedules
The schedules annexed hereto shall, for all purposes hereof, form an
integral part of this Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties
The Borrower and each of the Guarantors, for itself, represents and
warrants to each Lender and the Administrative Agent, acknowledging and
confirming that each Lender and the Administrative Agent is relying thereon in
entering into this Agreement and providing accommodations hereunder, that:
2.1.1 the Borrower is a corporation duly incorporated and organized and
validly existing and in good standing under the laws of the state of Delaware;
each of the Guarantors is a corporation duly incorporated and organized and
validly existing and in good standing under the laws of its jurisdiction of
incorporation; each Loan Party is duly authorized to do business wherever the
nature of its material property or activities requires authorization, and it has
the corporate power and authority and all material governmental licenses,
authorizations, consents, registrations and approvals required (i) to own and
lease its material properties and assets, to conduct the business in which it is
presently engaged except for such licenses, authorizations, consents,
registrations or approvals as to which failure to obtain could not have a
Material Adverse Effect, and (ii) to enter into and perform its obligations
under this Agreement and the Related Agreements to which it is a party;
2.1.2 the execution, delivery and the performance by the Borrower and
each of the Guarantors of this Agreement and the Related Agreements to which it
is a party, (i) have been duly authorized by all necessary corporate action,
(ii) do not contravene any provision of its charter, its articles, its
certificate of incorporation, its by-laws, any unanimous agreement of all the
shareholders of the Borrower or any of the Guarantors or any law, decree, order,
rule or regulation of the Province of Quebec, Canada, or any applicable United
States federal law, or any applicable law of any state, or any other
jurisdiction in which its material assets are located, (iii) will not
constitute, or result in a breach of, or a default under, or be in conflict
with, any material deed, indenture, mortgage, franchise, license, judgment,
agreement or instrument to which it or any of its Material Subsidiaries is a
party or by which it or any of its Material Subsidiaries is bound; and (iv) will
not result in any Lien on any of its property or assets;
2.1.3 no authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority or regulatory body is required for
the due execution, delivery and performance by the Borrower and each of the
Guarantors of this Agreement and the Related Agreements to which it is a party
except for (i) the filing of certain information and documentary material with
the Federal Trade Commission and the Antitrust Division of the U.S. Department
of Justice with respect to the exemption of the purchase of Target Common Stock
pursuant to the Tender Offer and the Merger under 15 U.S.C. ss. 18a(c)(6) from
any additional Hart-Scott-Rodino requirements, which filing has been made and
acknowledged, (ii) the informal nonbinding opinion of the STB staff to the
effect that the Voting Trust and the deposit of such shares into the Voting
Trust will effectively insulate the Company from the violation of Subtitle IV of
Title 49 of the United States Code and the policy of the STB that would result
if the Company were to acquire without authorization a sufficient interest in
the carrier Subsidiaries of Target as otherwise to result in control, (iii) a
final order of the STB authorizing the acquisition of control of Target by the
Company and (iv) such other authorizations or approvals or other action or
notice or filings as have been validly obtained, given or filed and are in full
force and effect, or as to which failure to obtain or give is not, individually
or in the aggregate, material;
2.1.4 this Agreement and each of the Related Agreements has been duly
executed and delivered by the Borrower and each of the Guarantors that is a
party thereto, and is the legal, valid and binding obligation of each such Loan
Party, enforceable against each such Loan Party in accordance with its terms,
except to the extent such enforcement may be restricted by any applicable
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally and subject to the discretion of a court
in regard to the remedy of specific performance;
2.1.5 there is no litigation, action or other legal proceeding pending
or known to be threatened against the Company or any of its Subsidiaries which
could have a Material Adverse Effect other than as described in Schedule 2.1.5;
2.1.6 the Borrower and each of the Guarantors are not in default under
this Agreement nor have they done or omitted to do anything which, with the
giving of notice or the passage of time, or both, would constitute an Event of
Default which has not been waived or cured; the Company, its Subsidiaries and
each of the Guarantors is not in default in any material respect under any other
agreement for monies borrowed, raised or guaranteed to which the Company or any
of its Subsidiaries is a party or by which it is bound, the amount of which
individually or in the aggregate exceeds C$50,000,000, and no holder of such
outstanding Indebtedness has given notice of any default thereunder which has
not been waived or cured;
2.1.7 (i) the unaudited consolidated balance sheet of the Company and
its Consolidated Subsidiaries as of the fiscal year ended December 31, 1997 and
the related consolidated statements of income and shareholders' equity and of
changes in financial position of the Company and its Consolidated Subsidiaries
for the fiscal year then ended, copies of which have been furnished to the
Administrative Agent, fairly present the consolidated financial condition of the
Company and its Consolidated Subsidiaries as at such date and the results of the
operations of the Company and its Consolidated Subsidiaries for the period ended
on such date (subject to changes resulting from audit), all in accordance with
Canadian generally accepted accounting principles consistently applied, and (ii)
the unaudited pro forma combined balance sheet of Company and Target and their
respective Subsidiaries as of the fiscal year ended December 31, 1997 (the "Pro
Forma Closing Balance Sheet"), and the related pro forma combined statement of
income for the fiscal year then ended set forth in the Confidential Information
Memorandum have been prepared on the basis described therein and, to the actual
knowledge of the Borrower, show the combined financial position of the Company
and the Target and their respective Subsidiaries as of December 31, 1997 and the
combined results of operations of the Borrower and the Target and their
respective Subsidiaries for the fiscal year ended December 31, 1997, in each
case as if the Merger Date and the STB Approval Date had occurred on January 1,
1997;
2.1.8 there are no outstanding judgments, writs of execution, work
orders, notices of deficiency capable of resulting in work orders, injunctions
or directives against the Company or any of its Subsidiaries or any of their
material property or assets which could have a Material Adverse Effect;
2.1.9 the obligations of the Borrower under this Agreement rank at
least pari passu in right of payment with all other unsecured Indebtedness of
the Borrower; the obligations of each of the Guarantors under this Agreement
rank at least pari passu in right of payment with all other unsecured
Indebtedness of each of the Guarantors;
2.1.10 the Company and each of its Subsidiaries is the owner of, and
has good and marketable title to, all its assets and the same are free and clear
of all Liens except for Permitted Encumbrances, the title defects disclosed in
Schedule 2.1.10 and other title defects which could not have a Material Adverse
Effect. The Company and each Material Subsidiary has the right to and does enjoy
peaceful and undisturbed possession under all leases under which it is leasing
property, other than leases of property which, if abandoned, could not have a
Material Adverse Effect. All such leases are valid, subsisting and in full force
and effect, other than leases of property which, if abandoned, could not have a
Material Adverse Effect and neither the Company nor any of its Material
Subsidiaries is in default in the performance, observance or fulfillment of any
of the obligations under any provision of any such leases except for defaults
which could not have a Material Adverse Effect;
2.1.11 to the extent that the Borrower and any of the Guarantors have
insurable assets, a policy of insurance or policies of insurance in compliance
with the requirements of Section 11.1.5 of this Agreement are in effect;
2.1.12 the Company and each of its Material Subsidiaries possesses all
the trademarks, trade names, copyrights, patents, licenses or rights in any
thereof, reasonably necessary for the conduct of the business of the Company and
its Material Subsidiaries as now conducted and presently proposed to be
conducted which failure to possess could have a Material Adverse Effect. To the
best of the knowledge of the Company, neither it nor any of its Subsidiaries is
infringing or, as of the date hereof, is alleged to be infringing on the rights
of any Person with respect to any patent, trademark, trade name, copyright (or
any application or registration respecting any thereof), discovery, improvement,
process, formula, know-how, data, plans, specification, drawing or the like,
which infringement could have a Material Adverse Effect;
2.1.13 neither the Company nor any of its Subsidiaries is in violation
of any applicable Law, which violation could have a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries is in violation of any
applicable Environmental Law, and the Company and its Subsidiaries have received
all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their business and are in compliance with the
terms and conditions of such permits, licenses or approvals, except as disclosed
(i) on Schedule 2.1.13 annexed hereto or (ii) in the unaudited consolidated
financial statements of the Company and its Consolidated Subsidiaries for the
fiscal year ended December 31, 1997 and the notes thereto, delivered pursuant to
Section 10.1.7(i), and except for such violation of law or regulation, failure
to receive required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or approvals which could
not, singularly or in the aggregate, have a Material Adverse Effect;
2.1.14 Schedule 2.1.14 contains a list of all pension plans (other than
the Plans) of the Company and its Material Subsidiaries. All contributions to
such pension plans required under applicable Laws have been made, except as
disclosed in Schedule 2.1.14 and in the audited consolidated financial
statements of the Company and its Consolidated Subsidiaries most recently
delivered to the Lenders. Each registered pension plan listed in Schedule 2.1.14
is funded to the extent that it is required to be funded in accordance with its
material terms and applicable Law and the non-registered pension plan listed in
Schedule 2.1.14 is unfunded but the liabilities thereunder are guaranteed by a
standby letter of credit. Except as disclosed in Schedule 2.1.14, the Company
and its Material Subsidiaries do not have any Excess Canadian Pension
Obligations;
2.1.15 the Company and each of its Subsidiaries has filed all material
tax returns which are required to be filed and has paid all material Taxes,
interest and penalties, if any, which have become due pursuant to such returns
or pursuant to any assessment received by it and adequate provision for payment
has been made for Taxes not yet due except any such payment of which the
concerned party is contesting in good faith by appropriate proceedings and for
which appropriate reserves have been provided on the books of the Company or the
affected Subsidiary as the case may be, and as to which, in each case, neither
any Lien (other than a Permitted Encumbrance of the type described in clauses
(i) through (x) of the definition of Permitted Encumbrances in Section 1.1) has
attached nor any foreclosure, distraint, seizure, attachment, sale or other
similar proceedings have been commenced. The charges, accruals and reserves on
the books of the Company and its Subsidiaries in respect of Taxes are adequate,
in the judgment of the Company;
2.1.16 [intentionally omitted];
2.1.17 there has been no Material Adverse Effect since September 30,
1997;
2.1.18 (a) neither the Borrower nor any of the Guarantors is a "public
utility company" or a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended;
(b) neither the Borrower nor any of the Guarantors is an "investment
company" or an "affiliated person" of an "investment company" or a company
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended. Neither the Borrower nor any of the
Guarantors is an "investment adviser" or an affiliated person" of an "investment
adviser" as such terms are defined in the Investment Advisers Act of 1940, as
amended;
2.1.19 except as set forth on Schedule 2.1.19 annexed hereto, there is
no fact known to the Company or its Subsidiaries which could have a Material
Adverse Effect which has not been fully disclosed to the Administrative Agent or
the Lenders other than matters of a general economic nature;
2.1.20 the Company and each of its Material Subsidiaries possesses all
material franchises, certificates, licenses, permits and other authorizations or
exemptions from regulatory authorities and other Governmental Authorities, free
from burdensome restrictions or known conflict with the rights of others, that
are necessary for the ownership, maintenance and operation of its properties and
assets and the conduct of its business as now conducted and as proposed to be
conducted, and neither the Company nor any of the Material Subsidiaries is in
violation of any thereof, which failure to possess or violation could have a
Material Adverse Effect;
2.1.21 each Canadian Plan is in compliance in all material respects
with all applicable Laws; neither the Company nor any of its Material
Subsidiaries has incurred any material liability to any Canadian Plan, whether
on account of any failure to meet the contribution or minimum funding
requirements applicable thereto, or relating to the administration or
termination of any Canadian Plan and no event has occurred and no condition
exists which presents a material risk that the Company or any of its Material
Subsidiaries will incur liabilities on account of the foregoing circumstances
which are material in the aggregate. Except as disclosed in Schedule 2.1.21, no
Canadian Plan is a Deficient Canadian Plan;
2.1.22 each of the Borrower and each ERISA Affiliate of the Borrower
(a) has fulfilled its obligations under the minimum funding standards of ERISA
and the Code with respect to each Plan and (b) is in compliance in all respects
with the presently applicable provisions of ERISA and the Code with respect to
each Plan except for failures to comply which could not, singularly or in the
aggregate, have a Material Adverse Effect. Neither the Borrower nor any ERISA
Affiliate of the Borrower has (x) sought a waiver of the minimum funding
standard under Section 412 of the Code in respect of any Plan, (y) failed to
make any contribution or payment to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could result in the imposition of a Lien
other than a Permitted Encumbrance of the type described in paragraphs (i)
through (x) in the definition of Permitted Encumbrances in Section 1.1 or the
posting of a bond or other security under ERISA or the Code, or (z) incurred any
liability under Title IV of ERISA, other than a liability to the PBGC for
premiums under Section 4007 of ERISA, which could in any case have a Material
Adverse Effect. No Prohibited Transaction and no Reportable Event has occurred
with respect to any such Plan within the past five (5) years which could have a
Material Adverse Effect. The execution, delivery and performance of this
Agreement does not constitute a Prohibited Transaction. Except as disclosed in
Schedule 2.1.22, there is no material unfunded benefit liability with respect to
any Plan of the Borrower or its ERISA Affiliates which could have a Material
Adverse Effect. Except to the extent required under Section 4980B of the Code
and for a US$5,000 payment made upon the death of a retired employee, no Plan
provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of the Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates.
2.1.23 the Borrower will use the proceeds of the Advances only for the
purposes permitted under Sections 3.1 and 3.2. No part of the proceeds of any
Advance will be used by the Borrower in violation of Regulation G, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal Reserve
System;
2.1.24 the aggregate Tangible Net Worth of the Excluded Subsidiaries
does not exceed C$50,000,000;
2.1.25 the Company has delivered to Lenders complete and correct copies
of each Related Agreement and of all exhibits and schedules thereto;
2.1.26 subject to the qualifications set forth therein, each of the
representations and warranties given by the Company and Merger Sub in the Merger
Agreement is true and correct in all material respects as of the date hereof (or
as of any earlier date to which such representation and warranty specifically
relates) and will be true and correct in all material respects as of the Initial
Funding Date (or such earlier date as the case may be), and to the Borrower's
actual knowledge, each representation and warranty made by Target in the Merger
Agreement is true and correct as of the date hereof (or as of any earlier date
to which such representation or warranty specifically relates) and will be true
and correct as of the Initial Funding Date;
2.1.27 notwithstanding anything in the Merger Agreement to the
contrary, the representations and warranties of the Borrower set forth in
subsection 2.1.26 shall, solely for purposes of this Agreement, survive the
Initial Funding Date for the benefit of Lenders; and
2.1.28 the Tender Offer Materials and other information furnished by
any Loan Party to any Agent or any Lender for purposes of or in connection with
this Agreement or any transaction contemplated hereby (including any such
information contained in the Confidential Information Memorandum with respect to
the credit facilities created hereunder, the Form F-4 that was submitted to the
Securities and Exchange Commission on a confidential basis on March 6, 1998 and
any information contained in any filings made by the Company after the date
which is one year prior to the Closing Date with the Securities and Exchange
Commission which are publicly available), taken as a whole, as of the date of
preparation thereof, do not contain any untrue statement of a material fact or
omits to state a material fact (known to any Loan Party, in the case of any
document not furnished by it) necessary in order to make the statements
contained therein not misleading in light of the circumstances in which the same
were made. Any projections and pro forma financial information contained in the
Financial Projections and the Pro Forma Closing Balance Sheet are based upon
good faith estimates and assumptions believed by the Company to be reasonable at
the time made, it being recognized by Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected
results. As of the date hereof, there are no facts known (or which should upon
the reasonable exercise of diligence be known) to any Loan Party (other than
matters of a general economic nature) that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect and that
have not been disclosed herein or in other documents, certificates and
statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
2.2 Survival of Representations and Warranties
The representations and warranties herein set forth or contained in any
certificates or documents delivered to the Administrative Agent or the Lenders
pursuant hereto shall not be prejudiced by and shall survive any accommodation
hereunder and shall continue in full force and effect until the full payment and
performance of all obligations of the Borrower and the Guarantors hereunder or
pursuant hereto. The representations and warranties in Section 2.1, except for
Section 2.1.3 and Sections 2.1.14, 2.1.21, 2.1.22, 2.1.26 and 2.1.27 and except
that clause (i) of Section 2.1.7 shall be read as if it referred to the most
recent financial statements of the Company delivered by the Company to the
Administrative Agent pursuant to Section 11.1.2 and the date in Section 2.1.17
shall be the last day of the most recent fiscal year for which the Company has
furnished its audited annual consolidated statements to the Administrative Agent
pursuant to Section 11.1.2, shall be deemed to be repeated upon each Drawdown
Date (other than a Drawdown Date on which there is no increase in the amount of
credit extended under this Agreement), on the date of each Bid Borrowing and on
the date each Money Market Loan is made.
ARTICLE 3
THE CREDIT
3.1 Term Loan Commitment; Use of Proceeds of Term Loans
3.1.1 Relying on each of the representations and warranties set out in
Article 2 and subject to the terms of this Agreement, each Lender severally and
not jointly, agrees to make its Term Loan Commitment available to the Borrower
as term loans on the Initial Funding Date in USDollars by way of US Base Rate
Advances or Libor Advances; provided that (a) a Lender shall have no obligation
to make any Term Loan if the amount thereof exceeds its then Available Term Loan
Commitment and (b) in no event shall the principal amount of the Term Loans made
to the Borrower exceed US$320,000,000.
3.1.2 The Borrower agrees to use the proceeds of the Term Loans,
together with other funds, solely as follows:
(i) to contribute the proceeds thereof, directly or indirectly, to the
capital of Merger Sub to provide the consideration for Merger Sub to
purchase the Tendered Target Shares, to pay or cause to be paid the
consideration for any shares of Target Common Stock that have been
converted into the right to receive a cash payment pursuant to the
Merger Agreement and to pay or cause to be paid the purchase price of
any other Target Common Stock purchased in any manner whatsoever, in an
aggregate amount not to exceed US$1,796,018,679.00;
(ii) to repay in full all Indebtedness outstanding under the Existing
Credit Agreements in an amount not to exceed US$30,000,000, together
with accrued and unpaid interest thereon and fees and expenses payable
in connection therewith; and
(iii) to pay or cause to be paid Transaction Costs.
3.2 Revolving Loan Commitment; Use of Proceeds of Revolving Loans
3.2.1 Relying on each of the representations and warranties set out in
Article 2 and subject to the terms of this Agreement, each Lender severally and
not jointly, agrees to make its Revolving Loan Commitment available to the
Borrower on a revolving basis, during the period from the Initial Funding Date
until the Revolving Loan Commitment Termination Date applicable to such Lender,
in USDollars by way of US Base Rate Advances or Libor Advances or Letters of
Credit in accordance with Article 7; provided that a Lender shall have no
obligation to make any Advance under this Section 3.2.1 if the amount thereof
exceeds its then Available Revolving Loan Commitment and (b) in no event shall
the Total Utilization of Revolving Loan Commitments exceed the aggregate
Revolving Loan Commitments of all Lenders and provided further, that the
Revolving Loan Commitment of a Lender shall be deemed used from time to time to
the extent of the aggregate amount of the Money Market Loans then outstanding
owed to such Lender, and such deemed use of such Lender's Revolving Loan
Commitment shall be applied to reduce the amount of Advances available from such
Lender (such deemed use of such Lender's Revolving Loan Commitment being a
"Money Market Reduction"). No Advance shall be required to be made by a Lender
if, after giving effect to each applicable Money Market Reduction in effect
immediately prior to such Advance (and to the application of the proceeds of
such Advance), the aggregate Advances of any Lender would exceed the amount
permitted by the prior sentence.
3.2.2 The Borrower agrees to use the proceeds of the Revolving Loans,
together with other funds, solely as follows:
(i) to contribute the proceeds thereof, directly or indirectly, to the
capital of Merger Sub to provide the consideration for Merger Sub to
purchase the Tendered Target Shares, to pay or cause to be paid the
consideration for any shares of Target Common Stock that have been
converted into the right to receive a cash payment pursuant to the
Merger Agreement and to pay or cause to be paid the purchase price of
any other Target Common Stock purchased in any manner whatsoever, in an
aggregate amount not to exceed US$1,796,018,679.00;
(ii) to repay in full all Indebtedness outstanding under the Existing
Credit Agreements in an amount not to exceed US$30,000,000, together
with accrued and unpaid interest thereon and fees and expenses payable
in connection therewith;
(iii) to pay or cause to be paid Transaction Costs; and
(iv) for general corporate purposes including, without limitation,
commercial paper backstop.
3.3 Direct Advances
3.3.1 Term Loans. Subject to the terms and conditions hereof, upon
giving to the Administrative Agent prior written notice in accordance with
Section 3.6 by means of a Notice of Borrowing, the Borrower may borrow on the
Initial Funding Date from each Lender up to the amount of its Available Term
Loan Commitment in USDollars by way of Libor Advances, or US Base Rate Advances
in a minimum amount of ten million USDollars (US$10,000,000) or such larger
amount as is an integral multiple of one million USDollars (US$1,000,000) (or
the remaining balance of the Available Term Loan Commitment, if less than such
amount), provided that in no event shall the principal amount of the Term Loans
made to the Borrower exceed US$320,000,000. In each Notice of Borrowing in which
the Borrower has elected to pay interest at a margin or margins relative to
LIBOR on all or part of the Borrowing, the Borrower shall specify the duration
it selects for the initial Interest Period with respect to such Libor Loan
Portion in accordance with Section 5.4. Each Notice of Borrowing shall be
irrevocable and binding on the Borrower. The Drawdown Date for the Term Loans
shall be the Initial Funding Date, which shall be a Business Day. The Borrower
may make only one Borrowing under the Term Loan Commitments. Amounts borrowed
under this Section 3.3.1 and subsequently repaid or prepaid may not be
reborrowed.
3.3.2 Revolving Loans. Subject to the terms and conditions hereof, from
time to time during the period from the Initial Funding Date until the Revolving
Loan Commitment Termination Date, upon giving to the Administrative Agent prior
written notice in accordance with Section 3.6 by means of a Notice of Borrowing,
the Borrower may from time to time borrow from each Lender up to the amount of
its Available Revolving Loan Commitment by way of Libor Advances or US Base Rate
Advances in a minimum amount of ten million USDollars (US$10,000,000) or such
larger amount as is an integral multiple of one million USDollars (US$1,000,000)
(or the remaining balance of the Available Revolving Loan Commitment, if less
than such amount), provided that in no event shall the Total Utilization of
Revolving Loan Commitments (after giving effect to any Money Market Reduction)
exceed the aggregate Revolving Loan Commitments of all Lenders. In each Notice
of Borrowing in which the Borrower has elected to pay interest at a margin or
margins relative to LIBOR on all or part of the Borrowing, the Borrower shall
specify the duration it selects for the initial Interest Period with respect to
such Libor Loan Portion in accordance with Section 5.4. Each Notice of Borrowing
shall be irrevocable and binding on the Borrower. In all cases the Drawdown Date
shall be a Business Day. Within the limits of each Lender's Revolving Loan
Commitment, the Borrower may borrow under this Section 3.3.2, repay pursuant to
Section 4.2 and reborrow under this Section 3.3.2.
3.4 Bid Advances
3.4.1 Each Lender severally agrees that the Borrower may make Bid
Borrowings under this Section 3.4 from time to time on any Business Day during
the period from the Initial Funding Date until the date occurring one (1) month
(or, in the case of Fixed Rate Advances, thirty (30) days) prior to the
Revolving Loan Commitment Termination Date in the manner set forth below;
provided that (i) no Bid Borrowing may be requested or made until such time as
US$1,700,000,000 in original aggregate principal amount of Advances, Canadian
Term Loans and Canadian Revolving Loans have been made under this Agreement and
the Canadian Credit Agreement and (ii) following the making of each Bid
Borrowing, the Total Utilization of Revolving Loan Commitments (after giving
effect to any Money Market Reduction) shall not exceed the aggregate Revolving
Loan Commitments of all Lenders.
(i) The Borrower may request a Bid Borrowing under this
Section 3.4 by delivering to the Administrative Agent, by telecopier,
confirmed immediately in writing, not later than 10:00 a.m. (Chicago
time) (A) at least three (3) Business Days prior to the date of the
proposed Bid Borrowing, if the Borrower selects a Fixed Rate Advance,
or (B) at least four (4) Business Days prior to the date of the
proposed Bid Borrowing, if the Borrower selects a Libor Advance, a
notice of a Bid Borrowing (a "Notice of Bid Borrowings"), in
substantially the form of Schedule 3.4.1, specifying therein if the
Borrower selects a Fixed Rate Advance or a Libor Advance, the date and
aggregate amount of the proposed Bid Borrowing, the maturity date for
repayment of each Bid Advance to be made as part of such Bid Borrowing
(which maturity date may not be earlier than the date occurring one (1)
month (or, in the case of Fixed Rate Advances, thirty (30) days) after
the date of such Bid Borrowing or, in any case, may not be later
than one hundred and eighty (180) days after the date of such Bid
Borrowing, or, if earlier, the Revolving Loan Commitment Termination
Date), the interest payment date or dates relating thereto, the right,
if any, to prepay any principal amount of any Bid Advance to be made a
part of such Bid Borrowing on such terms as the Borrower shall therein
specify, and any other terms to be applicable to such Bid Borrowing.
The Administrative Agent shall in turn promptly notify each Lender of
each request for a Bid Borrowing received by it from the Borrower by
sending such Lender a copy of the related Notice of Bid Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects to
do so, irrevocably offer to make one or more Bid Advances to the
Borrower as part of such proposed Bid Borrowing at a fixed rate or
rates, or a margin or margins relative to LIBOR, as requested by the
Borrower, by notifying the Administrative Agent via telecopier (which
shall give prompt notice thereof to the Borrower), (A) after 9:00 a.m.
but before 9:30 a.m. (Chicago time) on the date of such proposed Bid
Borrowing, in the case of a Notice of Bid Borrowing for a Fixed Rate
Advance and (B) after 1:30 p.m. but before 2:00 p.m. (Chicago time)
three (3) Business Days before the date of such proposed Bid Borrowing,
in the case of a Notice of Bid Borrowing for a Libor Advance, of the
minimum amount (which amount shall be not less than US$1,000,000) and
maximum amount of each Bid Advance which such Lender would be willing
to make as part of such proposed Bid Borrowing (which amounts may,
subject to the proviso to the first sentence of Section 3.4.1, exceed
such Lender's Revolving Loan Commitment), the fixed rate or rates, or a
margin or margins relative to LIBOR, as requested by the Borrower,
which such Lender would be willing to accept for such Bid Advance and
such Lender's Applicable Lending Office with respect to such Bid
Advance; provided that if the Administrative Agent in its capacity as a
Lender shall, in its sole discretion, elect to make any such offer, it
shall notify the Borrower of such offer by 9:00 a.m. (Chicago time) on
the date of such proposed Bid Borrowing, in the case of a Notice of Bid
Borrowing for a Fixed Rate Advance and by 1:30 p.m. (Chicago time)
three (3) Business Days before the date of such proposed Bid Borrowing,
in the case of a Notice of Bid Borrowing for a Libor Advance. In the
event that the Administrative Agent does not receive a notice from a
Lender making an offer for a Bid Advance by the applicable time set out
above in this paragraph (ii), such Lender shall be deemed for all
purposes to have elected not to make such an offer. The failure by any
Lender to give such notice shall not cause such Lender to be obligated
to make any Bid Advance as part of such proposed Bid Borrowing.
(iii) The Borrower shall, in turn, (A) before 10:30 a.m.
(Chicago time) on the date of such proposed Bid Borrowing, in the case
of a Notice of Bid Borrowing for a Fixed Rate Advance and (B) before
3:00 p.m. (Chicago time) three (3) Business Days before the date of
such proposed Bid Borrowing, in the case of a Notice of Bid Borrowing
for a Libor Advance, either:
(1) cancel such Bid Borrowing by giving the Administrative
Agent notice to that effect, or
(2) accept one or more of the offers made by any Lender or
Lenders pursuant to paragraph (ii) above, in its sole
discretion, by giving notice to the Administrative Agent of
the amount of each Bid Advance (which amount shall be equal to
or greater than the minimum amount, and equal to or less than
the maximum amount, notified to the Borrower by the
Administrative Agent on behalf of such Lender for such Bid
Advance pursuant to paragraph (ii) above) to be made by each
Lender as part of such Bid Borrowing, and reject any remaining
offers made by Lenders pursuant to paragraph (ii) above by
giving the Administrative Agent notice to that effect.
The acceptance of offers by the Borrower pursuant to clause (2) of this
paragraph (iii) shall be on the basis of ascending rates of interest or
margins contained in the offers made by the Lenders pursuant to
paragraph (ii) above; provided that, in the event that two or more of
such offers contain the same rate of interest or margin for a greater
aggregate principal amount than the amount specified in such Notice of
Bid Borrowing less the aggregate principal amount of all such offers
containing lower rates of interest that have been accepted by the
Borrower pursuant to clause (2) of this paragraph (iii), The Borrower
shall accept such offers at such rate of interest or margin in amounts
allocated among the Lenders which made such offers pro rata according
to the amounts so offered (or as nearly pro rata as shall be
practicable after giving effect to the requirement that Bid Advances
made in connection with a Bid Borrowing shall be a minimum amount of
US$1,000,000).
(iv) If the Borrower notifies the Administrative Agent that
such Bid Borrowing is cancelled pursuant to clause (1) of paragraph
(iii) above, the Administrative Agent shall give prompt notice thereof
to the Lenders and such Bid Borrowing shall not be made.
(v) If the Borrower accepts one or more of the offers made by
any Lender or Lenders pursuant to clause (2) of paragraph (iii) above,
the Administrative Agent shall in turn on the date of such acceptance
notify (A) each Lender that has made an offer as described in paragraph
(ii) above of the date and aggregate amount of such Bid Borrowing and
whether or not any offer or offers made by such Lender pursuant to
paragraph (ii) above have been accepted by the Borrower, (B) each
Lender that is to make a Bid Advance as part of such Bid Borrowing of
the amount of each Bid Advance to be made by such Lender as part of
such Bid Borrowing, and (C) each Lender that is to make a Bid Advance
as part of such Bid Borrowing, upon receipt, that the Administrative
Agent has received forms of documents appearing to fulfill the
applicable conditions set forth in Article 10.
(vi) Each Lender that is to make a Bid Advance as part of such
Bid Borrowing shall, before 12:00 noon (Chicago time) on the date of
such Bid Borrowing specified in the notice received from the
Administrative Agent pursuant to clause (B) of the preceding paragraph
(v) or any later time when such Lender shall have received notice from
the Administrative Agent pursuant to clause (C) of the preceding
paragraph (v), make available for the account of its Applicable Lending
Office such Lender's ratable portion of such Bid Borrowing by
depositing such portion in same day funds in the Administrative Agent's
account specified in Section 9.1. Upon fulfillment of the applicable
conditions set forth in Article 10, the Administrative Agent will
promptly make available to the Borrower at the Administrative Agent's
aforesaid address such funds as shall have
actually been received by the Administrative Agent. Promptly after each
Bid Borrowing, the Administrative Agent will notify each Lender of the
amount of the Bid Borrowing.
3.4.2 Each Bid Borrowing shall be in an aggregate amount of not less
than or US$10,000,000 or an integral multiple of US$1,000,000 respectively in
excess thereof. Following the making of each Bid Borrowing (and the application
of the proceeds thereof), the Borrower agrees that it shall be in compliance
with the limitations set forth in the proviso to the first sentence of Section
3.4.1. Except as otherwise provided in this Section 3.4, the provisions of this
Agreement dealing with Libor Loans shall apply, mutatis mutandis, to Bid
Borrowings at margins relative to LIBOR.
3.4.3 Within the limits and on the conditions set forth in this Section
3.4, the Borrower may from time to time borrow under this Section 3.4, repay or
prepay pursuant to Section 3.4.4, and re-borrow under this Section 3.4; provided
that a Bid Borrowing shall not be made within four Business Days of the date
that any other Bid Borrowing is made.
3.4.4 The Borrower shall repay to the Administrative Agent for the
account of each Lender which has made a Bid Advance, on the maturity date of
each Bid Advance (such maturity date being that specified by the Borrower for
repayment of such Bid Advance in the related Notice of Bid Borrowing delivered
pursuant to Section 3.4.1(i)), the then unpaid principal amount of such Bid
Advance. The Borrower shall have no right to prepay any principal amount of any
Bid Advance except on the terms specified for prepayment by the Borrower for
such Bid Advance in the related Notice of Bid Borrowing delivered pursuant to
Section 3.4.1(i) or otherwise with the consent of the Lender that has made the
relevant Bid Advance.
3.4.5 The Borrower shall pay interest on the unpaid principal amount of
each Bid Advance from the date of such Bid Advance to the date the principal
amount of such Bid Advance is repaid in full, at the rate of interest for such
Bid Advance specified by the Lender making such Bid Advance in its notice with
respect thereto delivered pursuant to Section 3.4.1(ii), payable on the interest
payment date or dates specified by the Borrower for such Bid Advance in the
related Notice of Bid Borrowing delivered pursuant to Section 3.4.1(i).
3.5 Money Market Loans
3.5.1 The Borrower may at any time and from time to time request any
one or more of the Lenders to make offers to make Money Market Loans to the
Borrower on any Business Day during the period from the date hereof until the
Revolving Loan Commitment Termination Date in the manner set forth below. Each
such Lender may, but shall have no obligation to, make such offer, and the
Borrower may, but shall have no obligation to, accept any such offers in the
manner set forth in this Section 3.5.
3.5.2 In the event that the Borrower desires to borrow a Money Market
Loan from a Lender, the Borrower shall, prior to 11:00 a.m. (Montreal time),
request that such Lender provide a quotation to the Borrower of the amount and
terms under which such Lender would be willing to provide such Money Market
Loan. Each Money Market Loan shall be in USDollars in an amount of not less than
US$1,000,000 or an integral multiple of US$1,000,000 in excess thereof.
3.5.3 In the event that the Borrower elects to accept a Lender's offer
for a Money Market Loan, the Borrower shall provide telephonic notice to such
Lender of its election in a timely manner after the time that such offer was
received by the Borrower. The failure of the Borrower to provide such notice of
acceptance in a timely manner shall be deemed to constitute a rejection of the
offer of such Lender. Any Money Market Loan to be made by a Lender pursuant to
this Section 3.5 shall be made by the Lender crediting an account specified by
the Borrower with the amount of such advance in same day funds in accordance
with the terms agreed upon for such Money Market Loan following receipt of the
Borrower's timely acceptance of the offer of such Lender with respect to such
Money Market Loan.
3.5.4 The Borrower agrees to forward to the Lender with respect to a
Money Market Loan written evidence of such Money Market Loan by providing, on
the date upon which such Money Market Loan is made, documents, in form and
substance acceptable to both the Borrower and such Lender, executed and
delivered by a duly authorized officer of the Borrower, confirming the amount so
borrowed, the rate of interest applicable thereto and the maturity thereof (with
such Money Market Loan being due and payable on such date of maturity); provided
that the failure of the Borrower to provide such documents shall not impair the
obligation of the Borrower to repay any Money Market Loan borrowed by it. All
borrowings pursuant to this Section 3.5 shall bear interest at the rate quoted
to the Borrower by the relevant Lender in its quotation described in Section
3.5.2.
3.5.5 In the event that all amounts then owing under this Agreement
become due and payable prior to their scheduled maturity, each Lender that has a
Money Market Loan outstanding may declare its Money Market Loans (with any
applicable interest thereon) to be immediately due and payable without the
consent of, or notice to, any other Lender; provided that if such event is an
Event of Default specified in Section 12.1.11, each Lender's Money Market Loans
(and any applicable interest thereon) shall automatically become immediately due
and payable.
3.5.6 The Borrower and any Lender may at any time and from time to time
enter into written agreements that provide for procedures for soliciting and
extending Money Market Loans that differ from those specified in Sections 3.5.2
to 3.5.5, inclusive. As between the Borrower and such Lender such agreements
shall supersede the provisions of such sections to the extent specified therein.
3.5.7 In the event that the availability under any Lender's Revolving
Loan Commitment (after giving effect to any applicable Money Market Reduction)
has been reduced to a level that is insufficient to permit such Lender to lend
its ratable share of any Borrowing requested to be made hereunder, the Borrower
shall repay such Lender's outstanding Money Market Loans simultaneously with or
prior to such Borrowing (which repayment may be financed with proceeds of such
Advances and shall be subject to the provisions of Section 3.5.8) by the amount
necessary to increase the availability under its Revolving Loan Commitment
(before giving effect to such Borrowing, but after giving effect to the
application of the proceeds thereof and to any Money Market Reduction in effect
after such application) to be at least equal to its ratable share of any such
Borrowing.
3.5.8 Notwithstanding anything to the contrary contained herein, the
following provision shall apply to all Money Market Loans unless expressly
otherwise excluded in the terms thereof. If any payment of principal of any
Money Market Loan is made other than on the maturity date of such Money Market
Loan, as a result of the acceleration of the maturity thereof pursuant to
Section 3.5.5 or for any other reason whatsoever, the Borrower shall, upon
demand by the applicable Lender (with a copy of such demand to the
Administrative Agent), pay directly to such Lender as it may direct any amounts
required to compensate such Lender for any losses, costs or expenses which it
may reasonably incur as a result of such payment, including, without limitation,
any loss, cost or expense incurred by reason of the liquidation or redeployment
of deposits or other funds acquired by such Lender to fund or maintain such
Money Market Loan.
3.5.9 Notwithstanding anything to the contrary contained herein, Money
Market Loans shall be deemed not to be extensions of credit, Advances or
Borrowings under this Agreement; provided that Money Market Loans shall be
considered to be extensions of credit under this Agreement for purposes of
calculating the Money Market Reduction.
3.5.10 Notwithstanding anything to the contrary contained herein, the
Administrative Agent shall have no responsibility whatsoever for Money Market
Loans, either before or after default hereunder or thereunder, including,
without limitation, for establishing the terms thereof, declaring defaults
thereunder, monitoring compliance by the Borrower therewith or verifying
payments or repayments thereunder, and to the extent that any Lender entering
into a Money Market Loan requires any additional documentation in connection
therewith, such documentation shall be entirely the responsibility of such
Lender, including without limitation the preparation, execution, delivery and
safe-keeping thereof.
3.5.11 Unless the Borrower shall have previously given the
Administrative Agent written notice of all then outstanding (or committed to be
advanced on or prior to the Business Day of the proposed Borrowing) Money Market
Loans (which notice shall be in writing and shall specify the applicable Lender
which had advanced a Money Market Loan, the principal amount thereof and the
borrowing date and scheduled repayment date thereof), each Notice of Borrowing
or Notice of Bid Borrowing, as the case may be, given hereunder shall also
specify such information.
3.6 Notice Provisions
3.6.1 For each Borrowing, each optional repayment and each conversion,
the Administrative Agent shall have received prior to 11:00 a.m (Montreal time)
from the Borrower in writing a Notice of Borrowing, a Notice of Optional
Repayment or a Notice of Conversion, as the case may be, in accordance with the
following:
(a) at least one (1) Business Day prior to the Drawdown Date or
Conversion Date, as the case may be, for each Borrowing or conversion by way of
US Base Rate Advance;
(b) at least three (3) Business Days prior to the Drawdown Date or
Conversion Date, as the case may be, for each Borrowing or conversion by way of
Libor Advance (provided, however, that with respect to Libor Advances to be made
on the Initial Funding Date, the Borrower shall be required to deliver the
relevant Notice of Borrowing no later than 9:00 a.m. (Montreal time) two (2)
Business Days prior to the Initial Funding Date); and
(c) at least three (3) Business Days prior to the Optional Repayment
Date for each optional repayment.
3.6.2 If the Borrower gives a Notice of Borrowing to the Administrative
Agent in accordance with Section 3.6.1, the Administrative Agent shall on the
same day it receives such Notice of Borrowing notify each Lender by telecopier
of the particulars of such request for a Borrowing and of such Lender's
Participation in the proposed Borrowing and each Lender shall, no later than
2:00 p.m. (Montreal time) on the Drawdown Date, make or procure to be made its
Participation in the Borrowing available to the Administrative Agent.
3.7 Pro Rata Treatment
Except in respect of Bid Loans, the Borrower agrees to request each
Borrowing from the Lenders pro rata in all respects according to their
respective Commitments and the Lenders agree to make each Borrowing available to
the Borrower pro rata in all respects according to their respective Commitments.
A Lender shall not be responsible for the Commitments of any other Lender.
Without prejudice to the rights of the Borrower against a defaulting Lender, the
failure or incapacity of a Lender to make available its Participation in a
Borrowing to the Borrower in accordance with its obligations under this
Agreement does not release the other Lenders from their obligations.
3.8 Accounts Kept by the Administrative Agent
The Administrative Agent shall keep in its books, accounts for the Loan
and other amounts payable by the Borrower under this Agreement. The
Administrative Agent shall keep appropriate registers showing, the amount of the
indebtedness of the Borrower in respect of the Loan and showing each payment or
repayment of principal and interest made in respect of such indebtedness. Such
registers shall constitute (in the absence of manifest error) prima facie
evidence of their content against the Borrower, the Guarantors and the Lenders;
provided that the obligation of the Borrower and the Guarantors to pay or repay
any indebtedness and liability in accordance with the terms and conditions of
this Agreement shall not be affected by the failure of the Administrative Agent
to keep such registers. The Administrative Agent shall supply any Lender and the
Borrower, on demand, with copies of such registers.
3.9 Accounts Kept by each Lender
Each Lender shall keep in its books, in respect of its Participation,
accounts for the Loan, any Bid Loans and Money Market Loans made by it, and
other amounts payable by the Borrower to it under this Agreement. Each Lender
shall make appropriate entries showing, as debits, the amount of the
indebtedness of the Borrower towards it in respect of the Loan, any such Bid
Loan or Money Market Loan, the amount of all accrued interest and any other
amount due to such Lender pursuant hereto and, as credits, each payment or
repayment of principal and interest made in respect of such indebtedness as well
as other amount paid to such Lender pursuant hereto. These accounts shall
constitute (in the absence of manifest error or of contradictory entries in the
accounts of the Administrative Agent referred in Section 3.8) prima facie
evidence of their content against the Borrower and the Guarantors.
ARTICLE 4
REPAYMENT, CONVERSION AND REDUCTION
4.1 Mandatory Repayment and Prepayment of the Loan
4.1.1 The Borrower covenants and agrees that it shall repay the Term
Loans made to it to the Administrative Agent for the account of the Lenders on
the Term Loan Maturity Date together with all unpaid interest accrued thereon or
owing pursuant thereto. The Borrower covenants and agrees that it shall repay
the Revolving Loans made to it to the Administrative Agent for the account of
the Lenders on the Revolving Loan Commitment Termination Date together with all
unpaid interest accrued and other amounts owing and unpaid hereunder or pursuant
hereto.
4.1.2 The Company and the Borrower further covenant and agree that, no
later than the fifth Business Day following the date of receipt by the Company
or any of its Subsidiaries of any Net Asset Sale Proceeds in respect of any
Asset Sale consummated prior to the STB Approval Date, the Company and the
Borrower shall, and Company shall cause each borrower under the Canadian Credit
Agreement to, subject to Section 4.1.3, prepay the Term Loans, the Revolving
Loans, the Canadian Term Loans and the Canadian Revolving Loans in an aggregate
amount equal to such Net Asset Sale Proceeds (rounded downwards to the next
lowest multiple of US$100,000); provided, however, that the Company and the
Borrower shall not be required to repay any such Net Asset Sale Proceeds until
the aggregate amount thereof not yet applied to the repayment of the Term Loans,
Revolving Loans, Canadian Term Loans and Canadian Revolving Loans pursuant to
Section 4.1.3 exceeds US$10,000,000, at which time the Company and the Borrower
shall be obligated to repay (or cause each borrower under the Canadian Credit
Agreement to repay, as the case may be) all such Net Asset Sale Proceeds in
accordance with this Section as if the Company and its Subsidiaries had received
such amounts at such time; provided that, if the amount of any prepayment to the
Term Loans or Revolving Loans to be made by the Borrower pursuant to this
Section 4.1.2 exceeds the aggregate principal amount of that portion of the Loan
bearing interest at a rate determined by reference to the US Base Rate, the
Borrower shall place and maintain with the Administrative Agent an interest
bearing deposit in the amount of such excess amount pending application of such
amounts on deposit (it being understood that the Borrower, other than upon the
occurrence and during the continuance of an Event of Default, may direct the
Administrative Agent to invest such amounts on deposit in cash equivalents) from
time to time as soon as practicable thereafter to repay Term Loans or Revolving
Loans, respectively, consisting of US Base Rate Loans or other Advances to the
Borrower, which application shall be made in a manner which does not require
additional payments by the Borrower pursuant to Section 9.9.4.
4.1.3 Any prepayments made pursuant to Section 4.1.2 shall be made
without premium or penalty and shall be applied first, to the prepayment of the
Term Loans and the Canadian Term Loans pro rata according to the respective
outstanding principal amount, if any, of each and to the full extent thereof,
and second, to the prepayment of the Revolving Loans and the Canadian Revolving
Loans pro rata according to the respective outstanding principal amount, if any,
of each and to the full extent thereof; provided that prepayments of the
Revolving Loans shall not be required pursuant to Section 4.1.2 or this Section
4.1.3 if on the date the relevant Net Asset Sale Proceeds are received by the
Company or any of its Subsidiaries (i) the Company's Public Debt Rating by S&P
is BBB or higher or the Company's Public Debt Rating by Moody's is Baa2 or
higher and (ii) the aggregate Revolving Loan Commitments and the commitments
under the Canadian Credit Agreement to make Canadian Revolving Loans are not
greater than US$700,000,000.
4.2 Optional Repayments
4.2.1 At any time prior to the Revolving Loan Commitment Termination
Date, subject to Section 4.4, the Borrower may elect to repay by a Notice of
Optional Repayment received by the Administrative Agent, and on the Optional
Repayment Date set forth therein the Borrower shall repay, to the Administrative
Agent for the account of the Lenders, all or part of the Borrowings under the
Credit with interest accrued thereon to the date of such repayment. Within the
limits of each Lender's Revolving Loan Commitment and subject to the terms of
this Agreement, the Borrower may reborrow any Revolving Loans so repaid. Any
optional repayments pursuant to this Section 4.2 shall be applied as specified
by the Borrower in the applicable Notice of Optional Prepayment; provided that
in the event the Borrower fails to specify the Loans to which any such
prepayment shall be applied, such prepayment shall be applied first to repay
outstanding Revolving Loans to the full extent thereof, and applied pro rata in
proportion to the amount of Revolving Loans made to the Borrower, and second to
repay outstanding Term Loans to the full extent thereof. Notwithstanding
anything in this Agreement to the contrary, the Borrower shall not make any
optional prepayment of all or a portion of the outstanding Term Loans unless a
ratable portion of the Canadian Term Loans outstanding at the time of such
prepayment are also prepaid concurrently therewith.
4.2.2 Subject to compliance with Section 4.2.1, prepayments may be made
without premium or penalty.
4.2.3 All optional repayments are in addition to and not in replacement
of mandatory repayments provided for in Section 4.1.1.
4.2.4 Notwithstanding the foregoing, a Borrowing outstanding by way of
Letter of Credit may only be repaid or discharged prior to the expiry date of
the Letter of Credit by:
(a) the Administrative Agent being fully released and discharged of all
its liabilities and obligations arising from such Letter of Credit and
by written evidence satisfactory to the Administrative Agent of such
full release and discharge being delivered to the Administrative Agent;
or
(b) by way of the issue to the Administrative Agent by a financial
institution acceptable to the Administrative Agent, in its sole
discretion, of a full, unconditional counter-guarantee or indemnity in
favor of the Administrative Agent acceptable to the Administrative
Agent in respect of such Letter of Credit.
4.3 Conversion Option
4.3.1 At any time prior to the Term Loan Maturity Date or the Revolving
Loan Commitment Termination Date, respectively, subject to Section 4.4, the
Borrower may elect to convert by Notice of Conversion received by the
Administrative Agent, and on the Conversion Date set forth therein the Borrower
shall convert, any basis of funding (other than Letters of Credit) of all or any
portion of the Borrowings consisting of Term Loans and/or the Borrowings
consisting of Revolving Loans, respectively (each a "Converted Advance"), into
another basis of funding (each a "Conversion Advance"); provided that the
Borrower may convert the basis of funding of any Borrowings only into another
basis that the Borrower is permitted to select for such Borrowings under Section
3.1 or 3.2. The provisions of this Agreement relating to Libor Advances shall
apply mutatis mutandis to Conversion Advances comprising Libor Advances.
4.3.2 If on any date an Advance is outstanding with respect to which
notice has not been delivered to the Administrative Agent specifying the
applicable basis for determining the rate of interest, then for that day that
Advance shall bear interest by reference to the US Base Rate.
4.4 Requirements for Optional Repayments and Optional Conversions
Each optional repayment pursuant to Section 4.2 or conversion pursuant
to Section 4.3 shall be subject to the following terms and conditions:
4.4.1 each repayment or conversion shall be in a minimum amount of
US$10,000,000 or such larger amount as is an integral multiple of US$1,000,000
(or, for repayments, the remaining balance of the Borrowings if less than such
minimum amount), and shall be made on a Business Day specified in the Notice of
Optional Repayment or Notice of Conversion;
4.4.2 the Borrower shall have given the Administrative Agent notice in
accordance with Section 3.6 for each repayment and each conversion, each notice
stating the proposed date of the repayment or conversion and either the
aggregate principal amount of the repayment or the aggregate principal amount of
the Converted Advance and the type of Conversion Advance;
4.4.3 if a Notice of Optional Repayment is given, it shall be
irrevocable and binding on the Borrower and the Borrower shall repay on the
Optional Repayment Date specified in such notice in USDollars the amount stated
in such notice with accrued interest to the date of such repayment; and if a
Notice of Conversion is given it shall be irrevocable and binding on the
Borrower; and
4.4.4 should any such repayment or conversion result in the repayment
of or conversion from any Libor Loan Portion on a day other than the last day of
its then current Interest Period, the Borrower shall, in addition, pay to the
Administrative Agent the amount calculated as set forth in Section 9.9.4.
4.5 Authority to Debit
In respect of all amounts payable by the Borrower under this Agreement,
the Borrower hereby irrevocably authorizes and instructs the Administrative
Agent to withdraw from or debit, from time to time when such amounts are due and
payable, any account of the Borrower listed in Schedule 4.5 annexed hereto (as
such Schedule 4.5 may be amended from time to time as agreed between the
Borrower and the Administrative Agent) for the purpose of satisfying payment
thereof.
4.6 Reduction of the Commitments
4.6.1 The Borrower may, upon at least five (5) Business Days' notice to
the Administrative Agent, terminate in whole or reduce ratably in part (without
premium or penalty) the unused portions of the Commitments of the Lenders;
provided that each partial reduction shall be in the aggregate amount of
US$25,000,000 or an integral multiple of US$5,000,000 in excess of
US$25,000,000. In any such notice, the Borrower must state the proposed date and
aggregate principal amount of the reduction and, if such notice is given, the
Borrower shall pay the Administrative Agent in accordance with such notice the
amount, if any, by which the Total Utilization of Revolving Loan Commitments
(after giving effect to any Money Market Reduction) exceeds the proposed reduced
aggregate Revolving Loan Commitments and the Borrower shall pay at the same time
all interest and other amounts owing in respect of such excess amount accrued to
the date of such reduction. Should any such payment result in the payment of any
Libor Loan Portion on a day other than the last day of its then current interest
period, the Borrower shall, in addition, pay to the Administrative Agent for the
benefit of the applicable Lenders the amount calculated as set forth in Section
9.9.4.
4.6.2 On each date that the Revolving Loans are required to be prepaid
pursuant to Section 4.1.2, the Revolving Loan Commitments shall be permanently
reduced in the amount of such required prepayment.
4.7 Increase of Revolving Loan Commitment
The Borrower may, from time to time, request an increase of each
Lender's Revolving Loan Commitment by giving written notice to the
Administrative Agent making such request and specifying the date upon which the
Borrower requests that such increase come into effect (the "Effective Date") and
detailing the amount by which each Lender's Revolving Loan Commitment shall be
increased; such notice shall be given by the Borrower between the 90th and 60th
days prior to the Effective Date. The Administrative Agent shall promptly
forward a copy of such request to the Lenders and each Lender shall notify the
Administrative Agent within 30 days of the Borrower's request whether such
Lender is willing to grant such an increase. In the event that a Lender has
failed to notify the Administrative Agent within such 30 day period of whether
it has elected to increase its Revolving Loan Commitment, such Lender shall be
deemed not to have elected to increase its Revolving Loan Commitment. Each
increase request shall be considered by each Lender, in its sole discretion, and
each Lender shall not, under any circumstances, be obliged to approve or accept
any increase request. The Administrative Agent shall promptly notify the
Borrower and the Lenders which Lenders have elected to increase their respective
Revolving Loan Commitments. In the event that a Lender elects to increase its
Revolving Loan Commitment then (regardless of whether any other Lender has
elected to so increase but provided there is no increase in the Total Commitment
unless all the Lenders and all lenders designated as "Lenders" under the
Canadian Credit Agreement have agreed thereto) the Revolving Loan Commitment for
such Lender shall be increased by the amount of the increase requested by the
Borrower and agreed to by such Lender.
If a Lender elects or is deemed to have elected not to increase its
Revolving Loan Commitment, the Lenders who have elected to increase their
Revolving Loan Commitments shall have the option (all such Lenders who elect to
exercise such option being "Accepting Lenders") to take up on a pro rata basis
the dissenting Lenders' portion of the increase by so advising the
Administrative Agent. The Administrative Agent shall allocate amongst the
Accepting Lenders the amount of the Revolving Loan Commitment available from
each dissenting Lender in its discretion but always on a pro rata basis or as
nearly pro rata as shall be practical.
If the Accepting Lenders do not take up all of the dissenting Lenders'
portion of the increase (on a pro rata basis or otherwise), the Borrower may, at
its option (and at any time prior to or on the applicable Effective Date) offer
such portion to one or more financial institutions, provided that such other
financial institutions are acceptable to the Administrative Agent and provided
such offer is consummated as soon as possible to the satisfaction of the
Administrative Agent. The provisions in Section 15.14 dealing with Dissenting
Lenders shall not apply to a dissenting Lender under this Section 4.7.
ARTICLE 5
INTEREST AND FEES
5.1 Interest
The Borrowings shall bear interest from the date of each Advance,
calculated on a daily basis and payable in arrears, on the US Base Rate Loan at
the US Base Rate, and on each Libor Loan Portion at LIBOR plus the Applicable
Margin in effect from time to time for such Libor Loan Portion for the then
current Interest Period, and all overdue amounts shall bear interest in
accordance with Section 5.5. All outstanding amounts shall bear interest both
before and after default and before and after judgment at the rates determined
as aforesaid.
5.2 Payment of Interest on Libor Loan
On each Interest Payment Date in respect of each Libor Loan Portion of
a Lender, the Borrower shall pay the Administrative Agent interest on such Libor
Loan Portion at the rate per annum determined by the Administrative Agent to be
LIBOR in respect of such Libor Loan Portion for the applicable Interest Period
plus the Applicable Margin in effect from time to time during such Interest
Period. Upon determination of the applicable rate of interest on any Libor Loan
Portion, the Administrative Agent shall notify the Borrower of this rate. The
Administrative Agent will compute the interest on the basis of the actual number
of days elapsed in the period for which such interest is payable divided by
three hundred and sixty (360).
5.3 Payment of Interest on US Base Rate Loan
On each Interest Payment Date in respect of the US Base Rate Loan, the
Borrower shall pay the Administrative Agent interest on the US Base Rate Loan at
the US Base Rate. The Borrower will pay this interest in arrears for the period
up to but excluding such Interest Payment Date; the Administrative Agent will
compute the interest on the basis of the actual number of days elapsed in the
period for which such interest is payable divided by the actual number of days
of the year. Each change in the fluctuating interest rate for the US Base Rate
Loan will take place simultaneously with the corresponding change in the US Base
Rate.
5.4 Selection of Interest Periods
In each Notice of Borrowing delivered pursuant to Section 3.3 and each
Notice of Conversion delivered pursuant to Section 4.3 in which the Borrower has
elected a Borrowing or Conversion Advance comprising a Libor Loan Portion and at
least three Business Days prior to the last day of each Interest Period in
respect of each Libor Loan Portion, the Borrower shall select and notify the
Administrative Agent of the Interest Period applicable to such Libor Loan
Portion commencing on the Drawdown Date, Conversion Date or last day of the
Interest Period, as the case may be, and ending on a Business Day, which period
shall be one (1) month, two (2) months, three (3) months, six (6) months or,
subject to availability, nine (9) months or twelve (12) months, as the Borrower
may elect; provided, however, that:
5.4.1 if the Borrower fails to so elect the duration of any Interest
Period, the amount of such Libor Loan Portion shall be deemed to be a US Base
Rate Advance at the end of the current Interest Period and interest thereon
shall be payable at the US Base Rate; and
5.4.2 the amount in respect of which the Borrower selects an Interest
Period shall not be less than ten million USDollars (US$10,000,000) and in
integral multiples of one million USDollars (US$1,000,000) in excess thereof.
5.5 Default Interest
If the Borrower defaults in any payment of principal, interest or any
other amount due pursuant to this Agreement, the Borrower shall pay to the
Administrative Agent on demand interest on such overdue principal, overdue
interest and other overdue amount, from the date the amount is due until the
date it is paid in full, and all interest on overdue principal, all overdue
interest and all interest on overdue interest shall be compounded monthly, at
the rates per annum as follows:
5.5.1 with respect to the Libor Loan and any Libor Advance to the
Borrower the Borrower shall be deemed to have elected that any amount of
principal of the Libor Loan or any Libor Loan Portion or Libor Advance which is
not paid when due shall thereupon cease to be a Libor Loan or Libor Advance and
shall be a US Base Rate Advance, and the Borrower shall pay interest on all such
overdue principal and any overdue interest and interest on interest thereon at a
fluctuating rate per annum at all times equal to the US Base Rate plus two
percent (2%) per annum; and
5.5.2 on overdue principal of, and overdue interest on, the US Base
Rate Loan, and on any other amounts owing, at a fluctuating rate per annum at
all times equal to the US Base Rate plus two percent (2%) per annum.
5.6 Determination of Interest Rates
5.6.1 Each Reference Lender, at the request of the Administrative
Agent, agrees to furnish to the Administrative Agent timely information for the
purpose of determining each US Base Rate and each LIBOR. If any one or more of
the Reference Lenders shall not furnish such timely information to the
Administrative Agent for the purpose of determining any such interest rate or
fee, the Administrative Agent shall determine such interest rate or fee on the
basis of timely information furnished by the remaining Reference Lenders.
5.6.2 Each determination by the Administrative Agent from time to time
of the US Base Rate, LIBOR and the Applicable Margin shall, in the absence of
manifest error, be final, conclusive and binding upon the Borrower, the
Guarantors and the Lenders.
5.7 Underwriting Fee
The Company shall pay to the Arrangers, for their own accounts, the
underwriting fees set forth in that certain letter agreement between the Company
and the Arrangers dated February 9, 1998, to the extent not paid prior to the
date hereof.
5.8 Facility Fee
The Borrower shall pay to the Administrative Agent, for the account of
each Lender, a facility fee from the Closing Date until the Revolving Loan
Commitment Termination Date on the sum of the amount of such Lender's Revolving
Loan Commitment (whether used or unused) and (x) until the Initial Funding Date,
such Lender's Term Loan Commitment and (y) on and after the Initial Funding
Date, the principal amount of such Lender's outstanding Term Loan at the rate
equal to the Facility Fee in effect from time to time during the period for
which such payment is made, payable in arrears on the last day of each March,
June, September and December, commencing on the first such day to occur after
the Closing Date and on the Revolving Loan Commitment Termination Date. The
Facility Fee shall accrue from day to day and be calculated on the basis of a
year of 365 (or 366 in a leap year) days for the actual number of days elapsed.
Under no circumstances shall such Facility Fee be refundable either in whole or
in part, even if no Advance is ever made under the terms hereof.
5.9 Administrative Fee
The Company shall pay to the Administrative Agent, for its account
exclusively, an annual administrative fee as agreed between the Company and the
Administrative Agent in a letter agreement dated February 6, 1998.
5.10 Certain Computations
5.10.1 All computations of interest shall be made by the Administrative
Agent taking into account the actual number of days occurring in the period for
which such interest is payable, and (i) with respect to the US Base Rate, on the
basis of a year of 365 or 366 days, as the case may be, or (ii) with respect to
LIBOR, or any interest accruing on a Fixed Rate Advance, on the basis of a year
of 360 days.
ARTICLE 6
[INTENTIONALLY OMITTED]
ARTICLE 7
LETTERS OF CREDIT
7.1 Letter of Credit Commitment
Subject to the terms and conditions hereof, the Administrative Agent,
on behalf of the Lenders, and in reliance on the agreements of the Lenders set
forth in Section 7.2, agrees to issue for the account of the Borrower Letters of
Credit in USDollars from time to time on any Business Day during the period from
the date hereof until the date occurring one month prior to the Revolving Loan
Commitment Termination Date; provided that (a) the Letter of Credit Exposure
shall not at any time exceed US$80,000,000, (b) the Borrower shall not request
the issuance of any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments (after giving effect to any
Money Market Reduction) would exceed the aggregate Revolving Loan Commitments
and (c) the Borrower shall not request the issuance of, and the Administrative
Agent shall not issue, any Letter of Credit having an expiration date later than
the Revolving Loan Commitment Termination Date.
7.2 Letter of Credit Participations
The Administrative Agent irrevocably grants, and in order to induce the
Administrative Agent to issue its Letters of Credit for the account of the
Borrower hereunder, each Lender irrevocably accepts and hereby purchases from
the Administrative Agent, on the terms and conditions hereinafter stated, for
its own account and risk an undivided interest equal to such Lender's
Participation in the Administrative Agent's obligations and rights under each
Letter of Credit issued hereunder for the account of the Borrower and the amount
of each draft paid by the Administrative Agent thereunder. Each Lender
unconditionally and irrevocably agrees with the Administrative Agent that, on or
before the close of business of the Administrative Agent, on each day on which a
draft is paid under a Letter of Credit issued for the account of the Borrower
for which the Administrative Agent is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, including, without limitation,
pursuant to Section 7.8.1 (a "Lender Participation Date"), such Lender will pay
to the Administrative Agent for the account of the Administrative Agent at the
Administrative Agent's office specified in Section 9.1 such Lender's
Participation of any unpaid Reimbursement Obligation. The Administrative Agent
shall notify each Lender of the occurrence of a Lender Participation Date, and
the amount payable by it to the Administrative Agent based on such Lender's
Participation. Any such notice may be oral if promptly confirmed in writing
(including telecopy). If any Lender fails to make any such payment on or prior
to the first Business Day after such Lender receives notice as provided above,
then interest shall accrue on such Lender's obligation to make such payment
during the period from such Business Day to the day such Lender makes such
payment (or if earlier, the date on which the Borrower reimburses the
Administrative Agent for such unpaid Reimbursement Obligation) at the rate
specified in Section 15.6.2.
7.3 Repayment of Participants
Upon and only upon receipt by the Administrative Agent of funds from
the Borrower in full or partial reimbursement of any draft paid under a Letter
of Credit with respect to which any Lender has theretofore paid the
Administrative Agent for the account of the Administrative Agent in full for
such Lender's participation pursuant to Section 7.2 and in full or partial
payment of interest, commissions or fees on such draft paid under a Letter of
Credit, the Administrative Agent will pay to such Lender, in the same funds as
those received by the Administrative Agent, or net against any then due
obligation of such Lender under Section 7.2 to make any payment to the
Administrative Agent, such Lender's Participation of such funds.
7.4 Role of the Administrative Agent
The Administrative Agent will exercise and give the same care and
attention to each Letter of Credit as it gives to its other letters of credit
and similar obligations, and the Administrative Agent's sole liability to each
Lender shall be to distribute promptly, as and when received by the
Administrative Agent, each Lender's Participation of any payments made to the
Administrative Agent by the Borrower pursuant to Section 7.2. Each Lender agrees
that, in paying any drawing under a Letter of Credit, the Administrative Agent
shall not have any responsibility to obtain any document (other than as required
by such Letter of Credit) or to ascertain or inquire as to the validity or
accuracy of any such document or the authority of any Person delivering any such
document. Neither the Administrative Agent nor any of its representatives,
officers, employees or agents shall be liable to any Lender for (a) any action
taken or omitted to be taken in connection herewith at the request or with the
approval of the Majority Lenders, (b) any action taken or omitted to be taken in
the absence of gross negligence or wilful misconduct, (c) any recitals,
statements, representations or warranties contained in any document distributed
to any Lender, (d) the creditworthiness of the Borrower, or (e) the execution,
effectiveness, genuineness, validity, or enforceability of any Letter of Credit,
or any other document contemplated thereby. The Administrative Agent shall not
incur any liability (i) by acting in reliance upon any notice, consent,
certificate, statement or other writing (which may be a bank wire, telex or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties or (ii) by acting as permitted under Section 7.14. The
obligations of the Lenders hereunder are several, and no Lender shall be liable
for the performance or non-performance of the obligations of any other Lender
under this Article 7.
7.5 Lenders' Obligations Absolute
Each Lender acknowledges that its obligations to the Administrative
Agent under this Article 7, including the obligation to purchase and fund a
participation in the obligations and rights of the Administrative Agent under
each Letter of Credit and any unpaid Reimbursement Obligation, is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, (i) the occurrence and continuance of an Event of
Default or an event which, with the giving of notice or the passage of time, or
both, would constitute an Event of Default, (ii) subject to the next sentence of
this Section 7.5, the fact that a condition precedent to the issuance of any
Letter of Credit was not in fact satisfied, (iii) any failure or inability of
any other Lender to purchase or fund such a participation hereunder, or (iv) any
other failure by any other Lender to fulfil its obligations hereunder. Without
affecting the rights and remedies of the Administrative Agent and the Lenders
with respect to the Borrower in the event of any such condition precedent is not
in fact satisfied, each Lender authorizes the Administrative Agent in its sole
discretion and on behalf of such Lender (but without obligating the
Administrative Agent), without further notice to such Lender so long as the
Administrative Agent shall have notified the Lenders two Business Days prior to
the day of issuance that such condition precedent is not or will not be
satisfied, to waive any condition precedent set forth in Article 10 to the
issuance of the Letter of Credit (or deem each such condition precedent
satisfied) in connection with each issuance of the Letters of Credit unless the
Administrative Agent shall have received by the close of its business, Montreal
time, on the Business Day immediately preceding the day of such issuance written
instructions from the Majority Lenders not to waive such condition precedent and
such written instructions have not been withdrawn by the Majority Lenders. Each
payment by a Lender to the Administrative Agent for its own account shall be
made, without any offset, compensation, abatement, withholding or reduction
whatsoever.
7.6 Reinstatement and Survival
Notwithstanding anything herein to the contrary, if the Administrative
Agent is required at any time whether before or after the Revolving Loan
Commitment Termination Date to make any payment under a Letter of Credit which
was outstanding on or before the Revolving Loan Commitment Termination Date,
each Lender shall pay over to the Administrative Agent, in accordance with the
provisions of this Article 7, the amount of such Lender's Participation of such
amount. If the Administrative Agent is required at any time (whether before or
after the Revolving Loan Commitment Termination Date) to return to the Borrower
or to a trustee, receiver, liquidator, custodian or other similar official any
portion of the payments made by or on behalf of the Borrower to the
Administrative Agent in reimbursement of Reimbursement Obligations and interest
thereon, each Lender shall, on demand of the Administrative Agent, forthwith pay
over to the Administrative Agent for its account such Lender's Participation of
such amount, plus interest thereon from the day such demand is made to the day
such amount is returned by such Lender to the Administrative Agent at the rate
specified in Section 15.6.2.
7.7 Procedure for Issuance and Renewal of Letters of Credit
7.7.1 The Borrower may request the Administrative Agent to issue a
Commercial Letter of Credit in favor of a seller of goods to the Borrower, by
delivering to the Administrative Agent at its office specified in Section 9.1 a
commercial letter of credit application on the Administrative Agent's then
customary form (as such form may be modified from time to time, the "Commercial
Letter of Credit Applications"), completed to the satisfaction of the
Administrative Agent, together with the proposed form of such Commercial Letter
of Credit (which shall comply with the applicable requirements set forth herein)
and such other certificates, documents and other papers and information as the
Administrative Agent may reasonably request; provided that in the event of a
conflict between this Agreement and the Commercial Letter of Credit Application,
this Agreement shall govern with respect to such conflict.
7.7.2 The Borrower may request the Administrative Agent to issue a
Standby Letter of Credit by delivering to the Administrative Agent at its office
specified in Section 9.1 a standby letter of credit application on the
Administrative Agent's then customary form (as such form may be modified from
time to time, the "Standby Letter of Credit Application"), completed to the
satisfaction of the Administrative Agent, together with the proposed form of
such Standby Letter of Credit (which shall comply with the applicable
requirements set forth herein) and such other certificates, documents and other
papers and information as the Administrative Agent may reasonably request;
provided that in the event of a conflict between this Agreement and the Standby
Letter of Credit Application, this Agreement shall govern with respect to such
conflict.
7.7.3 Within three (3) Business Days following the date on which the
Administrative Agent shall have received an application for the issuance of a
Letter of Credit including the form thereof, and such additional certificates,
documents and other papers and information as the Administrative Agent may have
reasonably requested in satisfaction of all conditions to the issuance thereof,
the Administrative Agent shall, provided the conditions of Article 10 have been
complied with, issue such Letter of Credit (if the Borrower shall have requested
that such Letter of Credit be issued immediately) or (if the Borrower shall have
requested in the related Commercial Letter of Credit Application or Standby
Letter of Credit Application that such Letter of Credit be issued at a later
date) the Administrative Agent shall notify the Borrower that the Administrative
Agent shall, provided the conditions of Article 10 have been complied with,
issue such Letter of Credit on such later date, or that the Administrative Agent
shall not issue such Letter of Credit by reason of a provision set forth herein.
7.7.4 The Borrower may request the extension or renewal of a Letter of
Credit issued hereunder which is not automatically renewed in accordance with
the terms contained therein, by giving written notice to the Administrative
Agent at least three (3) Business Days prior to the then current expiry date of
such Letter of Credit (provided that the Administrative Agent may accommodate
notices on shorter notice in its sole discretion). If the conditions precedent
in Section 10.2 shall have been fulfilled as required thereby, the
Administrative Agent shall promptly issue such extension or renewal.
7.7.5 With respect to any Letter of Credit issued hereunder which by
its terms is automatically renewed or extended unless notice to the contrary is
received by the beneficiary thereunder within the time period set forth therein
(the "Revocation Period"), the Administrative Agent shall, upon receipt of
notice from the Majority Lenders (which notice must be received by the
Administrative Agent not later than 10:00 A.M. (Montreal time) ten (10) Business
Days prior to the expiration of the Revocation Period so long as the
Administrative Agent shall have notified the Lenders of such renewal or
extension at least one Business Day prior to such date), to the effect that the
Majority Lenders have elected not to extend the current expiry date of such
Letter of Credit, promptly notify the Borrower and the beneficiary thereunder
that such Letter of Credit shall not be renewed.
7.7.6 Notwithstanding anything to the contrary in this Agreement, the
Administrative Agent shall have no obligation to extend or renew any Letter of
Credit issued hereunder to a maturity date extending beyond the Revolving Loan
Commitment Termination Date, and each Lender shall have no obligation to
purchase a participation in the Administrative Agent's obligations and rights
under any Letter of Credit extended or renewed to a date beyond the Revolving
Loan Commitment Termination Date.
7.8 Reimbursement of the Administrative Agent
7.8.1 In the event that any drawing shall be made under any Letter of
Credit, and if no Event of Default shall have occurred and be continuing, (i)
the Administrative Agent shall promptly notify the Borrower of such payment and
of the amount thereof, (ii) the payment by the Administrative Agent of such
drawing shall constitute the making of a US Base Rate Advance to the Borrower by
the Lenders according to their respective Participation and the Borrower shall
be deemed to have elected to denominate same in USDollars and pay interest
thereon at the US Base Rate, and (iii) immediately upon receipt of such notice,
each Lender shall make its Participation, available to the Administrative Agent
by wire transfer of immediately available funds to the office of the
Administrative Agent specified in Section 9.1.
7.8.2 In the event that a drawing shall be made under any Letter of
Credit and an Event of Default shall have occurred, no US Base Rate Advance
shall be deemed to have been made in respect of such drawing and the Borrower
(i) shall reimburse the Administrative Agent for the amount paid on each draft
drawn under each Letter of Credit not later than the close of business on the
first Business Day following the day on which the Borrower receives notice of
such drawing, and (ii) shall pay, (A) all charges and expenses relating to such
drawing as may be payable in accordance with Section 7.9 and (B) interest at the
rate specified in Section 7.10 on the amount of such drawing for the period
commencing on the date of any such payment and ending on the date reimbursement
is received by the Administrative Agent.
7.9 Commissions, Fees and Charges
7.9.1 The Borrower agrees to pay for each Letter of Credit, to (A) the
Administrative Agent (solely for its account) a non-refundable fronting fee with
respect to each Letter of Credit, in an amount equal to 1/8 of 1% per annum of
the face amount thereof, and (B) the Administrative Agent for the account of
each Lender, a non-refundable letter of credit commission, computed at a rate
equal to the Applicable Margin times such Lender's Participation of the
aggregate amount available to be drawn under such Letter of Credit, such
fronting fee and letter of credit commissions to be payable quarterly in advance
for the number of days outstanding, at the rate specified above and in the
currency of such Letter of Credit, commencing on the date of issuance of such
Letter of Credit and thereafter on the last day of each March, June, September
and December so long as such Letter of Credit shall remain outstanding.
7.9.2 In addition to the fees referred to in Section 7.9.1, the
Borrower agrees to pay or reimburse the Administrative Agent for such normal and
customary costs and expenses as are incurred or charged by the Administrative
Agent in issuing, effecting payment under or administering any Letter of Credit
(including, without limitation, amendment fees, correspondent lender fees,
reissuance costs and cancellation fees).
7.9.3 The Administrative Agent shall promptly distribute, at the end of
each calendar quarter, all letter of credit commissions received for the account
of each Lender by the Administrative Agent during such calendar quarter,
together with a statement from the Administrative Agent reconciling the
collection and distribution of such commissions.
7.10 Interest on Amounts Disbursed under Letters of Credit
Subject to Section 7.8, the Borrower agrees to pay to the
Administrative Agent interest on any and all amounts disbursed by the
Administrative Agent under any Letter of Credit from the date of disbursement
until reimbursed in full at the US Base Rate. Interest accrued hereunder shall
be payable on demand. For the purposes of computing the number of days for which
interest shall accrue on amounts disbursed under Letters of Credit, payments
received by the Administrative Agent after 1:00 PM., Montreal time, shall be
deemed to have been received on the next following Business Day. All payments
(including prepayments) by the Borrower to the Administrative Agent, whether on
account of the Borrower's Reimbursement Obligation or interest thereon, on
account of any fees due hereunder or otherwise, shall be made in USDollars for
Letters of Credit in USDollars and in immediately available funds without set
off, compensation or counterclaim to the Administrative Agent.
7.11 Computation of Interest and Fees; Payment not on Business Day
7.11.1 Interest and per annum fees due under this Article 7 shall be
computed on the basis of a year of 365 (or 366 in a leap year) days for actual
days elapsed. Any change in any interest rate hereunder resulting from a change
in the US Base Rate shall become effective as of the opening of business on the
day on which such change in the US Base Rate becomes effective.
7.11.2 If any payment under this Article 7 becomes due and payable on a
day which is not a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day, and, in the case of any amount disbursed under a
Letter of Credit, interest thereon shall be payable at the then applicable rate
during such extension.
7.12 Increased Costs
If any change occurring after the date of this Agreement in any Law or
in the interpretation or application thereof by any Governmental Authority
charged with the administration thereof shall either (i) impose, modify, assess
or deem applicable any reserve, special deposit, assessment or similar
requirement against Letters of Credit issued by the Administrative Agent or any
Lender or (ii) impose on the Administrative Agent or any Lender any other
condition regarding any Letter of Credit, and the result of any event referred
to in clauses (i) or (ii) above shall be to increase the cost to the
Administrative Agent or such Lender of issuing or maintaining a Letter of
Credit, or its participation therein, as the case may be (which increase in cost
shall be the result of the Administrative Agent's or such Lender's reasonable
allocation of the aggregate of such cost increases resulting from such events),
then, upon demand by the Administrative Agent or such Lender, the Borrower shall
immediately pay to the Administrative Agent or such Lender, from time to time as
specified by the Administrative Agent or such Lender, additional amounts which
shall be sufficient to compensate the Administrative Agent or such Lender for
such increased cost, together with interest on each such amount from the date
demanded until payment in full thereof at the rate provided in Section 7.10. A
certificate as to the fact and amount of such increased cost incurred by the
Administrative Agent or any Lender as a result of any event mentioned in clauses
(i) or (ii) above, submitted by the Administrative Agent or any such Lender to
the Borrower, shall be conclusive, absent manifest error.
In the event the Borrower is required to pay additional amounts as
compensation for increased cost as provided above, the Borrower shall (subject
to the terms hereof) be entitled to require (with a copy to the Administrative
Agent) the Lender to whom such additional amounts are being paid to assign to an
alternate lender in accordance with Section 16.1.7 all of such Lender's rights
and obligations hereunder and such alternate lender shall execute all such
documents as may be reasonably required by the Administrative Agent, the
Borrower and such Lender to effect such assignment provided that (i) each such
assignment shall be arranged by the Borrower (with such reasonable assistance
from such Lender as the Borrower may request) after consultation with the
Administrative Agent and shall be an assignment of all of the rights and
obligations of the assigning Lender under this Agreement, (ii) no Lender shall
be obligated to make any such assignment as a result of a demand by the Borrower
pursuant to this Section 7.12 unless and until such Lender shall have received
payment from either the Borrower or the assignee in an aggregate amount at least
equal to the aggregate outstanding principal amount of the Loan and Bid Loan and
any Money Market Loans owing to such Lender, together with accrued interest
thereon to the date of payment of such principal amount and all other amounts
payable to such Lender under this Agreement (including, without limitation,
payment of the increased costs and additional amounts demanded by such Lender
pursuant to this Section 7.12 incurred by such Lender prior to the effective
date of such assignment), and (iii) such alternate lender shall have been
approved in writing by the Administrative Agent, such approval not to be
unreasonably withheld.
7.13 Further Assurances
The Borrower hereby agrees from time to time, to do and perform any and
all acts and to execute any and all further instruments required or reasonably
requested by the Administrative Agent more fully to effect the purposes of this
Article 7 and the issuance of the Letters of Credit hereunder.
7.14 Nature of Obligations; Indemnities
7.14.1 The obligations of the Borrower hereunder shall be absolute and
unconditional under any and all circumstances and irrespective of any set off,
compensation, counterclaim or defense to payment which the Borrower may have or
have had against the Administrative Agent, any Lender or any beneficiary of a
Letter of Credit. The Borrower assumes all risks of the acts or omissions of the
users of the Letters of Credit and all risks of the misuse of the Letters of
Credit. Neither the Administrative Agent, any of its correspondents nor any
Lender shall be responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document specified in any applications for
any of the Letters of Credit, even if it should in fact prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any of the Letters of Credit or any of the
rights or benefits thereunder or proceeds thereof in whole or in part, which may
prove to be invalid or ineffective for any reason; (iii) for failure of any
draft to bear any reference or adequate reference to any of the Letters of
Credit, or failure of anyone to note the amount of any draft on the reverse of
any of the Letters of Credit or to surrender or to take up any of the Letters of
Credit or to send forward any such document apart from drafts as required by the
terms of any of the Letters of Credit; (iv) for error, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (v) for any
error, neglect, default, suspension or insolvency of any correspondents of the
Administrative Agent; (vi) for error in translation or for errors in
interpretation of technical terms; (vii) for any loss or delay, in the
transmission or otherwise, of any such document or draft or of proceeds thereof;
or (viii) for any other circumstances whatsoever in making or failing to make
payment under a Letter of Credit; provided that in each of the circumstances
referred to in clauses (i) through (viii) above the Borrower shall have a claim
against the Administrative Agent, and the Administrative Agent shall be liable
to the Borrower, to the extent, but only to the extent, of any direct, as
opposed to consequential, damages suffered by the Borrower which the Borrower
proves were caused by the Administrative Agent's wilful misconduct or gross
negligence. None of the above shall affect, impair or prevent the vesting of any
of the rights or powers of the Administrative Agent or any of the Lenders.
7.14.2 In furtherance and extension and not in limitation of the
specific provisions hereinabove in this Article 7 set forth, (i) any action
taken or omitted by the Administrative Agent or by any of its respective
correspondents under or in connection with any of the Letters of Credit, if
taken or omitted in good faith and without wilful misconduct or gross
negligence, shall be binding upon the Borrower and shall not put the
Administrative Agent or its respective correspondents under any resulting
liability to the Borrower and (ii) the Administrative Agent may, without wilful
misconduct or gross negligence, accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary; provided, that if the Administrative
Agent shall receive written notification from both the beneficiary of a Letter
of Credit and the Borrower that sufficiently identifies (in the opinion of the
Administrative Agent) documents to be presented to the Administrative Agent
which are not to be honored, the Administrative Agent agrees that it will not
honor such documents.
7.14.3 The Borrower hereby agrees at all times to protect, indemnify
and save harmless the Administrative Agent and each Lender participating in a
Letter of Credit, from and against any and all claims, actions, suits and other
legal proceedings, and from and against any and all losses, claims, demands,
liabilities and damages, which they or any of them may, at any time, sustain or
incur by reason of or in consequence of or arising out of the issuance of any of
the Letters of Credit (all of the foregoing, collectively, the "indemnified
liabilities"), it being the intention of the parties that this Agreement shall
be construed and applied to protect and indemnify each of the Administrative
Agent and each Lender participating in a Letter of Credit against any and all
risks involved in the issuance of all of the Letters of Credit, all of which
risks, whether or not foreseeable, being hereby assumed by the Borrower,
including, without limitation, any and all risks of all acts by any Governmental
Authority and any and all claims by correspondents used in connection with a
Letter of Credit, provided that the Borrower shall not have any obligation
hereunder to an indemnified party with respect to indemnified liabilities
arising from the gross negligence or wilful misconduct of such indemnified
party. Neither the Administrative Agent nor any Lender shall, in any way, be
liable for any failure by it or anyone else to pay a draft drawn under any of
the Letters of Credit as a result of any acts, whether rightful or wrongful, of
any Governmental Authority or any correspondent used in connection with a Letter
of Credit or any other cause not readily within their control or the control of
their respective correspondents. Without limiting the generality of the
foregoing, the Borrower shall be responsible for, and shall reimburse the
Administrative Agent forthwith upon its receipt of any demand therefor, any and
all commissions, fees and other charges paid or payable by the Administrative
Agent to any foreign lender which shall be an advising lender or a beneficiary
of a Letter of Credit which shall, in reliance thereon, have issued its own
letter of credit in respect of obligations of the Borrower.
7.15 Payments upon any Event of Default
The Borrower agrees that upon the occurrence and during the continuance
of any Event of Default, in addition to all other rights and remedies, the
Administrative Agent shall at the request, or may with the consent, of the
Majority Lenders by notice to the Borrower demand, immediate delivery of cash
collateral, and the Borrower agrees to deliver such cash collateral upon demand,
in an amount equal to the maximum amount that may be available to be drawn at
any time prior to the stated expiry of all outstanding Letters of Credit,
provided that such cash collateral shall be immediately due and payable upon the
occurrence of any Event of Default described in Section 12.1.11. Such cash
collateral shall be deposited in a special cash collateral account to be held by
the Administrative Agent as collateral security and as a pledge for the payment
and performance of the Borrower's obligations under this Agreement to the Agents
and the Lenders.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
8.1 Substitute Basis - Alternate Interest Rate
If a Lender determines in good faith that:
8.1.1 adequate and fair means do not exist for ascertaining the rate of
interest on a Libor Loan Portion for the ensuing Interest Period,
8.1.2 the making or the continuing of a Libor Loan Portion has become
impracticable by an event materially or adversely affecting the London interbank
market, or
8.1.3 deposits in USDollars are not available to such Lender in the
London interbank market in sufficient amounts in the ordinary course of business
for the ensuing Interest Period in respect of a Libor Loan Portion, then, such
Lender may notify the Administrative Agent thereof and if such Lender so
notifies the Administrative Agent, the Administrative Agent shall promptly
notify the Borrower and the other Lenders in writing and, effective upon the
date such interest rate would otherwise become applicable, such Libor Loan
Portion shall be deemed for all purposes to be a US Base Rate Advance and the
interest rate applicable thereto shall be the applicable US Base Rate.
8.2 Increased Costs
If, with respect to any Borrowing or accommodation of any kind or
nature provided by the Lenders under this Agreement (each such form of
accommodation being in this Section 8.2 referred to as a "Facility") and as a
result of or due to any change occurring after the date of this Agreement in any
Law, or in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof or by reason of any compliance
with any guideline, request or requirement from any fiscal, monetary or other
authority (whether or not having the force of law),
(a) a Lender incurs a cost (which it would not otherwise have incurred)
or becomes liable to make a payment (calculated with reference to the
amount outstanding under a Facility) with respect to continuing to
provide or maintain a Facility or as a result of obligations of a
Lender being outstanding hereunder in favor of third parties (other
than a tax imposed on the overall income or net profits of such Lender
or franchise taxes imposed in lieu thereof);
(b) any reserve, special deposit or similar requirement is imposed or
increased with respect to a Facility increasing the cost thereof to a
Lender;
(c) a Lender suffers or will suffer a reduction in the rate of return
on its overall capital (other than a reduction by reason of any
increase in the taxes referred to in (a) above) as a result of the
amount of the capital that a Lender is required to maintain being
increased or of any change in the manner in which a Lender is required
to allocate its resources, or as a result of a requirement to attribute
or allocate capital in respect of any undrawn portion of a Facility;
(d) if there is any increase in the direct cost to a Lender of making
available the Facility; or
(e) a Lender becomes liable to make any payment (not being the payment
of tax on its overall income or net profits or franchise taxes imposed
in lieu thereof) on or calculated by reference to the amount of a
Facility;
then and in each such case the Borrower shall, subject to the terms and
conditions of this Section 8.2, pay to such Lender such amount (herein called
the "Compensating Amount") as will compensate such Lender for and will indemnify
such Lender against such increases in cost or reductions of rate of return or
liability with respect to the Facility.
After the occurrence of an event having the effect set out in (a), (b),
(c), (d) or (e) above entitling a Lender to the payment of a Compensating Amount
and such Lender determining to claim such Compensating Amount, such Lender shall
forthwith give notice to the Borrower of the Compensating Amount claimed with
details of the events giving rise thereto and shall at that time or within
twenty (20) days thereafter provide to the Borrower a certificate setting out in
reasonable detail a compilation of the Compensating Amount claimed or, if such
Lender is then unable to determine the Compensating Amount or the method of
compilation thereof an estimate of such Compensating Amount and/or the method or
the basis on which such Lender estimates the calculation will be made which
estimate will be confirmed or adjusted by the aforesaid certificate. The
certificate of a Lender with respect to the Compensating Amount shall be final
and conclusive in the absence of manifest error.
The Borrower shall within thirty (30) days of receipt of such notice
from a Lender pay to such Lender the Compensating Amount (or the estimated
Compensating Amount) claimed but, if the Compensating Amount claimed and paid is
greater or lesser than the Compensating Amount as finally determined, such
Lender or the Borrower, as the case may be, shall pay to the other the amount
required to adjust the payment to the Compensating Amount required to be paid.
The obligation to pay such a Compensating Amount for subsequent periods will
continue, subject as herein provided, until the earlier of the termination of
the Facility affected by the event referred to in the notice given by such
Lender to the Borrower or the lapse or cessation of the event giving rise to the
Compensating Amount.
A copy of any notice or certificate given pursuant to this Section 8.2
shall be given to the Administrative Agent at the same time as such notice or
certificate is given.
8.3 Illegality
Notwithstanding anything to the contrary contained in this Agreement,
if any introduction of or change occurring after the date of this Agreement in
any Law, policy, exchange control, guideline or official directive (whether or
not having the force of law) or any change in the interpretation or application
thereof by any court or by any Governmental Authority charged with the
administration thereof makes it unlawful or prohibited for a Lender to make,
fund or maintain all or any Libor Loan Portion or the Canadian Base Rate Loan,
or to give effect to its obligations contemplated by this Agreement, such Lender
shall notify the Borrower and the Administrative Agent in writing of the change
and, within the period specified by such Lender in the notice, at the option of
the Borrower:
8.3.1 if such introduction or change so affects the Libor Loan Portion,
the Borrower shall elect (i) that interest on the Libor Loan Portion shall be
payable at the US Base Rate, or (ii) to repay and, within the time required by
the new law (or at the end of any longer period that such Lender at its
discretion may agree), the Borrower shall repay the Libor Loan Portion, together
with accrued interest up to the date of payment and all other amounts which are
due, and in any such event the obligation of the Lenders to make any further
Libor Advance or to allow any conversion of an Advance into a Libor Advance
shall terminate for so long as any circumstance entitling any Lender to give
such a notice shall continue.
8.4 Indemnity
If the Borrower converts or prepays any amounts pursuant to Section 8.3
in respect to a Libor Loan Portion on a day other than the last day of an
Interest Period in respect of such Libor Loan Portion, the Borrower shall on
demand pay to the Administrative Agent, the amount required to indemnify the
Lenders for any loss, cost or expense incurred as a result of such conversion or
prepayment including, without limitation, any costs incurred in liquidating or
maintaining or redeploying deposits or other funds obtained by the Lenders to
fund such Libor Loan Portion. A certificate of the Lenders setting out the basis
of the determination of the amount necessary to indemnify them shall, in the
absence of manifest error, be conclusive and binding for all purposes.
8.5 Replacement of a Lender
In the event a Lender has given a notice to the Borrower pursuant to
Section 8.1, 8.2 or 8.3, the Borrower shall (subject to the terms hereof) be
entitled to require (with a copy to the Administrative Agent) the Lender having
given such notice to assign to an alternate lender in accordance with Section
16.1.7 all of such Lender's rights and obligations hereunder and such alternate
lender shall execute all such documents as may be reasonably required by the
Administrative Agent, the Borrower and such Lender to effect such assignment,
provided that (i) each such assignment shall be arranged by the Borrower (with
such reasonable assistance from such Lender as the Borrower may request) after
consultation with the Administrative Agent and shall be an assignment of all of
the rights and obligations of the assigning Lender under this Agreement, (ii) no
Lender shall be obligated to make any such assignment as a result of a demand by
the Borrower pursuant to this Section 8.5 unless and until such Lender shall
have received payment from either the Borrower or the assignee in an aggregate
amount at least equal to the aggregate outstanding principal amount of the Loan
and Bid Loan and any Money Market Loans owing to such Lender, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts payable to such Lender under this Agreement (including, without
limitation, payment of any amounts owing to such Lender pursuant to Section 8.1,
8.2 or 8.3, as applicable, prior to the effective date of such assignment),
(iii) such alternate lender shall have been approved in writing by the
Administrative Agent, such approval not to be unreasonably withheld, and (iv)
any such assignment shall be subject to the restrictions set forth in Section
16.1.3.
ARTICLE 9
PAYMENTS, TAXES, EXPENSES AND INDEMNITY
9.1 Payments by Borrower to Administrative Agent
Unless otherwise specifically provided for, the Borrower shall make
each payment pursuant to this Agreement before 11:00 a.m. (New York time) on the
day specified for payment. All such payments by the Borrower shall be made in
immediately available funds having same day value to the Administrative Agent,
for its account or for the account of the Lenders, at Harris Chicago, ABA
#071000288, beneficiary Bank of Montreal, Chicago, Illinois, for Account No.
1248566 or at any other office or account designated by the Administrative
Agent. Whenever a payment is due to be made on a day which is not a Business
Day, the day for payment shall be the following Business Day.
9.2 Payments by Lenders to Administrative Agent
All payments to be made by any Lender to the Administrative Agent shall
be made in immediately available funds having same day value to the
Administrative Agent, for the Borrower's account (unless otherwise specified),
at the branch, office or account mentioned in or designated under Section 9.1,
as applicable, for USDollar payments by the Borrower, and at the time designated
therein.
9.3 Payments by Administrative Agent to Borrower
Any payments received by the Administrative Agent for the account of
the Borrower shall be paid in funds having same day value to the Borrower by the
Administrative Agent on the date of receipt, or if such date is not a Business
Day on the next Business Day, to the Borrower's USDollar Account No. 274-959-6
at Harris Chicago, or to such other account in the United States as the Borrower
may designate in writing to the Administrative Agent.
9.4 Distribution to Lenders and Application of Payments
Except as otherwise indicated herein, all payments made to the
Administrative Agent by the Borrower for the account of the Lenders in
connection herewith shall be distributed the same day by the Administrative
Agent in funds having same day value among the Lenders to the accounts last
designated in writing by the Lenders respectively to the Administrative Agent
pro rata, in accordance with their respective Participations.
9.5 Currency Payment
Principal, interest and interest on overdue amounts on the Libor Loan,
any Libor Advance, the US Base Rate Loan, all Reimbursement Obligations with
respect to Letters of Credit outstanding and all other Advances, Bid Advances,
and Money Market Loans outstanding in USDollars and all other Advances, Bid
Advances and Money Market Loans outstanding in USDollars and all other amounts
payable by the Borrower under this Agreement shall be payable to the
Administrative Agent in USDollars, unless otherwise indicated herein.
9.6 Set-off
The Borrower shall make all payments hereunder regardless of any
counterclaim, compensation or set-off.
9.7 Taxes
(a) Any and all payments by the Borrower to or for the account of any
Lender or the Administrative Agent shall be made free and clear of and without
deduction for any and all present or future Taxes, duties, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Administrative Agent, Taxes on the
overall income or net profits (or franchise taxes imposed in lieu thereof) of
such Lender or Administrative Agent imposed by the United States or any
political subdivision thereof or by any foreign jurisdiction in which such
Lender or Administrative Agent is organized or has its applicable lending office
(all such non-excluded Taxes, duties, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Section 9.7
Taxes"). If the Borrower shall be required by law to deduct any Section 9.7
Taxes from or in respect of any sum payable hereunder to any Lender or the
Administrative Agent, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 9.7) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
law and (iv) the Borrower shall furnish to the Administrative Agent the original
or a certified copy of a receipt evidencing payment thereof.
(b) The Borrower agrees to indemnify each Lender and the Administrative
Agent for the full amount of Section 9.7 Taxes (including, without limitation,
any Section 9.7 Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section 9.7) paid by such Lender or the Administrative Agent (as the
case may be) and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. This indemnification shall be made
within 5 Business Days from the date such Lender or the Administrative Agent (as
the case may be) makes demand therefor.
(c) Each Lender that is not a citizen or resident of the United States
of America, a corporation, partnership or other entity created or organized in
or under the laws of the United States of America or any state or political
subdivision thereof (a "Non-US Lender") shall deliver to the Borrower and the
Administrative Agent two copies of either US Internal Revenue Service Form 1001
or Form 4224, or, in the case of a Non-US Lender claiming exemption from US
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a Form W-8, or any subsequent versions
thereof or successors thereto (and, if such Non-US Lender does not deliver a
Form W-8, a certificate that such Lender is not a "bank" for purposes of Section
881(c) of the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled
foreign corporation related to the Borrower (within the meaning of section
864(d)(4) of the Code)), properly completed and duly executed by such Non-US
Lender claiming complete exemption from, US federal withholding tax on all
payments by the Borrower under this Agreement. Such forms shall be delivered by
each Non-US Lender on or before the date it becomes a party to this Agreement
and on or before the date, if any, such Non-US Lender changes its Applicable
Lending Office by designating a different lending office (a "New Lending
Office"). In addition, each Non-US Lender shall deliver such forms promptly upon
the obsolescence or invalidity of any form previously delivered by such Non-US
Lender. Each Non-US lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the US taxing authorities for such purpose) or if such certificate or
form becomes incorrect or invalid. The Borrower shall not be required to
indemnify any Non-US Lender, or to pay any additional amounts to any Non-US
Lender, in respect of United States federal withholding tax pursuant to Section
9.7(a) or (b) to the extent that the obligation to withhold amounts with respect
to the United States federal withholding tax existed on the date such Non-US
Lender became a party to this Agreement or, with respect to payments to a New
Lending Office, the date such Non-US Lender designated such New Lending Office
with respect to a Loan.
(d) For any period with respect to which a Lender has failed to provide
the Borrower with the appropriate form pursuant to Section 9.7(c) (unless such
failure is due to a change in treaty, law or regulation occurring subsequent to
the date on which a form originally was required to be provided), such Lender
shall not be entitled to increased amounts or indemnification under Section
9.7(a) or (b) with respect to Section 9.7 Taxes imposed by the United States;
provided, however, that should a Lender, which is otherwise exempt from
withholding tax, become subject to Section 9.7 Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender shall reasonably request (at such Lender's expense) to assist such Lender
to recover such Section 9.7 Taxes.
(e) If the Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 9.7, then such Lender will change
the jurisdiction of its Applicable Lending Office so as to eliminate or reduce
any such additional payment which may thereafter accrue if such change, in the
judgment of such Lender, is not otherwise disadvantageous to such Lender.
(f) If any Lender or the Administrative Agent, as applicable, receives
a refund of or credit for a Tax for which a payment has been made by the
Borrower pursuant to this Section 9.7 which refund or credit in the good faith
judgment of such Lender or the Administrative Agent, as the case may be, is
attributable to such payment made by the Borrower, then the Lender or the
Administrative Agent, as the case may be, shall reimburse the Borrower for such
amount as the Lender or the Administrative Agent, as the case may be, determines
to be the proportion of the refund or credit as will leave it, after such
reimbursement, in no better or worse position than it would have been if the
payment had not been required. Each Lender and the Administrative Agent, as the
case may be, shall claim any refund or credit that it determines is available to
it, unless it concludes in its reasonable discretion that it would be adversely
affected by making such a claim.
(g) Each Lender that is a partnership created or organized in or under
the laws of the United States of America or any state or political subdivision
thereof (a "U.S. Partnership Lender") shall deliver to the Borrower and the
Administrative Agent two copies of US Internal Revenue Service From W-9,
properly completed and duly executed by such US Partnership Lender, claiming
complete exemption from backup withholding. Such forms shall be delivered by
each U.S. Partnership Lender on or before the date it becomes a party to this
Agreement and promptly upon the obsolescence or invalidity of such forms. Each
U.S. Partnership Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower or any other form of certificate adopted
by the US taxing authorities for such purpose) or if such certificate or form
becomes incorrect or invalid.
9.8 Application of Payments
All payments made by or on behalf of the Borrower to the Administrative
Agent for the account of the Lenders pursuant to this Agreement shall in each
instance be applied by the Administrative Agent in the following order:
9.8.1 to amounts due hereunder other than those amounts described in
Sections 9.8.2, 9.8.3 and 9.8.4 hereof;
9.8.2 to amounts due pursuant to Article 5 and Section 7.9.1;
9.8.3 to repayment of amounts due in respect of the Loan; and
9.8.4 to repayment of amounts due in respect of Bid Loans and Money
Market Loans;
provided that after acceleration pursuant to Section 12.2, payments shall be
applied as the Lenders, in their discretion, may from time to time determine,
provided that payments on the Loan, the Bid Loans and the Money Market Loans
shall be made on a pro rata basis after acceleration.
9.9 Expenses and Indemnity
9.9.1 The Borrower shall supply all statements, reports, certificates,
opinions, appraisals and other documents or information required to be furnished
to the Lenders or the Administrative Agent pursuant to this Agreement without
cost to any Lender or to the Administrative Agent.
9.9.2 The Borrower shall reimburse and indemnify the Administrative
Agent (for itself and on behalf of the Lenders) and the other Agents, on demand,
all of the legal fees and disbursements (and tax on goods and services in
respect thereof) of Arrangers' Counsel and costs and other out-of-pocket
expenses (and tax on goods and services in respect thereof) reasonably incurred
from time to time in connection with (i) the due diligence, negotiation,
preparation and execution of this Agreement and any other documents referred to
herein or contemplated hereby, (ii) the negotiation, preparation and execution
of all waivers, amendments and variations in relation to this Agreement and any
other documents referred to herein or contemplated hereby, (iii) the operation
and interpretation of this Agreement and any agreement among the Lenders and the
Administrative Agent concerning their respective rights, remedies, duties and
responsibilities, and (iv) the syndication or arrangement of the Credit and
publicity, advertising and signing in connection with the Credit. In addition,
the Borrower agrees to pay on demand all of the legal fees of the Administrative
Agent and each of the Lenders and disbursements and costs and expenses (and tax
on goods and services in respect thereof) reasonably incurred in connection with
the enforcement of, or the preservation of any rights under, this Agreement and
the preservation, enforcement and realization of any other documents referred to
herein or contemplated hereby.
In addition, the Borrower shall pay or indemnify the Administrative Agent and
the Lenders against any and all stamp, registration and similar taxes which may
be payable in connection with the entry into, the performance of and the
enforcement of this Agreement.
9.9.3 Without prejudice to the rights of the Lenders under the
provisions of Section 5.4, the Borrower agrees to indemnify each Lender against
any loss or expense which it may sustain or incur in obtaining or redeploying
deposits as a result of the failure by the Borrower to pay when due any
principal of the Loan or a Bid Loan or a Money Market Loan or for any reason to
borrow in accordance with a Notice of Borrowing or a Notice of Bid Borrowing or
other similar notice given by the Borrower to the Administrative Agent, to the
extent that any such loss or expense is not recovered pursuant to any other
provisions hereof. A certificate of a Lender or the Administrative Agent setting
forth the basis for the determination of the interest due on overdue principal
or interest and of the amounts necessary to indemnify such Lender in respect of
such loss or expense, submitted to the Borrower, shall be conclusive and binding
for all purposes except in case of manifest error.
9.9.4 Notwithstanding any other provision of this Agreement, if for any
reason, including the acceleration of the maturity of the Loan, the Borrower
prepays, repays or converts all or any portion of the Libor Loan on a day other
than the last day of the then current Interest Period applicable to the Libor
Loan or a Libor Loan Portion, or if the Borrower, having given a Notice of
Borrowing requesting a Libor Advance, fails for any reason to fulfill on or
before the Drawdown Date for such Borrowing the applicable conditions set forth
in Article 10, the Borrower shall on demand pay to each Lender the amount
required to indemnify such Lender for any loss, cost or expense incurred by such
Lender as a result of such payment or conversion or failure to fulfil such
conditions including, without limitation, any loss or expense incurred in
liquidating or in maintaining or redeploying deposits or other funds obtained by
such Lender to fund or maintain the Libor Loan or such Libor Loan Portion. A
certificate of a Lender setting out the basis of the determination of the amount
necessary to indemnify it shall, in the absence of manifest error, be conclusive
and binding for all purposes.
9.9.5 The Borrower agrees to indemnify and hold the Administrative
Agent and each of the Lenders harmless from and against any and all reasonable
claims, damages, losses, liabilities and expenses incurred, suffered or
sustained by the Administrative Agent or any of the Lenders by reason of,
relating to, arising out of or resulting from the Credit, the entering into,
carrying out or performance of this Agreement or any matter or document
contemplated herein by the Administrative Agent or a Lender, other than, in
respect of the Administrative Agent or a Lender, any such claim which arises as
a result of the gross negligence or wilful misconduct of the Administrative
Agent or such Lender.
9.10 Non-Receipt by Administrative Agent
Where a sum is to be paid hereunder to the Administrative Agent for the
account of another party hereto, the Administrative Agent shall not be obliged
to make the same available to that other party hereto until it has been able to
establish that it has actually received such sum, but if it does pay out a sum
and it proves to be the case that it had not actually received the sum it paid
out, then the party hereto to whom such sum was so made available shall on
request ensure that the amount so made available is refunded to the
Administrative Agent, and shall on demand indemnify the Administrative Agent
against any cost or loss it may have suffered or incurred by reason of its
having paid out such sum prior to its having received such sum.
9.11 Indemnity by the Borrower
The Borrower hereby indemnifies and holds the Lenders, the Agents and
their respective shareholders (provided such shareholders directly or indirectly
control any one of them), directors, partners (solely in the case of any Lender
or Agent that is a general or limited partnership), agents, officers,
Subsidiaries and affiliates (each an "Indemnified Party") harmless from and
against any and all damages, losses, settlement payments, obligations,
liabilities, claims, actions or causes of action, and costs and expenses
(collectively, "Indemnified Liabilities") incurred, suffered, sustained or
required to be paid by an Indemnified Party by reason of, relating to, arising
out of or resulting from any one or more of the following:
(a) the Release or the threat of a Release of any Contaminant in
violation of Environmental Laws from, or the presence of any
Contaminant affecting, the property of the Borrower or any Subsidiary
of the Borrower (the "Property") in violation of Environmental Laws,
whether or not the same originates or emanates from any such Property
or any contiguous real property, including any loss of value of any
such Property as a result of any of the foregoing;
(b) (i) any costs of removal or remedial action incurred by any
federal, provincial, state, municipal, local or other government, (ii)
any costs incurred by any other Person or damages from injury to,
destruction of, or loss of natural resources, including costs of
assessing such injury, destruction or loss incurred in relation with
the Property, or (iii) the operators and activities of the Company or
any Subsidiary of the Company as a result of the violation of
Environmental Laws by the Company or any Subsidiary of the Company;
(c) liability for personal injury or property damage arising under any
statutory or common or civil law tort or delict theory, including,
without limitation, damages assessed for the maintenance of a public or
private nuisance or for the carrying on of an Environmental Activity
at, near, or with respect to the Property;
(d) any investigative, administrative or judicial proceeding commenced
or threatened by any Person, whether or not any such Indemnified Party
shall be designated as a party or a potential party thereto, and any
fees or expenses incurred by the Indemnified Parties in enforcing this
indemnity, and all Indemnified Liabilities, whether based on any
federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or
regulations), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any
such Indemnified Party, in any manner relating to or arising out of
this Agreement, the Intercreditor Agreement or the Related Agreements
or the transactions contemplated hereby or thereby (including the
Lenders' agreement to make the Loan hereunder or the use or intended
use of the proceeds thereof or the issuance of Letters of Credit
hereunder or the use or intended use of any thereof), or any
enforcement of this Agreement or the Intercreditor Agreement or any of
the agreements contemplated hereby (including any enforcement of the
Guaranty), (ii) the statements contained in the commitment letter
delivered by any Lender to the Borrower with respect thereto; and
(e) any other environmental matter affecting the Property or the
operations and activities of the Company or any Subsidiary of the
Company within the jurisdiction any federal environmental agency, or
any provincial, municipal or local environmental agency;
other than, in respect to an Indemnified Party, any such claims which shall
arise or be incurred as a result of the gross negligence or wilful misconduct of
such Indemnified Party. In litigation or the preparation therefor, each
Indemnified Party shall be entitled to select its own counsel, which shall be
subject to approval by the Borrower, acting reasonably, and, in addition to such
indemnity, the Borrower shall pay promptly the reasonable fees an expenses of
such counsel. Each Indemnified Party shall keep the Borrower advised on a
regular basis in regard to any such litigation or the preparation therefor and
no settlement shall be made in connection therewith unless the Borrower have
been previously advised of the settlement and have had a chance to make
representations to the Indemnified Party in respect thereof. This
indemnification obligation shall survive the execution hereof and the
termination of the Commitment of any Lender to make Advances hereunder.
9.12 Survival of Indemnification Obligations
Without prejudice to the survival or termination of any other agreement
of the Borrower under this Agreement, the obligations of the Borrower under
Sections 7.14.3, 8.4, 9.7, 9.9 and 9.11 shall survive the termination of the
Total Commitment and the repayment in full of the Loan, the Bid Loan and any
Money Market Loans.
ARTICLE 10
CONDITIONS OF LENDING
10.1 Conditions Precedent to the Closing
The Closing Date shall occur on the date of fulfillment of the
following conditions to the satisfaction of the Arrangers and Arrangers'
Counsel:
10.1.1 Loan Party and Merger Sub Documents. On or prior to 10:00 a.m.
(New York time) on the Closing Date, the Administrative Agent shall have
received from the Loan Parties, in sufficient quantities to provide two copies
to each Lender and to the Administrative Agent, the following, each dated as of
a date satisfactory to the Arrangers and in form and substance satisfactory to
the Arrangers and Arrangers' Counsel:
(i) this Agreement duly executed by the Loan Parties, the Lenders, and
the Agents;
(ii) certified copies of the charter and by-laws of each of the Loan
Parties and Merger Sub;
(iii) copies of all documents and resolutions evidencing necessary
corporate action of the Loan Parties and Merger Sub, approving and
authorizing the execution, delivery and performance of this Agreement
and the Related Agreements to which such Loan Parties and Merger Sub
are a party, and approving and authorizing the consummation of the
Tender Offer and the Merger (in the case of Company and Merger Sub) in
the manner contemplated by the Tender Offer Materials, and approving
and authorizing the manner in which and by whom the foregoing documents
are to be executed and delivered, certified as of the Closing Date by
the corporate secretary or an assistant secretary of such Persons as
being in full force and effect without modification or amendment;
(iv) a certificate of status, compliance, good standing or like
certificate with respect to each of the Loan Parties and Merger Sub
issued by the appropriate government officials of the jurisdiction of
its incorporation;
(v) certified copies of any and all necessary governmental, regulatory
and other third party authorizations and approvals (including any
exchange control approvals) required to be obtained on or prior to the
Closing Date with respect to this Agreement;
(vi) a certificate of the Secretary, Associate Secretary or
Assistant-Secretary of each of the Loan Parties and Merger Sub
certifying the names and true signature of the officers of the Loan
Parties and Merger Sub authorized to sign this Agreement and the
Related Agreements to which such Loan Parties and Merger Sub are a
party, and any other documents or certificates to be delivered pursuant
to this Agreement;
(vii) a certificate of the treasurer or other senior officer of the
Borrower to the effect that, to the best of his knowledge after
reasonable inquiry, all representations and warranties of each of the
Loan Parties set forth in Article 2 hereof are true in all material
respects as of the Closing Date;
(viii) a favorable opinion of the Chief Legal Officer and Corporate
Secretary of the Company, in substantially the form of Schedule
10.1.1-A annexed hereto; a favorable opinion of Davis Polk & Wardwell,
U.S. counsel for the Loan Parties, in substantially the form of
Schedule 10.1.1-B annexed hereto; and a favorable opinion of Hopkins &
Sutter, legal counsel to the Guarantors, substantially the form of
Schedule 10.1.1-C annexed hereto, in each case addressed to the
Arrangers and each Lender; and
(ix) a favorable opinion of Arrangers' Counsel, addressed to the
Arrangers and to each Lender in substantially the form of Schedule
10.1.1-D annexed hereto.
10.1.2 Capital Structure and Ownership. The capital structure and
ownership of the Company and its Subsidiaries, before and immediately after
giving effect to the Tender Offer, shall be as set forth on Schedule 10.1.2
annexed hereto. The Borrower shall have also set forth on Schedule 10.1.2 the
proposed capital structure and ownership of the Company and its Subsidiaries
after giving effect to the Merger.
10.1.3 Target Documents. On or before the Closing Date, the Borrower
shall deliver to Lenders (or to Administrative Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its counsel)
the following with respect to Target, each dated the Closing Date:
10.1.3.1 Certified copies of the Certificate or
Articles of Incorporation of Target as in effect on the Closing Date,
together with a good standing certificate from the Secretary of State
of its jurisdiction of incorporation and each other state in which
Target is qualified as a foreign corporation to do business and, to the
extent generally available, a certificate or other evidence of good
standing as to payment of any applicable franchise or similar taxes
from the appropriate taxing authority of each of such jurisdictions,
each dated a recent date prior to the Closing Date; and
10.1.3.2 Copies of the by-laws of Target as in effect
on the Closing Date.
10.1.4 Tender Offer Materials and Related Agreements.
10.1.4.1 Tender Offer Materials. The Arrangers shall
have received a copy of all Tender Offer Materials and other documents
in connection therewith filed with the Securities and Exchange
Commission. The Tender Offer Materials shall not have been amended or
otherwise modified, and no conditions to the Tender Offer shall have
been modified or waived in any respect, if such amendment, modification
or waiver would (w) increase the consideration payable per share of
Target Common Stock, (x) increase the aggregate amount of cash
consideration to be paid by Merger Sub in connection with the Tender
Offer and the Merger, (y) decrease the number of shares constituting
Minimum Shares set forth in the condition with respect to the minimum
number of shares to be validly tendered, or (z) otherwise be materially
adverse to the Lenders, without in each case obtaining the prior
written consent of Arrangers to such amendment, modification or waiver.
10.1.4.2 Related Agreements. The Arrangers shall have
received a fully executed or conformed copy of each Related Agreement
and any documents executed in connection therewith. Each Related
Agreement shall be in full force and effect and no provision thereof
shall have been amended, modified or waived in any respect if such
amendment, modification or waiver would (w) increase the consideration
payable per share of Target Common Stock, (x) increase the aggregate
amount of cash consideration to be paid by Merger Sub in connection
with the Tender Offer and the Merger, (y) decrease the number of shares
constituting Minimum Shares set forth in the condition with respect to
the minimum number of shares to be validly tendered, or (z) otherwise
be materially adverse to the Lenders, without in each case obtaining
the prior written consent of Arrangers to such amendment, modification
or waiver.
10.1.4.3 Officers' Certificates. Administrative Agent
shall have received Officers' Certificates from the Borrower and Merger
Sub to the effect that (a) the Merger Agreement is in full force and
effect and no provision thereof (except as permitted hereunder) has
been modified or waived in any respect without the consent of the
Arrangers and (b) each such Person has complied with all agreements and
conditions contained in the Merger Agreement and any agreements or
documents referred to therein required to be performed or complied with
by each of them on or before the Closing Date.
10.1.4.4 Canadian Credit Documents. The Arrangers
shall have received a fully executed or conformed copy of the Canadian
Credit Documents, including the Canadian Credit Agreement (and all
exhibits and schedules thereto) and any promissory notes evidencing the
Canadian Term Loans and the Canadian Revolving Loans, and the
Intercreditor Agreement, each of which shall be in form and substance
reasonably satisfactory to the Arrangers, and each such agreement and
promissory note shall be in full force and effect.
10.1.5 Environmental Reports. The Arrangers shall have received reports
and other information, in form, scope and substance satisfactory to the
Arrangers, regarding environmental matters relating to the Borrower, the
Guarantors and Target.
10.1.6 Necessary Governmental Authorizations and Consents; Expiration
of Waiting Periods, Etc. The Borrower shall have obtained all Governmental
Authorizations and all material consents of other Persons, in each case that are
necessary or advisable in connection with the consummation by the Company and
Merger Sub of the Tender Offer and the Merger (other than final approval by the
STB of the Acquisition by the Company of control of Target), the other
transactions contemplated by this Agreement and the Related Agreements, and each
of the foregoing shall be in full force and effect, in each case other than
those the failure to obtain or maintain which, either individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
Without limiting the generality of the foregoing, the Arrangers have received
evidence satisfactory to them that Company shall have received an informal
nonbinding opinion of the STB staff to the effect that the Voting Trust and the
deposit of such shares into the Voting Trust will effectively insulate the
Company from the violation of Subtitle IV of Title 49 of the United States Code
and the policy of the STB that would result if the Company were to acquire
without authorization a sufficient interest in the carrier Subsidiaries of
Target as otherwise to result in control, and the Company shall have filed with
the STB a copy of the Voting Trust Agreement and a copy of the Schedule 14D
filed in connection with the Tender Offer. All applicable waiting periods shall
have expired without any action being taken or, to the knowledge of the
Borrower, threatened by any competent authority which would materially restrain,
prevent or otherwise impose material adverse conditions on the Tender Offer or
the Merger or the financing thereof.
10.1.7 Financial Statements; Pro Forma Balance Sheet; Projections. On
or before the Closing Date, Lenders shall have received from the Company:
(i) unaudited financial statements (dated January 21, 1998) of the
Company and its Consolidated Subsidiaries for the fiscal year ended
December 31, 1997, consisting of a consolidated balance sheet and the
related consolidated statements of income, shareholders' equity and
changes in financial position for such fiscal years, all in reasonable
detail and certified by the treasurer of the Company that they fairly
present the consolidated financial condition of the Company and its
Consolidated Subsidiaries as at such date and the results of the
operations of the Company and its Consolidated Subsidiaries for the
period ended on such date, subject to changes resulting from audit and
all in accordance with generally accepted accounting principles
consistently applied;
(ii) unaudited financial statements of Target and its Subsidiaries for
the fiscal year ended December 31, 1997, consisting of a consolidated
balance sheet and the related consolidated statements of income,
stockholders' equity and cash flows for the period ending on such date;
(iii) the Pro Forma Closing Balance Sheet; and
(iv) a consolidated plan and financial forecast for Company and its
Subsidiaries for the four-fiscal year period ending on December 31,
2001 (the "Financial Projections" for such fiscal years), including,
without limitation, a forecasted consolidated balance sheet and
forecasted consolidated statements of income and cash flows of the
Company and its Subsidiaries for each such fiscal year, together with
an explanation of the assumptions on which such forecasts are based.
10.1.8 No Material Adverse Effect. Since September 30, 1997, there
shall have occurred (i) no material adverse change in or effect on, either
individually or in the aggregate, the condition, operations, properties,
business or results of operations of the Company and its Consolidated
Subsidiaries taken as a whole; and (ii) no material adverse change in or effect
on, either individually or in the aggregate, the condition, operations,
properties, business or results of operations of Target and its Subsidiaries
taken as a whole. Since September 30, 1997, no information submitted by the
Borrower to the Arrangers shall have proved to be inaccurate, incomplete, or
misleading in any material respect. Since February 9, 1998, no information,
condition or event shall have occurred or come to the attention of the Lenders
that (i) relates to the Company or Target or their respective Subsidiaries, (ii)
is inconsistent with the written information previously disclosed to the
Arrangers in connection with this Agreement and (iii) would reasonably be
expected to result in a material adverse change in or effect on, either
individually or in the aggregate, the condition, operations, properties,
business or results of operations of the Company, Target and their respective
Subsidiaries, taken as a whole, which change or effect adversely affects or
could reasonably be expected to adversely affect the ability of the Borrower and
its Consolidated Subsidiaries, taken as a whole, to perform any of their
obligations hereunder.
10.1.9 Underwriting Fees. The Company shall have paid to the Arrangers
the fees payable on the Closing Date referred to in Section 5.7.
10.1.10 Administrative Agent's Fee. The Company shall have paid to the
Administrative Agent the fee payable on the Closing Date referred to in Section
5.9.
10.1.11 Fees and Expenses of Agents. The Company shall have paid to
Agents all costs, fees and expenses payable under Section 9.9.2 to the extent
incurred before the Closing Date and presented to the Company for payment at
least one Business Day before the Closing Date.
10.2 Conditions Precedent to the Term Loans and other Advances on Initial
Funding Date
The Initial Funding Date shall occur on the date of fulfillment of the
following conditions (in addition to the conditions set forth in Sections 10.1
and 10.3) to the satisfaction of the Arrangers and Arrangers' Counsel:
10.2.1 Proceeds of Debt and Equity Capitalization of Merger Sub.
10.2.1.1 Use of Proceeds of Term Loan by Borrower.
The Borrower shall have provided evidence satisfactory to the Arrangers
that all proceeds of the Term Loans and the Revolving Loans, if any,
made on the Initial Funding Date, together with certain cash on hand of
the Borrower and borrowings by the Company made on the Initial Funding
Date under the Canadian Credit Agreement, shall be applied by the
Borrower to the refinancing of Indebtedness under the Existing Credit
Agreements and/or to the payment of Transaction Costs and contributed
to the capital of Merger Sub as common equity to be applied to the
purchase of the Tendered Target Shares.
10.2.1.2 Use of Proceeds by Merger Sub. The Borrower
shall have provided evidence satisfactory to the Arrangers that all
proceeds of the capitalization of Merger Sub described in the
immediately preceding Section 10.2.1.1 will be applied on the Initial
Funding Date to the purchase of the Tendered Target Shares.
10.2.2 Tendered Target Shares. The Company shall have delivered to the
Arrangers (a) a certificate of the Depositary certifying to the number of
Tendered Target Shares, and (b) an Officers' Certificate of the Company
certifying that the Tendered Target Shares to be purchased with the proceeds of
the Term Loans, the Revolving Loans, the Canadian Term Loans and the Canadian
Revolving Loans to be made on the Initial Date and cash on hand of the Company
represent, in the aggregate, not less than the Minimum Shares and not more than
46,051,761 shares of Target Common Stock.
10.2.3 Maximum Consideration for Tendered Target Shares. Each of the
Arrangers shall have received evidence satisfactory to it that the aggregate
consideration to be paid by Merger Sub on the Initial Funding Date to purchase
the Tendered Target Shares, does not exceed US$1,796,018,679.00. The Tender
Offer shall have been consummated in all respects in accordance with the Tender
Offer Materials.
10.2.4 Repayment of Existing Credit Agreements and Termination of
Related Liens. The Company and its Subsidiaries shall have, either prior to or
contemporaneously with the application of the proceeds of the Term Loans and the
Revolving Loans, (a) repaid in full all Indebtedness outstanding under the
Existing Credit Agreements, (b) terminated any commitments to lend or make other
extensions of credit thereunder and (c) taken all action necessary to terminate
or release any Liens securing Indebtedness or other obligations of the
Company and its Subsidiaries thereunder, in each case on terms satisfactory to
the Administrative Agent.
10.2.5 Canadian Credit Agreement. The conditions precedent to the
effectiveness of the obligations to extend the initial advances under the
Canadian Credit Agreement shall have been satisfied or waived.
10.3 Conditions Precedent to each Advance
The obligation of each Lender to make each Advance (including the
initial Advance) and each Bid Advance (including the initial Bid Advance) and to
issue each Letter of Credit (including the first Letter of Credit) hereunder is
subject to and conditional upon the prior fulfillment of the following
conditions:
10.3.1 The Administrative Agent shall have received, as applicable, a
Notice of Borrowing prior to the Drawdown Date as required in Section 3.3 or a
Notice of Conversion prior to the Conversion Date as required in Section 4.3 or
a Notice of Bid Borrowing prior to the date of the proposed Bid Borrowing as
required by Section 3.4.1 or an application as required in Section 7.7.1 or
7.7.2;
10.3.2 On the date of each such Advance or such Bid Advance or such
Letter of Credit, as applicable, the following statements shall be true (and the
acceptance by the Borrower of the proceeds of such Advance or such Bid Advance
or the issuance of such Letter of Credit, as applicable, shall be deemed to
constitute a representation and warranty by the Borrower and each of the
Guarantors that on the date of such Advance or such Bid Advance or such Letter
of Credit, as applicable, such statements are true):
(i) the representations and warranties contained in Article 2, except
for Section 2.1.3 and Sections 2.1.14, 2.1.21, 2.1.22, 2.1.26 and
2.1.27 and except that clause (i) of Section 2.1.7 shall be read as if
it referred to the most recent financial statements of the Company
delivered by the Company to the Administrative Agent pursuant to
Section 11.1.2 and the date in Section 2.1.17 shall be the last day of
the most recent fiscal year for which the Company has furnished its
audited annual consolidated statements to the Administrative Agent
pursuant to Section 11.1.2, are true and correct in all material
respects on and as of the date of such Advance or such Bid Advance or
such Letter of Credit, as applicable, as though made on and as of such
date;
(ii) the making of such Advance or such Bid Advance or the issuance of
such Letter of Credit, as applicable, requested on such Drawdown Date
shall not violate any law including, without limitation, Regulation G,
Regulation T, Regulation U or Regulation X of the Board of Governors of
the Federal Reserve System;
(iii) no event has occurred and is continuing, or would result from
such Advance or such Bid Advance or such Letter of Credit, as
applicable, which constitutes an Event of Default or would constitute
an Event of Default but for the requirement that notice be given or
time elapse or both; and
(iv) in the event that a Money Market Loan will be outstanding
immediately after giving effect to the making of such Advance or such
Bid Advance or such Letter of Credit, as applicable, the Borrower shall
have complied with the provisions of Section 3.5.11.
10.4 Waiver
The terms and conditions of Sections 10.1, 10.2 and 10.3 are inserted
for the sole benefit of the Lenders and may be waived by the Administrative
Agent on instruction from the Majority Lenders in whole or in part, with or
without terms or conditions, in respect of any Advance or Bid Advance or Letter
of Credit, as applicable, without prejudicing the right of the Lenders to assert
these terms and conditions in whole or in part in respect of any other Advance
or Bid Advance or Letter of Credit, as applicable.
10.5 Waiver by Lenders under Existing Credit Agreements.
In order to facilitate the satisfaction of the condition set forth in
Section 10.2.4 above, each of the parties hereto which is a party to either
Existing Credit Agreement waives (i) the requirement in Section 4.7 thereof that
a notice terminating the commitments of the lenders thereunder must be given at
least five (5) Business Days (as defined in the relevant Existing Credit
Agreement) prior to such termination, (ii) to the extent necessary, the
requirement in Section 3.5 thereof that a notice of prepayment of any Advance
(as defined in the relevant Existing Credit Agreement) must be given at least
three (3) Business Days prior to such termination and (iii) to the extent
necessary, the prohibition in Section 4.4.4 thereof on the prepayment of any
Libor Loan Portion (as defined in the relevant Existing Credit Agreement) prior
to the last day of the then current Interest Period (as defined in the relevant
Existing Credit Agreement) with respect thereto.
ARTICLE 11
COVENANTS
11.1 Affirmative Covenants
So long as any amount owing hereunder remains unpaid or any Lender has
any Commitment under this Agreement, and unless consent is given in accordance
with Section 15.12, the Borrower and each of the Guarantors, as applicable,
shall:
11.1.1 duly and punctually pay all sums of money due by it under the
terms of this Agreement or otherwise at the times and places and in the manner
provided for by this Agreement or by any other applicable agreement and shall
duly and punctually perform and observe all other obligations on its part to be
performed or observed hereunder or thereunder at the times and in the manner
provided for herein or therein;
11.1.2 furnish to the Administrative Agent in sufficient copies for
distribution to each Lender:
(i) as soon as possible and in any event within five (5) Business Days
after the occurrence of each Event of Default or becoming aware of each
event which, with the giving of notice or lapse of time or both, would
constitute an Event of Default, a statement of the principal financial
officer of the Borrower setting forth details of such Event of Default,
or event, and the action which the Borrower proposes to take with
respect thereto;
(ii) as soon as available and in any event within 75 days after the end
of each first quarter and within 60 days after the end of each of the
second and third quarters of each fiscal year of the Company (A) the
unaudited quarterly consolidated financial statements of the Company
and its Consolidated Subsidiaries as of the end of such quarter
(including balance sheet, statement of income and statement of cash
flows) certified by the principal financial officer or treasurer of the
Company, (B) the unaudited quarterly consolidated financial statements
of Grand Trunk and its consolidated Subsidiaries as of the end of such
quarter (including balance sheet, statement of income and statement of
cash flows) certified by the principal financial officer or treasurer
of Grand Trunk, (C) any reports which the Borrower or the Company are
required to file for such quarter with the Securities and Exchange
Commission or the Quebec Securities Commission, (D) a certificate of
the principal financial officer or treasurer of the Borrower stating
that no Event of Default, or event which, with the giving of notice or
lapse of time or both, would constitute an Event of Default, has
occurred and is continuing or, if an Event of Default or such event has
occurred and is continuing, a statement as to the nature thereof and
the action which the Borrower proposes to take with respect thereto,
(E) a certificate of the principal financial officer or treasurer of
the Borrower confirming, to the best of his knowledge after reasonable
inquiry, compliance with all of the covenants in Article 11 and setting
forth in reasonable detail the computations used by the Borrower in
determining, as of the end of such fiscal quarter, compliance with the
covenants contained in Section 11.2, and (F) an unaudited quarterly
consolidated financial statement of the Target and its Subsidiaries as
of the end of any such quarter (including balance sheet, statement of
income and statement of cash flows) ending on or prior to the STB
Approval Date;
(iii) as soon as available and in any event within 120 days after the
end of each fiscal year of the Company (A) the audited annual
consolidated financial statements of the Company and its Consolidated
Subsidiaries containing comparative consolidated financial statements
for such year (including balance sheet, statement of income and
statement of cash flows) certified by independent chartered accountants
of recognized national standing, (B) the unaudited annual consolidated
financial statements of Grand Trunk and its consolidated Subsidiaries
for such year (including balance sheet, statement of income and
statement of cash flows) certified by the principal financial officer
or treasurer of Grand Trunk, (C) the unaudited annual consolidated
financial statements of each of the Guarantors (other than Grand Trunk)
and their consolidated Subsidiaries, if any, for such year (including
balance sheet, statement of income and statement of cash flows)
certified by the principal financial officer or treasurer of each of
such Guarantors respectively, (D) any reports which the Borrower or the
Company are required to file with the Securities and Exchange
Commission or the Quebec Securities Commission, (E) a certificate of
the principal financial officer or treasurer of the Borrower stating
that no Event of Default, or event which, with the giving of notice or
lapse of time or both, would constitute an Event of Default, has
occurred and is continuing, or if an Event of Default or such an event
has occurred and is continuing, a statement as to the nature thereof
and the action which the Borrower proposes to take with respect
thereto, (F) certificate of the principal financial officer or
treasurer of the Borrower confirming, to the best of his knowledge
after reasonable inquiry, compliance with all of the covenants in
Article 11 and setting forth in reasonable detail the computations used
by the Borrower in determining, as of the end of such fiscal year,
compliance with the covenants contained in Section 11.2, and (G) the
audited annual consolidated financial statements of the Target and its
Subsidiaries containing comparative consolidated financial statements
for any such year (including balance sheet, statement of income and
statement of cash flows) ending on or prior to the STB Approval Date
certified by independent chartered accountants of recognized national
standing; and
(iv) such other information respecting the condition or operations,
financial or otherwise, of the Company or any of its Subsidiaries, as
any Lender, through the Administrative Agent, may from time to time
reasonably request;
11.1.3 as soon as possible, and in any event within five (5) Business
Days after the Company or any of its Subsidiaries has received notice of the
commencement thereof, give notice to the Administrative Agent of any litigation,
proceeding or dispute affecting the Company or any of its Subsidiaries or its
property before any court, tribunal, commission or other administrative agency
which could have a Material Adverse Effect; from time to time, the Company shall
provide all reasonable information requested by the Administrative Agent
concerning the status of any such litigation, proceeding or dispute;
11.1.4 promptly cause to be paid and discharged all lawful and material
Taxes assessed against the Company or any of its Subsidiaries or imposed upon
the income and profits of, or upon any property belonging to, the Company or any
of its Subsidiaries, before the same shall become in default, as well as all
lawful and material claims for labor, materials and supplies which, if unpaid,
might become a Lien other than a Permitted Encumbrance upon such property or any
part thereof, provided, however, that the Company shall not be required to cause
to be paid and discharged any such Tax as long as the amount or validity thereof
shall be contested in good faith by appropriate proceedings and the Company or
such Subsidiary, as the case may be, shall set aside on its books reserves with
respect thereto that the Company and the independent chartered accountants who
are at the time employed to audit the books and accounts of the Company or such
Subsidiary consider adequate;
11.1.5 at all times cause to be carried and maintained types and
amounts of insurance in respect of the Company and its Material Subsidiaries'
material buildings, plants, equipments (other than rolling stock) and other
material property on a replacement cost basis for partial losses and on a
depreciated replacement cost basis for total losses, including, without
limitation, property insurance and public liability insurance, in such amounts,
for such risks, on such terms (including self-insured retention), with such
endorsements and with such insurance companies as are at least comparable to
industry standards for Class I railroads, subject to availability; the Company
represents that it carries, as of the date hereof, C$288,000,000 liability
policies in excess of a C$5,000,000 self-insured retention and C$200,000,000
"all risks" property policies in excess of a C$2,500,000 self-insured retention;
the Company shall deliver in due course to the Administrative Agent certificates
of insurance from the Company's insurers confirming the insurance coverage;
11.1.6 at all times keep, and cause each of its Subsidiaries to keep,
true and complete books and records and accounts in accordance with generally
accepted accounting principles; in respect of Subsidiaries of the Company in the
United States, such generally accepted accounting principles shall be as applied
from time to time in the United States;
11.1.7 permit the Administrative Agent by its representatives and
agents, after reasonable notice, to visit or inspect any of its or its Material
Subsidiaries' properties, including, without limitation, corporate books,
computer files and tapes and financial records, to examine and make copies of
its books of accounts and other financial records and to discuss its affairs,
finances and accounts with, and to be advised as to the same by, their
respective senior officers at such reasonable times during normal business hours
and intervals as the Administrative Agent may designate but subject always to
the security requirements of the Company or its Subsidiaries in effect from time
to time;
11.1.8 at all times cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and the corporate
existence of each of its Material Subsidiaries;
11.1.9 conduct, and cause each of its Material Subsidiaries to conduct,
its business substantially as presently conducted; and keep in full force and
effect its material rights and franchises except where failure to do so could
not have a Material Adverse Effect; provided that nothing in this Section 11.1.9
shall be construed to prohibit the Reorganization or the Merger;
11.1.10 operate, maintain and preserve, and cause each of its Material
Subsidiaries to operate, maintain and preserve, in good repair, working order
and condition (ordinary wear and tear excepted), all its and their material
properties necessary for the proper conduct of its or their business;
11.1.11 within sixty (60) days following the end of each fiscal year
end, provide to the Administrative Agent in sufficient copies for each Lender,
the Company's annual business plan outlining financial forecasts for the then
current fiscal year, such forecasts to include balance sheet, income statement
and statement of cash flows for such fiscal year including planned capital
expenditures and assumptions used in such forecast;
11.1.12 within ten (10) Business Days of any Person becoming a Material
Subsidiary, notify the Administrative Agent that such a Person has become a
Material Subsidiary and furnish the Administrative Agent with all details
thereof such as name, date and jurisdiction of incorporation, names of
shareholders and percentages of ownership, description of businesses and
addresses and shall further cause to be delivered to the Lenders joinder
agreements in form and substance substantially as set out in Schedule 11.1.12
annexed hereto duly executed in favor of the Lenders by each such Material
Subsidiary to the extent permitted by Law, pursuant to which the payment and
performance of all of the Borrower's obligations under this Agreement are
guaranteed (or, in the event that a Material Subsidiary organized pursuant to
the laws of Canada or a province thereof is not permitted by Law to guarantee
the payment and performance of all of the Borrower's obligations under this
Agreement, a joinder agreement in form and substance satisfactory to the
Administrative Agent duly executed in favor of the Lenders by such Material
Subsidiary to the extent permitted by Law, pursuant to which the payment and
performance of all of the obligations of a Guarantor under this Agreement are
guaranteed by such Material Subsidiary), together with a favorable legal opinion
in form and substance satisfactory to the Lenders in respect of such Material
Subsidiary and such guarantee; provided that the Borrower shall not be obligated
to cause Target and its Subsidiaries to deliver such joinder agreements until
ten (10) Business Days after the later of the STB Approval Date and the Merger
Date;
11.1.13 ensure at all times that the consolidated Tangible Net Worth of
the Company and its Material Subsidiaries represents at least 90% of the
consolidated Tangible Net Worth of the Company and its Consolidated
Subsidiaries;
11.1.14 advise the Administrative Agent, as soon as it becomes aware of
(i) any change or effect which has or could have a Material Adverse Effect or
(ii) any breach of a representation or warranty in Article 2 which would occur
during the period from the STB Approval Date to the date 90 days thereafter if
the Target and its Subsidiaries were deemed "Subsidiaries" of the Borrower
during such period, such advice to be accompanied with all reasonable details
thereof;
11.1.15 deliver to the Administrative Agent if and when the Borrower or
any ERISA Affiliate of the Borrower (i) gives or is required to give notice to
the PBGC of any Reportable Event with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows that
the plan administrator of any Plan has given or is required to give notice of
any such Reportable Event, a copy of the notice of such Reportable Event given
or required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer, any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Code, a copy of such application; (v) gives notice of intent
to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to
make any payment or contribution to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the imposition of a Lien or
the posting of a bond or other security, a certificate of the chief financial
officer or the treasurer of the Borrower setting forth details as to such
occurrence and action, if any, which the Borrower or applicable ERISA Affiliate
of the Borrower is required or proposes to take; provided that no such
certificate shall be required unless the aggregate unpaid actual or potential
liability of the Company and the ERISA Affiliates involved in all events
referred to in clauses (ii) through (vii) above of which the said officer of the
Borrower has obtained knowledge and has not previously reported under this
paragraph, exceeds C$50,000,000; and
11.1.16 no later than five (5) Business Days prior to the proposed date
on which a Guarantor shall become a Borrower hereunder, notify the
Administrative Agent that such Guarantor intends to become a Borrower on such
date. Such Guarantor shall cause to be delivered to the Lenders on such date a
joinder agreement in form and substance substantially as set out in Schedule
11.1.16 annexed hereto duly executed in favor of the Lenders by such Guarantor
and each other Borrower and Guarantor hereunder to the extent permitted by Law,
pursuant to which (i) such Guarantor shall agree to be bound by this Agreement
as a borrower and to assume and perform its obligations as a borrower hereunder
as if it were the Borrower hereunder on the date hereof, except that such
Guarantor's obligations as a Borrower shall be limited to such Guarantor's
Borrowings hereunder made on and after such date and (ii) each Guarantor
(including Grand Trunk Corporation) shall guarantee the payment and performance
of all of such new Guarantor's obligations as Borrower under this Agreement (or,
in the event that any such Guarantor organized pursuant to the laws of Canada or
a province thereof is not permitted by Law to guarantee the payment and
performance of all of such Borrower's obligations under this Agreement, such
Guarantor shall execute a joinder agreement in form and substance satisfactory
to the Administrative Agent duly executed in favor of the Lenders by such
Guarantor to the extent permitted by Law, pursuant to which such Guarantor shall
guarantee the payment and performance of all of the obligations of another
Guarantor under this Agreement), together with a favorable legal opinion in form
and substance reasonably satisfactory to the Administrative Agent in respect of
such Guarantor as a Borrower and such guarantees.
11.2 Financial Covenants
So long as any amount owing hereunder remains unpaid or any Lender has
any Commitment under this Agreement, and unless consent is given in accordance
with Section 15.12, the Company shall:
11.2.1 maintain at all times during each of its fiscal quarters ending
after April 1, 1998 a consolidated Tangible Net Worth of at least an amount
equal to the sum of C$3.6 billion plus 50% of all positive Net Profits, if any,
accruing on a cumulative basis from April 1, 1998 plus 50% of the net proceeds
of equity issues after the Closing Date (including equity issuances in
connection with the Merger), if any, accruing on a cumulative basis from the
Closing Date, in all cases based upon the most recent financial statements of
the Company and its Consolidated Subsidiaries;
11.2.2 ensure that at all times during each fiscal quarter ending
during any of the periods set forth below, the sum of (x) Total Debt plus (y)
the obligations of the Company and its Subsidiaries with respect to any
securitization or monetization financing, as a percentage of Total
Capitalization, does not exceed the correlative percentage indicated below, in
all cases based upon the then most recent financial statements of the Company
and its Consolidated Subsidiaries:
============================================================================
Maximum Total Debt to
Period Total Capitalization
- ----------------------------------------------------------------------------
Closing Date - 12/31/98 60%
- ----------------------------------------------------------------------------
01/01/99 - 12/31/99 58%
- ----------------------------------------------------------------------------
01/01/00 and thereafter 55%
============================================================================
11.2.3 maintain as at the end of each fiscal quarter ending during any
of the periods set forth below, a Fixed Charge Coverage Ratio (calculated (a)
for each such fiscal quarter ending during the period from April 1, 1998 to
September 30, 1999, on a cumulative basis for the period from and including
April 1, 1998 to and including the last day of the fiscal quarter then most
recently ended, and (b) for each such fiscal quarter ending after September 30,
1999, on a rolling six-fiscal quarter basis) of not less than the correlative
ratio indicated below, in all cases based upon the then most recent financial
statements of the Company and its Consolidated Subsidiaries:
============================================================================
Minimum Fixed Charge
Period Coverage Ratio
- ----------------------------------------------------------------------------
04/01/98 - 12/31/98 1.85:1.0
- ----------------------------------------------------------------------------
01/1/99 and thereafter 2.00:1.0
============================================================================
; provided, however, the covenant in this Section 11.2.3 shall not apply at any
time when the Public Debt Rating of the Company by S&P is BBB+ or higher or by
Moody's is Baal or higher.
Calculations under this Section 11.2 of Tangible Net Worth and Total
Capitalization for any date shall be made on a pro forma basis assuming, in each
case, that the Merger was consummated on the Closing Date and that the equity to
be issued under the Merger Agreement in connection with the Merger has been
issued on such date, and that no shares of capital stock of Target are subject
to the Voting Trust. Calculations under this Section 11.2 of the Fixed Charge
Coverage Ratio (and related definitions) for any period shall be made on a pro
forma basis assuming, in each case, that the Merger was consummated on the first
day of such period and that no shares of capital stock of Target are subject to
the Voting Trust at any time during such period. Notwithstanding the foregoing,
if the Merger Agreement has terminated prior to the consummation of the Merger
or the Merger is otherwise abandoned and no Event of Default shall occur as a
result thereof, then the foregoing calculations shall not be made on a pro forma
basis and shall be based on the most recent financial statements of the Company
and its Consolidated Subsidiaries delivered to the Lenders hereunder.
11.3 Merger and Voting Trust Covenants
So long as any amount owing hereunder remains unpaid or any Lender has
any Commitment under this Agreement, and unless consent is given in accordance
with Section 15.12, the Borrower shall:
11.3.1 until consummation of the Merger, cause Merger Sub to engage in
only those activities that are necessary or advisable to effect the Tender Offer
upon the terms set forth in the Tender Offer Materials, to effect the Merger and
to effect the transactions contemplated by this Agreement and the Merger
Agreement;
11.3.2 comply with and cause Merger Sub to comply in all material
respects with all covenants set forth in the Merger Agreement applicable prior
to the consummation of the Merger;
11.3.3 comply with and cause Merger Sub to comply in all material
respects with all covenants set forth in the Voting Trust Agreement applicable
prior to the STB Approval Date; and
11.3.4 use best efforts to cause the Merger to be consummated in
accordance with the terms and conditions of the Merger Agreement and the Tender
Offer Materials as soon as practicable and in accordance with applicable
securities laws and regulations and, in any event, no later than the first
anniversary of the Initial Funding Date.
11.4 Negative Covenants
So long as any amount owing hereunder remains unpaid or any Lender has
any Commitment under this Agreement and, unless consent is given in accordance
with Section 15.13, neither Company nor the Borrower shall:
11.4.1 except as permitted by clauses (i) through (x) of Section
11.4.2, enter into, or permit any of its Subsidiaries to enter into, any
transaction (whether by way of reconstruction, reorganization, consolidation,
amalgamation, arrangement, merger, transfer, sale, lease or otherwise) whereby
all or substantially all of its business, property and assets would become the
property of any other Person, or in the case of any such amalgamation,
arrangement (if applicable) or merger, of the continuing company resulting
therefrom except that (a) any Wholly-owned Subsidiary may merge, consolidate or
amalgamate with or into the Company or another Wholly-owned Subsidiary, (b) any
Wholly-owned Subsidiary may merge with a third party carrying on a business
similar or in support of the railway business in a transaction in which the only
consideration paid by the Company or such Wholly-owned Subsidiary is common
stock of the Company; (c) a Wholly-owned Subsidiary may be liquidated and its
assets distributed to one or more Wholly-owned Subsidiaries and/or the Company;
(d) the Company or the Borrower may merge or consolidate with any Person
carrying on a business similar or in support of the railway business so long as
(i) in the case of the Company, the Company is the surviving entity and in the
case of the Borrower, the surviving entity (which shall be an entity organized
in the United States) shall have succeeded to the obligations of the Borrower
hereunder and executed such instruments and documents as Administrative Agent
shall deem necessary or advisable to evidence such succession, and (ii) the
consolidated Tangible Net Worth of the Company immediately following such merger
or consolidation is greater than or equal to the consolidated Tangible Net Worth
of the Company immediately prior to such merger or consolidation; (e) Merger Sub
may merge with and into Target in the manner contemplated by the Related
Agreements and the Tender Offer Materials; (f) the Company and CNR Properties
may consummate the Reorganization; (g) the Company and its Subsidiaries may
consummate sales and other dispositions of stock of Target to the extent
required by a United States Governmental Authority; and (h) the Company and its
Subsidiaries may consummate any disposition expressly permitted by Section
11.4.2; provided, however, that in each of said cases (a) through (d), (i)
immediately prior to the consummation of such merger, consolidation,
amalgamation or liquidation, no Event of Default or event which, with the giving
of notice or lapse of time, or both, would constitute an Event of Default, shall
have occurred and be continuing, (ii) no condition or event shall exist in
respect of the Borrower after giving full effect to such merger, consolidation,
amalgamation or liquidation which constitutes or would, with the giving of
notice or lapse of time, or both, constitute an Event of Default, and (iii) all
of the representations and warranties contained in Article 2, except for Section
2.1.3 and Sections 2.1.14, 2.1.21, 2.1.22, 2.1.26 and 2.1.27 and except that
clause (i) of Section 2.1.7 shall be read as if it referred to the most recent
financial statements of the Borrower delivered by the Borrower to the
Administrative Agent pursuant to Section 11.1.2 and the date in Section 2.1.17
shall be the last day of the most recent fiscal year for which the Borrower has
furnished its audited annual consolidated statements to the Administrative Agent
pursuant to Section 11.1.2, shall be true and correct in all material respects
on and as of the date of such merger, consolidation, amalgamation or liquidation
as though made on and as of such date;
11.4.2 sell, exchange, lease, release or abandon or otherwise dispose
of, or permit any of its Subsidiaries to sell, exchange, lease, release or
abandon or otherwise dispose of, any assets to any Person other than:
(i) sales and transfers of assets among the Company and its
Subsidiaries or as between any Subsidiaries at fair market value; sales
of inventory in the ordinary course of business;
(ii) sales or other dispositions of Permitted Investments of the type
described in clauses (a) through (f) of the definition of Permitted
Investments in Section 1.1;
(iii) sales, exchanges, leases, releases, abandonments or other
dispositions of obsolete equipment, scrap or surplus material and
supplies and other properties of the Company and its Subsidiaries which
have no material economic value; any lease and/or rental by the Company
or any of its Subsidiaries of surplus assets temporarily not being used
by the Company or any of its Subsidiaries, provided the Company or such
Subsidiary at all times retains title to such assets;
(iv) sales, exchanges, leases, releases, abandonments or other
dispositions pursuant to the restructuring and network rationalization
as presented in the Company's most recent annual business plan provided
to the Administrative Agent, in any case not to exceed 3,500 miles of
rail lines in the aggregate after the Closing Date, and sales,
exchanges, leases, releases, abandonments or other dispositions of
non-rail real estate assets;
(v) (1) the disposition of Excluded Subsidiaries (including by
liquidation, dissolution, winding up or surrender of charter); and (2)
dispositions pursuant to the Reorganization;
(vi) any bona fide sales, exchanges or other dispositions (including,
without limitation, dispositions by way of merger, amalgamation or
otherwise) at fair market value and provided that fair market value of
all such sales, exchanges or other dispositions does not exceed in the
aggregate in any fiscal year of the Company an amount equal to two
percent (2%) of the Company's consolidated Tangible Net Worth, based
upon the audited financial statements of the Company and its
Consolidated Subsidiaries as at the end of the preceding fiscal year of
the Company (and calculated on a pro forma basis giving effect to the
Merger);
(vii) securitizations or monetizations of assets in the ordinary course
of business of the Company or its Subsidiaries; or sale leasebacks
entered into by the Company and/or its Subsidiaries (including the
circumstance where one such party is seller and one such party is the
lessee); or the sale, transfer or assignment by the Company or its
Subsidiaries of rights under purchase agreements;
(viii) until the Merger Date, the sale or assignment by Merger Sub of
any shares of Target Common Stock owned by it that are in excess of the
Minimum Shares (but only to the extent of such excess) for cash and for
fair market value;
(ix) (1) any sale or disposition of any assets or business of Target
and its Subsidiaries or of any stock of Target required by a United
States Governmental Authority; provided that the sole consideration
received in connection with any such sale or other disposition of stock
or assets or business of Target shall be cash; (2) any grant of
trackage, haulage, switching or running rights or similar rights over
any rail line or with respect to any rail facility of the Company or of
any Subsidiary of the Company or of Target or any Subsidiary of Target,
or any sale or lease of such line or facility subject to retained
trackage rights, which will, in the reasonable judgment of the
Borrower, facilitate obtaining a final order of the STB approving the
Company's acquisition of control of Target and its Subsidiaries, and
which will be consummated or become effective only if any when such
order becomes effective; (3) any grant of trackage, haulage, switching
or running rights or similar rights to third parties in the ordinary
course of business or required by applicable Law; and (4) dispositions
by Merger Sub of common stock of the Company in payment of
consideration pursuant to the Merger Agreement; and
(x) sales, exchanges, leases, releases, abandonments or other
dispositions with the prior written consent of Majority Lenders;
provided, however, that in each of said cases (iv), (v), (vi) and (vii), on the
date thereof and immediately thereafter no Event of Default, or event which
would constitute an Event of Default but for the requirement that notice be
given, or time elapse, or both, shall have occurred and be continuing.
11.4.3 other than as outlined in its annual business plan submitted to
the Lenders, make, or permit any of its Subsidiaries to make, any Investments,
other than Permitted Investments, the Acquisition of the Target Common Stock
pursuant to the Tender Offer and the Merger and any intercompany loans made in
connection therewith;
11.4.4 effect or allow any of its Subsidiaries to effect any Hostile
Acquisition;
11.4.5 create, incur, assume or suffer to exist or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien on any of
their respective present or future assets or revenues other than (x) Permitted
Encumbrances, and (y) until the Merger Date, Merger Sub may directly or
indirectly sell, assign, pledge or encumber any shares of Target Common Stock
owned by it that are in excess of the Minimum Shares (but only to the extent of
such excess) for cash and for fair market value; it being understood that the
Voting Trust and the provisions thereof do not constitute a "Lien" on the shares
of capital stock of Target subject thereto;
11.4.6 in the case of the Company, its Subsidiaries and each of the
Guarantors, materially change the nature of their respective businesses;
11.4.7 violate, or permit any of its Subsidiaries to violate, any Law
(including, without limitation, ERISA and any applicable Environmental Laws),
the violation of which could have a Material Adverse Effect;
11.4.8 after the Initial Funding Date (i) agree or permit Merger Sub to
agree to any amendment to, or waive or permit Merger Sub to waive, any of its
rights under, any Related Agreement or terminate or agree to terminate any
Related Agreement, or (ii) agree or permit Merger Sub to agree to any amendment
to the Tender Offer Materials, if the effect of any such amendment, waiver or
termination (as applicable) referred to in clause (i) or (ii) would be (w) to
increase the consideration payable per share of Target Common Stock, (x) to
increase the aggregate amount of cash consideration to be paid by Merger Sub in
connection with the Tender Offer and the Merger, (y) to decrease the number of
shares constituting Minimum Shares set forth in the condition with respect to
the minimum number of shares to be validly tendered, or (z) otherwise materially
adverse to the Lenders, without in each case obtaining the prior written consent
of Majority Lenders to such amendment, waiver or termination; and
11.4.9 permit the Company or any of its Subsidiaries (i) to amend or
otherwise change the terms of any of the Canadian Credit Documents described in
clauses (i) through (vii) of the second sentence of Section 15.13 thereof, or
make any payment consistent with such an amendment thereof or such a change
thereto, without the prior written consent of all Lenders under this Agreement,
or (ii) to amend or otherwise change the terms of any of the Canadian Credit
Documents, or make any payment consistent with an amendment thereof or a change
thereto not described in clause (i), without the prior written consent of
Majority Lenders.
ARTICLE 12
DEFAULT
12.1 Events of Default
The occurrence of any of the following events shall constitute an Event
of Default under this Agreement:
12.1.1 the Borrower shall fail to make any payment of principal on the
Loan or the Bid Loan when due, whether due by acceleration or otherwise; or
12.1.2 the Borrower shall fail to make any payment of interest, fees or
other payment (other than a payment referred to in Section 12.1.1) due under
this Agreement within five (5) Business Days of its due date, whether due by
acceleration or otherwise; or
12.1.3 any representation, warranty, statement or certificate made or
delivered to any Lender or to the Administrative Agent in writing or any
representation or warranty deemed pursuant to Section 2.2 or Section 10.2 to
have been made to the Administrative Agent or any Lender or any financial
statement or other information delivered in writing to the Administrative Agent
or any Lender by the Borrower or any of the Guarantors or any of their officers
in, or in connection with, this Agreement is incorrect or misleading in any
material respect; or
12.1.4 the Borrower or any of the Guarantors shall fail to perform,
observe or comply with any of the covenants contained in Section 11.1.2(i), 11.2
or 11.3; or
12.1.5 the Borrower or any of the Guarantors shall fail to perform,
observe or comply with any other term, covenant or agreement contained in this
Agreement on its part to be performed, observed or complied with and such
failure shall remain unremedied for a period of thirty (30) days following
notice thereof by the Administrative Agent to the Company; or
12.1.6 if a change of control occurs for any Material Subsidiary other
than as permitted pursuant to Sections 11.4.1 and 11.4.2 or if any Person gains
control of the Company; or
12.1.7 the Company or any of its Subsidiaries shall fail to pay any of
its Indebtedness (other than that referred to in Sections 12.1.1 and 12.1.2) or
any interest or premium thereon, when due (whether at scheduled maturity or by
required prepayment, acceleration, demand or otherwise), the amount of which
individually or in the aggregate at any time exceeds C$50,000,000 and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness unless, in respect of
Indebtedness other than for borrowed money or Guarantees for borrowed money, the
Company or any of its Subsidiaries, as the case may be, is contesting such
failure diligently and in good faith and in respect of which no final
non-appealable judgment or order for the payment of money has been rendered and
no execution proceedings have been commenced and are unstayed; or any other
default which has not been cured or waived under any agreement or instrument
relating to any such Indebtedness, the amount of which individually or in the
aggregate at any time exceeds C$50,000,000, of the Company or any of its
Subsidiaries, or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such default or event is to accelerate, or to permit the
acceleration of the maturity of such Indebtedness; or any such Indebtedness, the
amount of which individually or in the aggregate at any time exceeds
C$50,000,000, shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; or any Event of Default (as defined in the Canadian Credit
Agreement) shall occur and be continuing, if at such time the Canadian Credit
Agreement shall not have terminated; or
12.1.8 a final non-appealable judgment or order for the payment of
money be rendered against the Company or any of its Subsidiaries such judgment
or order shall continue unsatisfied and unstayed (or shall not have been
vacated) for a period of thirty (30) consecutive days unless such judgment or
order could not have a Material Adverse Effect; or
12.1.9 (i) a Reportable Event or a failure to make a required
instalment or other payment (within the meaning of Section 412(n) of the Code or
Section 302(f) of ERISA) shall have occurred with respect to any Plan or Plans
of the Borrower or any of its ERISA Affiliates that, in the reasonable opinion
of the Majority Lenders, is likely to result in (A) the termination of such Plan
or Plans, (B) the appointment of a trustee by a United States District Court to
administer such Plan or Plans, or (C) the imposition of a Lien or other
encumbrance in favor of a Plan or the PBGC; or (ii) a trustee shall be appointed
by a United States District Court to administer any Plan; or (iii) the
withdrawal of the Borrower or any of its ERISA Affiliates from a Plan during a
plan year in which it was a "substantial employer" as defined in Section
4011(a)(2) of ERISA; or (iv) the filing by the Borrower or any of its ERISA
Affiliates of a notice of intent to terminate a Plan or the institution of other
proceedings to terminate a Plan; or (v) the PBGC shall have instituted
proceedings to terminate, or to cause a trustee to be appointed to administer,
any Plan of the Borrower or any of its ERISA Affiliates; or (vi) any Person
engages in a Prohibited Transaction with respect to any Plan which results in or
could result in liability of the Borrower or any of its ERISA Affiliates, any
Plan of the Borrower or any of its ERISA Affiliates or fiduciary of any such
Plan; or (vii) the Borrower or any of its ERISA Affiliates shall, or in the
reasonable opinion of the Majority Lenders is likely to, incur any liability in
connection with a withdrawal from, or the insolvency or reorganization of, a
Multiemployer Plan; and, in each case above, such event or condition, together
with all other such events or conditions, if any, could reasonably be likely to
subject the Borrower or any of its ERISA Affiliates to any Tax, penalty or other
liability which in the aggregate may exceed C$50,000,000; or
12.1.10 (i) the Merger shall not have been consummated on or prior to
the first anniversary of the Initial Funding Date, (ii) the Merger, if
consummated, shall be unwound, reversed or otherwise rescinded in whole or in
part for any reason, or (iii) prior to the Merger Date, any party to the Merger
Agreement shall have taken action to terminate the Merger Agreement; provided,
however, that the occurrence of any of the events described in this Section
12.1.10 shall not constitute an Event of Default if on or prior to the first
anniversary of the Initial Funding Date (x) all outstanding Term Loans and
Canadian Term Loans shall have been repaid and (y) the Revolving Loan
Commitments and the commitments to make Canadian Revolving Loans under the
Canadian Credit Agreement (and all outstanding Revolving Loans and Canadian
Revolving Loans) shall have been permanently reduced and repaid on a pro rata
basis (according to the initial amounts thereof) to an aggregate amount not
exceeding US$500,000,000 or the Equivalent Amount in CDollars; or
12.1.11 the Company or any Material Subsidiary shall not pay its debts
generally as such debts become due, or shall admit in writing its inability to
pay its debts generally as they become due, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be commenced or instituted
by or against the Company, or any Material Subsidiary seeking to adjudicate it
bankrupt or insolvent, or seeking winding-up, reorganization, arrangement,
adjustment, dissolution, protection, relief, liquidation or composition of it or
its debt under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking appointment of a receiver, trustee, sequestrator
or other similar official for it or for any substantial or material part of its
property or seeking the suspension of the operations of the Company or any
Material Subsidiary and, in the case of any such proceeding instituted against
the Company or any Material Subsidiary and in respect of which the Company or
any Material Subsidiary has not by any act indicated its consent to, approval
of, or acquiescence in, such proceeding, such proceeding shall remain
undismissed for a period of sixty (60) days; or the Company, or any Material
Subsidiary shall take corporate action to authorize any of the actions set forth
above in this Section 12.1.11 or
12.1.12 at any time prior to the later of the STB Approval Date and the
Merger Date, the Target shall fail to perform, observe or comply with any of the
covenants contained in Section 6 of the Merger Agreement and such failure could
reasonably be expected to result in a Material Adverse Effect; provided,
however, that such failure shall not constitute an Event of Default (i) if such
failure would not, if Target were a Subsidiary of the Borrower for all
purposes hereunder, constitute an Event of Default under any other Section of
this Article 12, and (ii) unless such failure shall remain unremedied for a
period of thirty (30) days.
12.2 Effect of a Default
Upon the occurrence and during the continuation of any Event of
Default, the Administrative Agent shall at the request, or may with the consent,
of the Majority Lenders, by notice to the Company (i) declare the obligation of
the Lenders to make Advances or Bid Advances to the Borrower to be terminated,
whereupon the same shall forthwith terminate, and/or (ii) declare the Loan and
the Bid Loan, all interest accrued and unpaid thereon and all other amounts
payable under this Agreement to be forthwith due and payable, whereupon the Loan
and the Bid Loan, all such accrued interest and all such other amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower and each of the Guarantors. Thereupon the Borrower shall immediately
pay to the Administrative Agent all such amounts due and payable. In addition to
the foregoing, in the event of the institution of any proceeding against the
Borrower or a Material Subsidiary or the Borrower or any Material Subsidiary
making an assignment for the general benefit of creditors or otherwise
voluntarily initiating any proceeding in respect of its property or creditors
under any Law relating to bankruptcy, insolvency or organization or relief of
debtors the effect of which is to cause an automatic stay to come into effect
with respect to the Borrower or a Material Subsidiary or an actual or deemed
entry of an order for relief with respect to any proceeding instituted by or
against the Borrower or a Material Subsidiary under the U.S. Federal Bankruptcy
Code, the Bankruptcy and Insolvency Act (Canada) or the Companies' Creditors
Arrangement Act (Canada) (as amended, supplemented or replaced from time to
time), as may be applicable, or any other applicable bankruptcy or insolvency
laws which provide for an automatic stay, the obligation of each Lender to make
Advances or Bid Advances shall automatically be terminated and the Loan and the
Bid Loan, all interest accrued and unpaid thereon and all other amounts payable
under this Agreement shall automatically become due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower and each of the Guarantors. For greater
certainty, the Borrower and each of the Guarantors will be considered to be in
default of their obligations hereunder by the mere lapse of time provided herein
for performing such obligations, without any requirement of further notice or
other act of the Administrative Agent or the Lenders unless a notice is
specifically required hereunder.
12.3 Remedies Cumulative; No Waiver
For greater certainty, it is expressly understood and agreed that the
rights and remedies of the Lenders and the Administrative Agent under this
Agreement are cumulative and are in addition to, not in substitution for, any
rights or remedies provided by law; no failure on the part of the Lenders or the
Administrative Agent to exercise, and no delay in exercising, any right or
remedy hereunder or thereunder shall operate as a waiver thereof, nor shall any
single or partial exercise by the Lenders or the Administrative Agent of any
right or remedy for a default or breach of any term, covenant, condition or
agreement herein contained prejudice or preclude any other or further exercise
thereof or the exercise of any other right or remedy for the same or any other
default or breach and shall not waive, alter, affect or prejudice any other
right or remedy.
12.4 Set-Off
In addition to, and not in limitation of, any rights now or hereafter
granted under applicable Law, each Lender is hereby expressly authorized (but
not obliged), at any time or from time to time upon the occurrence and during
the continuation of an Event of Default, to set off or compensate and to
appropriate and to apply any and all deposits, general or special, matured or
unmatured, and any other Indebtedness at any time held by or owing by such
Lender to, or for the credit of, or the account of, the Borrower or any of the
Guarantors against and on account of the obligations and liabilities of the
Borrower or each of the Guarantors due and payable to such Lender under this
Agreement including, without limitation, all claims of any nature or description
arising out of, or connected with, this Agreement, irrespective of whether or
not any demand therefor has been made and although such obligations and
liabilities of, or claims against, the Borrower or any of the Guarantors, are
contingent or unmatured. Each Lender shall upon any such set-off, compensation
or appropriation give immediate notice to the Administrative Agent and the other
Lenders and thereafter give notice to the Borrower.
ARTICLE 13
NOTICE
13.1 Notices, Etc.
All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing to the party for whom it is
intended and shall be mailed, sent or delivered, to such party at its address
set forth below with its signature or shall be sent by telecopier or other means
of rapid communication at its rapid communication address set forth below with
its signature, or at such other address or rapid communication address as shall
be designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective (i) if mailed, three (3)
Business Days after deposited in the mail, first class, postage prepaid, (ii) if
delivered, when delivered and (iii) if sent by telecopier or other means of
rapid communication, on the date of transmission if transmitted before 3:00 p.m.
(Montreal time) on a Business Day or, in any other case, on the next following
Business Day; provided however that notices and communications to the
Administrative Agent pursuant to Article 3, Article 4, Section 5.5 and Section
7.7 hereof shall not be effective until actually received by the Administrative
Agent. In the event of a postal strike or any slow-down in the postal service,
no notice of or communication by mail shall be effective if sent during or
within five (5) Business Days prior to the commencement of, such strike or
slow-down unless it is actually received by the party to whom it is addressed
and, in such event, it shall be effective only on the date of actual receipt.
ARTICLE 14
GOVERNING LAW: JURISDICTION; JUDGMENT CURRENCY
14.1 Governing Law
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
14.2 Jurisdiction
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY LOAN PARTY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OBLIGATIONS THEREUNDER, MAY
BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH
LOAN PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEX- CLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO SUCH LOAN PARTY AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SECTION 13.1;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH LOAN PARTY IN ANY
SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST SUCH
LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SECTION 14.2 RELATING
TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
To the extent that any Loan Party now or hereafter may be entitled, in any
jurisdiction in which proceedings may at any time be commenced with respect to
this Agreement, to claim for itself or its revenues, assets or properties any
sovereign immunity (including, without limitation, immunity from service of
process, jurisdiction, suit, judgment, counterclaim, enforcement of or execution
on a judgment, attachment prior to the judgment, attachment in aid of execution
of a judgment or other legal process), and to the extent that in any
jurisdiction there may be attributed any such sovereign immunity (whether or not
claimed), each Loan Party hereby irrevocably undertakes not to claim and hereby
irrevocably waives any such immunity to the fullest extent permitted by law.
14.3 Judgment Currency
14.3.1 If for any purpose, including the obtaining of judgment in any
court, it is necessary to convert a sum due hereunder from the currency in which
it is payable (the "Payment Currency") into another currency (the "Judgment
Currency"), the parties hereto agree, to the fullest extent that they may
lawfully and effectively do so, that the rate of exchange used shall be that at
which, in accordance with normal banking procedures, the Administrative Agent
could purchase the Payment Currency with the Judgment Currency in the New York
foreign exchange market on the Business Day preceding the date of final
judgment.
14.3.2 The obligation of the Borrower in respect of any sum due from it
to the Lenders or the Administrative Agent hereunder shall, notwithstanding any
judgment or payment in a currency other than the Payment Currency, be discharged
only to the extent that on the Business Day following receipt by the
Administrative Agent of any sum so paid or adjudged to be so due in the Judgment
Currency the Administrative Agent may in accordance with normal banking
procedures, purchase the Payment Currency with the amount of the Judgment
Currency so paid or adjudged to be due; if the amount in the Payment Currency so
purchased is less than the sum originally due to the Lenders and the
Administrative Agent in the Payment Currency, the Borrower and each Guarantor
agrees, as a separate obligation and additional cause of action and
notwithstanding any such payment or judgment, to indemnify the Lenders and the
Administrative Agent against such loss and if the amount in the Payment Currency
so purchased exceeds the sum originally due to the Lenders and the
Administrative Agent in the Payment Currency, the Lenders and the Administrative
Agent agree to remit to the Borrower such excess.
14.3.3 The term "rate of exchange" in this Section 14.3 means the spot
rate at which the Administrative Agent, in accordance with normal practices, is
able on the relevant date to purchase the Payment Currency with the Judgment
Currency and includes any premium and costs of exchange payable in connection
with the purchase.
ARTICLE 15
THE AGENTS AND THE LENDERS
15.1 Authorization of Agents
Each Lender hereby irrevocably appoints and authorizes each of the
Arrangers, the Advisor, the Syndication Agent, the Co-Documentation Agents and
the Administrative Agent to act as its agent hereunder with such powers as are
expressly delegated to the such Agent by the terms of this Agreement and the
Intercreditor Agreement, together with such other powers as are reasonably
incidental thereto; each Lender hereby authorizes and confirms the appointment
by Administrative Agent of Bank of Montreal as Repayment Agent under the
Intercreditor Agreement; and each Lender and Administrative Agent hereby
authorizes Repayment Agent to act as its agent in accordance with the terms of
the Intercreditor Agreement. Each Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement or, in the case of the
Administrative Agent and the Repayment Agent, in the Intercreditor Agreement. As
to any matters not expressly provided for by this Agreement, the Administrative
Agent shall act hereunder or in connection herewith in accordance with
instructions of the Majority Lenders but, in the absence of any such
instructions, the Administrative Agent may (but shall not be obliged to) take
such action as it deems it necessary to protect the rights of the Lenders, and
any such instructions and any action taken by the Administrative Agent in
accordance herewith shall be binding upon all the Lenders. Each Agent shall not,
by reason of this Agreement, or, in the case of the Repayment Agent, by reason
of the Intercreditor Agreement, be deemed to be a trustee for the benefit of any
Lender, the Borrower, the Guarantors or any other Person. None of the Agents nor
any of their respective directors, officers, employees or agents shall be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or in any certificate or other document
referred to, or provided for in, or received by any of them under, this
Agreement, for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement, or any other document referred to, or provided
for, herein or any collateral provided for hereby or for any failure by the
Borrower or any of the Guarantors to perform its obligations hereunder. The
Agents 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. None of the Agents nor any of their respective
directors, officers, employees or agents shall be responsible for any action
taken or omitted to be taken by it or them under or in connection herewith,
except for its or their own gross negligence or wilful misconduct. As of the
date on which Syndication Agent notifies the Borrower that it has concluded its
primary syndication of the Loan and Commitments, all obligations of the
Arrangers, the Advisor and the Syndication Agent, in such capacities hereunder,
shall terminate.
15.2 Agents' Responsibility
15.2.1 Each Agent shall be entitled to rely upon any certificate,
notice or other document (including any cable or telegram) 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 advisers,
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat each Lender as the holder of the
Participation in the Loan made by such Lender and as the holder of its share of
any Bid Loans and as the holder of Money Market Loans made by it for all
purposes hereof unless and until an assignment or transfer has been accepted by
the Borrower and the Guarantors and the Administrative Agent in accordance with
Article 16.
15.2.2 The Administrative Agent shall not be deemed to have knowledge
of the occurrence of an Event of Default unless the Administrative Agent has
received notice from a Lender or the Borrower or a Guarantor describing such an
Event of Default and stating that such notice is a "Notice of Default". In the
event that the Administrative Agent receives such a notice of the occurrence of
an Event of Default, the Administrative Agent shall promptly give notice thereof
to the Lenders. The Administrative Agent shall take such action with respect to
such Event of Default as shall be directed by the Majority Lenders, provided
that, unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obliged to) take such
action, or refrain from taking such action, with respect to such an Event of
Default as it shall deem advisable in the best interest of the Lenders.
15.2.3 The Agents shall have no responsibility (i) to the Borrower or
any of the Guarantors on account of the failure of any Lender to perform its
obligations hereunder, or (iii) to any Lender on account of the failure of the
Borrower or any of the Guarantors to perform its obligations hereunder.
15.2.4 Each of the Lenders severally represents and warrants to the
Agents that it has made its own independent investigation of the financial
condition and affairs of each of the Borrower and each of the Guarantors in
connection with the making and continuation of its Participation in the Loan or
its Bid Advances or Money Market Loans hereunder and has not relied on any
information provided to such Lender by any Agent in connection herewith, and
each Lender represents and warrants to the Agents that it shall continue to make
its own independent appraisal of the creditworthiness of the Borrower and each
of the Guarantors while the Loan or any Bid Loan or any Money Market Loan is
outstanding or any Commitment is in force.
15.3 Rights of Agents as Lenders
With respect to its Commitments and its Participation in the Loan and
any Bid Loans made by it, each Agent in its capacity as a Lender shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not acting as an Agent and the terms "Lender" or "Lenders"
shall, unless the context otherwise indicates, include such Agent in its
capacity as a Lender. Each Agent may (without having to account therefor to any
Lender) accept deposits from, lend money to and generally engage in any kind of
banking, or other business with the Borrower or any of the Guarantors as if it
were not acting as an Agent.
15.4 Indemnity
The Lenders agree to indemnify each Agent (to the extent not otherwise
reimbursed by the Borrower or the Guarantors) rateably in accordance with their
respective Participation in the Loan (or, if no Advances have been made,
rateably in accordance with their respective Commitments), for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
cost, expenses or disbursements of any kind and nature whatsoever which may
be imposed on, incurred by, or asserted against, such Agent in any way relating
to or arising out of this Agreement 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 is apprehended or has occurred and is
continuing, normal administrative costs and expenses incidental to the
performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or of any such other documents, provided that no Lender shall be
liable for any of the foregoing to the extent they arise from such Agent's gross
negligence or wilful misconduct.
15.5 Notice by Administrative Agent to Lenders
Promptly after its receipt thereof, the Administrative Agent will
forward to each Lender a copy of each report, notice or other document required
by this Agreement to be delivered to the Administrative Agent for such Lender.
15.6 Protection of Agents
15.6.1 No Agent shall be required to keep itself informed as to the
performance or observance by the Borrower or any of the Guarantors of this
Agreement or any other document referred to or provided for herein or to inspect
the properties or books of the Borrower or any of the Guarantors. Except for
notices, reports and other documents and information expressly required to be
furnished to the Lenders by an Agent hereunder, or, in the case of the Repayment
Agent, in accordance with the Intercreditor Agreement, such Agent shall have no
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs or financial condition of the Borrower or any
of the Guarantors which may come into the possession of such Agent. Nothing in
this Agreement, or, in the case of the Repayment Agent, in the Intercreditor
Agreement, shall oblige any Agent to disclose any information relating to the
Borrower or any of the Guarantors if such disclosure would or might in the
opinion of such Agent constitute a breach of any law or duty of secrecy or
confidence.
15.6.2 Unless the Administrative Agent shall have been notified in
writing or by tested cable by any Lender prior to the date of an Advance or Bid
Advance requested hereunder that such Lender does not intend to make available
to the Administrative Agent such Lender's Participation in such Advance or Bid
Advance, the Administrative Agent may assume that such Lender has made such
Lender's Participation in such Advance or Bid Advance available to the
Administrative Agent on the date of such Advance or Bid Advance and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Lender, the Administrative
Agent shall be entitled to recover such amount (together with interest thereon
at the rate determined by the Administrative Agent as being its cost of funds in
the circumstances) on demand from such Lender or, if such Lender fails to
reimburse the Administrative Agent for such amount on demand, from the Borrower.
15.6.3 Unless the Administrative Agent shall have been notified in
writing or by cable by the Borrower prior to the date on which any payment is
due hereunder that the Borrower does not intend to make such payment, the
Administrative Agent may assume that the Borrower has made such payment when so
due and the Administrative Agent may, in reliance upon such assumption, make
available to each Lender on such payment date an amount equal to such Lender's
pro rata share of such assumed payment. If it proves to be the case that the
Borrower has not in fact made such payment to the Administrative Agent, each
Lender shall forthwith on demand repay to the Administrative Agent the amount
made available to such Lender (together with interest at the rate determined by
the Administrative Agent as being its cost of funds in the circumstances).
15.7 Notice by Lenders to Administrative Agent
Each Lender shall endeavor to use its best efforts to notify the
Administrative Agent of the occurrence of any event which by the giving of
notice or lapse of time or both would constitute an Event of Default forthwith
upon becoming aware of such event and of any legal proceeding such Lender
intends to take against the Borrower or any of the Guarantors in virtue of this
Agreement, but no Lender shall be liable if it fails to give such notice to the
Administrative Agent.
15.8 Resignation of Administrative Agent
Subject to the appointment and acceptance of a successor Administrative
Agent (as provided below) (i) the Administrative Agent may resign at any time by
giving not less than thirty (30) days written notice thereof to the Lenders and
the Borrower, and (ii) the Administrative Agent may be removed at any time with
cause by the Majority Lenders by giving not less than thirty (30) days written
notice of their intention to do so to the Administrative Agent and the Borrower.
Upon such resignation or removal, the Majority Lenders shall have the right to
appoint a successor Administrative Agent, which, if no Event of Default has
occurred and is continuing, must be acceptable to the Borrower. If no successor
Administrative Agent shall have been so appointed by the Majority Lenders and
shall have accepted such appointment within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation or receiving of notice of
removal, then the retiring Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent which, if no Event of Default has
occurred and is continuing, must be acceptable to the Borrower.
If (i) the Total Commitment has been cancelled or terminated, (ii) the
Loan has been repaid, and (iii) the Administrative Agent has no outstanding Bid
Loans, the Administrative Agent may resign at any time by giving not less than
thirty (30) days' written notice thereof to the Lenders with outstanding Bid
Loans and the Borrower. If no agreement is reached by the parties to whom such
notice is given within such thirty (30) day period on the appointment of a
successor Administrative Agent, the Administrative Agent may appoint as a
successor Administrative Agent the Lender with the highest amount of outstanding
Bid Loans and such Lender shall become the Administrative Agent effective on
such appointment.
Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, or upon the appointment by the
Administrative Agent of a successor Administrative Agent as aforesaid, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Agreement
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 Administrative Agent.
15.9 Sharing Among the Lenders
The Lenders agree among themselves that, except as otherwise provided
for by the provisions of this Agreement, all sums received by the Administrative
Agent in its capacity as agent of the Lenders, for the ratable account of the
Lenders relative to this Agreement or any other document contemplated hereby
(whether received by voluntary payment, by the exercise of the right of set-off
or compensation or by counterclaim, cross action or as proceeds of realization
of any security) shall be shared by each Lender pro rata, in accordance with
their respective Participations and each Lender undertakes to do all such things
as may be reasonably required to give full effect to this Section 15.9. If any
sum which is so shared is later recovered from the Lender who originally
received it, each of the other Lenders shall restore its proportionate share of
such sum to such Lender, without interest.
If any Lender obtains any payment (whether voluntary, involuntary or
through the exercise of any right of set-off or compensation or by counterclaim,
cross-action or as proceeds of realization of any security) on account of the
Loan in excess of its ratable share of payments on account of the Loan obtained
by all the Lenders, such Lender shall promptly deliver such amount to the
Administrative Agent for distribution to all Lenders pro rata in accordance with
their respective Participations.
Each Lender agrees with the other Lenders that it will not, without the
prior written consent of the other Lenders, take or obtain any Lien on any
property of the Company or any Material Subsidiary to secure the obligations of
the Borrower or any of the Guarantors hereunder, except for the benefit of all
Lenders or as may otherwise be required by Law.
15.10 Intercreditor Agreement
Each Lender hereby further authorizes Administrative Agent and the
Repayment Agent, on behalf of and for the benefit of Lenders, to enter into the
Intercreditor Agreement, and each Lender agrees to be bound by the terms of the
Intercreditor Agreement.
15.11 Provisions for the Benefit of Lenders Only
The provisions of this Article 15 relating to the rights and
obligations of the Lenders and Administrative Agent inter se shall be operative
as between the Lenders and Agents only, and the Borrower and the Guarantors
shall not have any rights or obligations under or be entitled to rely for any
purposes upon such provisions except for Sections 15.8 and 15.14.
15.12 Amendment of Article 15
Except for such provisions of Section 15.8 and Section 15.14 that
relate to the Borrower, the provisions of this Article 15 may be amended or
added to, from time to time, by execution by the Administrative Agent and the
Lenders of an instrument in writing and such instrument in writing shall validly
and effectively amend or add to any or all of the provisions of this Article 15
affecting the Lenders without requiring the execution of such instrument in
writing by the Borrower or any of the Guarantors. Notwithstanding the foregoing
sentence, for so long as no Event of Default has occurred and is continuing, the
second and third sentences of Section 15.13 cannot be amended without the
consent of the Borrower.
15.13 Authorized Waivers, Variations and Omissions
If so authorized in writing by Majority Lenders, the Administrative
Agent may grant waivers, consents, vary the terms of this Agreement, and do or
omit to do all such acts and things in connection herewith or therewith. Except
with the prior written agreement of all the Lenders, nothing in this Section
15.13 shall authorize (i) any increase in the Total Commitment or subject the
Lenders to any additional financial or other material obligations, (ii) any
extension of the Term Loan Maturity Date, (iii) any extension of the Revolving
Loan Commitment Termination Date, (iv) any change in the definition of Majority
Lenders, (v) any reduction in any of the interest rates or fees (other than
agency fees payable to the Administrative Agent) provided for in this Agreement,
(vi) postpone any date fixed for any payment of interest or fees or (vii) any
amendments to any guarantees, security, if any, or Section 15.9 or this Section
15.13. Save as otherwise provided in Article 15 and in Section 16.1.2, all
instructions, decisions, approvals, consents or actions referred to in this
Agreement and required of the Lenders shall be made, taken or given by the
Majority Lenders. No amendment, waiver or consent shall, unless in writing and
signed by the applicable Agent in addition to the Lenders required herein to
take such action, affect the rights or duties of such Agent under this
Agreement. Notwithstanding anything in this Agreement to the contrary, (a) in
the event Majority Lenders or all Lenders shall consent to any amendment,
modification or waiver of any provision contained in Articles 2, 10, 11 or 12
(other than Sections 12.1.1, 12.1.2 and 12.1.11) of this Agreement, or the
definitions in Article 1 as used in such Articles, including without limitation
any waiver of compliance therewith as a condition to making any Advance or Bid
Advance, such amendment, modification or waiver shall not be effective
(notwithstanding approval thereof by Majority Lenders or all Lenders) with
respect to either this Agreement or the Canadian Credit Agreement unless such
amendment, modification or waiver is effective with respect to both such
agreements and any fees which are paid by the Company or any of its Subsidiaries
to obtain consent to any such amendment, modification or waiver are paid on a
ratable basis to Lenders and "Lenders" (as defined in the Canadian Credit
Agreement) who consent to such amendment, modification or waiver, and the
Lenders hereunder hereby consent to any such amendment, modification or waiver
in this Agreement and the Canadian Credit Agreement as is necessary to give
effect to this sentence, and (b) any change in the definition of Majority
Lenders or to this Section 15.13 shall require the prior written agreement of
all Lenders and all "Lenders" as defined in the Canadian Credit Agreement.
15.14 Dissenting Lenders
If a Lender (in this Section 15.14 called a "Dissenting Lender")
withholds its consent or its approval following a request of the Borrower as
provided in this Agreement and, as a result, the consent of all the Lenders or
the Majority Lenders, as the case may be, cannot be obtained in connection with
such request, the Borrower may, provided at least 51% of the Lenders based on
the amount of the Total Commitment in effect from time to time have consented to
such request, by giving notice to each Dissenting Lender and to the Agent within
ten (10) days of being advised by the Administrative Agent of whether the
Lenders or the Majority Lenders, as the case may be, have consented to such
request, designate an alternate lender (which need not be an existing Lender) to
purchase an assignment in accordance with Section 16.1.7 of such Dissenting
Lender's Commitments and outstanding Loan and Bid Loan and Money Market Loans
(which alternative lender shall purchase such assignment prior to the expiry of
such ten (10) day delay) provided that no Lender shall be obligated to make any
such assignment as a result of a demand by the Borrower pursuant to this Section
15.14 unless said assignment is done on a without warranty basis and unless and
until such Dissenting Lender shall have received one or more payments from
either the Borrower or one or more assignees in an aggregate amount at least
equal to the aggregate outstanding principal amount of the Loan and Bid Loan and
Money Market Loans owing to such Dissenting Lender, together with accrued
interest thereon to the date of payment of such principal amount and all other
amounts payable to such Dissenting Lender under this Agreement. Any such
alternate lender is subject to the Administrative Agent's prior written
approval, such approval not to be unreasonably withheld. Nothing contained
herein shall be deemed to obligate any Lender or the Administrative Agent to
agree to any such request made by the Borrower.
ARTICLE 16
SUCCESSORS AND ASSIGNS
16.1 Successors and Assigns
16.1.1 This Agreement shall become effective when it shall have been
executed by the Borrower, the Guarantors, the Administrative Agent, the
Arrangers, the Advisor, the Syndication Agent and each Lender and thereafter
shall be binding upon and enure to the benefit of the Borrower, the Guarantors,
the Administrative Agent, the Arrangers, the Advisor, the Syndication Agent, the
Lenders and their respective successors and permitted assigns.
16.1.2 Neither the Borrower nor any of the Guarantors shall have the
right to assign their rights or obligations hereunder or any interest herein
without the prior written consent of all the Lenders, which consent may be
arbitrarily withheld.
16.1.3 A Lender may (i) without notice to or consent of any Person,
grant participations in its interest in the Credit to one or more Persons (each
a "Participant"); or (ii) with the consent of the Borrower (but not the
Guarantors) which consent shall not be unreasonably withheld or delayed, assign
its rights and obligations in the Credit to one or more financial institutions
(each an "Assignee") in whole or in part, subject to the following limitations:
(w) any such Assignee shall be subject to approval by
the Administrative Agent and no such consent of the Borrower or
approval of the Administrative Agent shall be required for assignments
by a Lender to an Affiliate of such Lender or to another Lender or
during the occurrence and continuance of an Event of Default;
(x) no Lender shall assign its Commitments (except to
Affiliates of such Lender and to other Lenders) in amounts less than
US$10,000,000 (or such lesser amount as shall constitute the aggregate
amount of the Commitments and Advances of such Lender) in the
aggregate;
(y) no Lender may assign its Revolving Loan
Commitment or Term Loan Commitment or Advances except together with a
proportionate share of all Commitments and Advances held by such
Lender; and
(z) notwithstanding anything to the contrary
contained herein, no Lender may assign its Advances or Commitments
except to a citizen or resident of the United States of America, a
corporation, partnership or other entity created or organized in or
under the laws of the United States of America or any state or
political subdivision thereof or any other Person that is completely
exempt from U.S. federal withholding provisions with respect to all
payments to be made by the Borrower hereunder.
Except in the case of an Assignee which has delivered an assumption agreement
pursuant to Section 16.1.7, the Participant or Assignee shall not have any
rights under this Agreement (such Person's rights against such Lender in respect
of such participations and assignments to be those set forth in the agreement
executed by such Lender in favor of such Person relating thereto and such Person
shall not constitute a "Lender" hereunder). With respect to all such
participations (i) the obligations under this Agreement of each Lender selling a
participation interest hereunder shall remain unmodified and fully effective and
enforceable against such Lender, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the party entitled to receive payments for all
purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
(v) such Lender shall not grant to its Participant(s) any rights to consent or
withhold consent to any action taken by such Lender or the Administrative Agent
under this Agreement other than action requiring the consent of all of the
Lenders hereunder.
In addition to the assignments and participations permitted under the
foregoing provisions of this Section 16.1, any Lender may assign and pledge all
or any portion of its rights and obligations in the Credit, and any other
Obligations owed to such Lender to any Federal Reserve Bank as collateral
security pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any operating circular issued by such Federal Reserve Bank;
provided that (i) no lender shall, as between the Borrower and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii)in no event shall such Federal Reserve bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit any
action hereunder.
16.1.4 Subject to Section 16.1.9, the Lenders may deliver a copy of any
financial statement or any other information relating to the business, assets or
condition (financial and otherwise) of the Company and its Subsidiaries or the
Guarantors which may be furnished to them under this Agreement or otherwise to
any prospective or other Participant or Assignee to the extent reasonably
required by such Participant or Assignee in connection with its interest or the
proposed acquisition of an interest in the Credit or a Bid Loan or any Money
Market Loans.
16.1.5 The Borrower and each of the Guarantors shall provide such
certificates, acknowledgements and further assurances in respect of this
Agreement and the Credit or a Bid Loan or a Money Market Loan as such Lender may
reasonably require in connection with any participation or assignment pursuant
to Section 16.1.3.
16.1.6 Except in the case of an Assignee which has delivered an
assumption agreement pursuant to Section 16.1.7:
(a) a Lender granting a participation or making an assignment shall
remain a "Lender" hereunder and shall act on behalf of all of its
Participants and Assignees in all dealings with the Borrower and the
Guarantors in respect of the Credit and the Bid Loans and any Money
Market Loans;
(b) the Participant or Assignee shall not constitute a "Lender"
hereunder; and
(c) all amounts payable by the Borrower hereunder shall be determined
as if such Lender had not granted such participation or made such
assignment.
16.1.7 A Lender may deliver to the Borrower, the Guarantors and the
Administrative Agent an agreement substantially in the form of Schedule 16.1.7
annexed hereto by which any Assignee of such Lender assumes the obligations and
agrees to be bound by all the terms and conditions of this Agreement, all as if
such Assignee had been an original party hereto. Upon any such assignment and
assumption of the obligations of such Lender by an Assignee:
(a) the Administrative Agent shall, upon receipt of a fee of US$2,500
from the Assignee (provided that such fee shall be paid by the Borrower
in the event of any assignment pursuant to Section 7.12 or 8.5), record
the assignment and any modified Commitments resulting therefrom; and
(b) the assigning Lender, the Borrower and the Guarantors shall be
released from their respective obligations hereunder (to the extent of
such assignment and assumption) and thereafter shall not have any
liability or obligations to each other to such extent, except in
respect of matters arising prior to such assignment.
In the event a Lender assigns the full amount of its Loan and Commitments and
such Lender has an outstanding Bid Loan and/or any Money Market Loans at the
time of such assignment, such Lender must also assign the full amount of such
Bid Rate Loans and Money Market Loans to a Person which is a Lender at the time
of such assignment.
16.1.8 The Borrower and each of the Guarantors hereby consents to the
disclosure by each Lender to any Participant or Assignee of all information in
regard to this Agreement. The Borrower and each of the Guarantors further agrees
to co-operate fully with each Lender in connection with any transaction pursuant
to Section 16.1.7 and to execute and deliver such documents and assurances as a
Lender may reasonably request in connection therewith including, without
limitation, the agreement referred to in Section 16.1.7.
16.1.9 Each Lender and the Administrative Agent agrees (on behalf of
itself and each of its Affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of this nature and in accordance with safe and sound lending practices, any
non-public information supplied to it by the Company or any of its Subsidiaries
pursuant to this Agreement (and which is not independently known to such Lender
or the Administrative Agent) provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by Law or judicial
process, (ii) to counsel for any of the Lender or the Administrative Agent,
(iii) to a Lender's examiners, auditors or accountants, (iv) to the
Administrative Agent or any other Lender, (v) in connection with any litigation
to which any one or more of the Lenders is a party, (vi) to any Affiliate of any
Lender or the Administrative Agent, or (vii) to any Assignee or Participant (or
prospective Assignee or Participant) so long as such Assignee or Participant (or
prospective Assignee or Participant) first executes and delivers to the
respective Lender a Confidentiality Agreement substantially in the form of
Schedule 16.1.9 annexed hereto; provided, further, that, unless specifically
prohibited by applicable Law or court order, each Lender shall, prior to
disclosure thereof, notify the Company of any request for disclosure of any such
non-public information (x) by any governmental agency or representative thereof
(other than any such request in connection with an examination of such Lenders
financial condition by such governmental agency), or (y) pursuant to legal
process; and provided finally that in no event shall any Lender or the
Administrative Agent be obligated or required to return any materials furnished
by the Company or any of its Subsidiaries.
16.1.10 No Lender shall be entitled to grant a participation or an
assignment pursuant to Section 16.1.3 or to change its branch of account, as the
case may be, if, as a result, the Borrower would be required to pay or reimburse
the Participant or Assignee for any Taxes under Section 9.7 or any Compensating
Amount under Section 8.2.
16.1.11 Each Lender listed on the signature pages hereof hereby
represents and warrants (i) that it has experience and expertise in the making
of loans such as the Term Loans and/or the Revolving Loans, as applicable; and
(ii) that it will make its Advances for its own account in the ordinary course
of its business and without a view to distribution of its interest in the Credit
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of this
Article 16, the disposition of such interests in the Credit shall at all times
remain within its exclusive control). Each Lender listed on the signature pages
hereof hereby represents and warrants that it is a citizen or resident of the
United States of America, a corporation, partnership or other entity created or
organized in or under the laws of the United States of America or any state or
political subdivision thereof or any other Person that is completely exempt from
U.S. federal withholding tax with respect to all payments to be made by the
Borrower hereunder. Each Lender that becomes a party hereto after the date
hereof shall be deemed to represent and warrant that it is a citizen or resident
of the United States of America, a corporation, partnership or other entity
created or organized in or under the laws of the United States of America or any
state or political subdivision thereof or any other Person that is exempt from
U.S. federal withholding tax with respect to all payments to be made by the
Borrower hereunder.
ARTICLE 17
GUARANTEE
17.1 Guarantee
Each of the Guarantors, for good and valuable consideration received,
hereby absolutely, irrevocably and unconditionally guarantees, as primary
obligor and not merely as surety, in favor of each of the Lenders and the
Administrative Agent, the prompt and complete payment when due, whether at
stated maturity, by acceleration or otherwise, of all present and future
obligations of the Borrower resulting from the terms and conditions of this
Agreement, including without limitation, the repayment of the Bid Loan and the
Loan and all reimbursement obligations under any Letters of Credit, together
with interest thereon and all fees and other amounts as provided in this
Agreement (such obligations being herein called the "Obligations"). Each of the
Guarantors shall be considered as primarily liable to the Lenders and the
Administrative Agent, and shall not be released nor its liability hereunder
limited or lessened by any variation or departure from the provisions of this
Agreement nor by the Lenders or the Administrative Agent's granting time, taking
or giving up securities, accepting compositions, granting releases or
discharges, or otherwise dealing with any Person, nor by any other thing
whatsoever, either of a like nature to the foregoing or otherwise whereby as
guarantor only, a Guarantor would or might be released, and none of the Lenders
or the Administrative Agent shall be bound to exhaust its recourse against the
Borrower or any other Person or any security it may hold before being entitled
to payment from each of the Guarantors. The Guarantors covenant and agree that
until such time as each of the Lenders and the Administrative Agent shall have
been indefeasibly paid in full all Obligations, no payment will be taken,
demanded, received or accepted by a Guarantor of or on account of the principal
amount of or interest of any indebtedness incurred by a Guarantor in fulfillment
of its obligations pursuant to this Section 17.1 or on any other indebtedness
payable by the Borrower, each of the Guarantors agreeing that this said
indebtedness shall, at all times, be fully subordinated to and rank in time and
right of payment junior to the Obligations, and each of the Guarantors hereby
renounces any rights of compensation and/or set-off and/or counterclaim. Without
limiting the foregoing, each of the Guarantors hereby expressly subordinates and
postpones all of its rights to the benefit of subrogation (whether contractual,
under the Bankruptcy Code, under common law or otherwise) and all contractual,
common law, statutory and other rights of reimbursement, contribution,
exoneration or indemnity (or any similar right) from or against the Borrower
which may have arisen in connection with this guarantee, and agrees not to
enforce or attempt to enforce any of the foregoing, until indefeasible full
repayment of the Obligations and the termination of all Letters of Credit and
the Total Commitment. Each of the Guarantors hereby determines and agrees that
the execution, delivery and performance of this Agreement by such Guarantor is
necessary and convenient to the conduct, promotion or attainment of the business
of the Borrower and the Guarantors and in furtherance of the corporate purposes
of the Guarantors. Notwithstanding anything herein to the contrary, the
obligations of CNR Properties arising under this Article 17 are solely with
respect to the obligations of Canadian National Railway Company under this
Agreement in its capacity as a Guarantor and arise only to the extent it is
permitted to guarantee such obligations under applicable Law. Upon the
reasonable request of the Administrative Agent, CNR Properties will execute a
guarantee agreement with substantially the same effect as this Article 17 in
order to guarantee the obligations of any future Guarantor under this Agreement
to the extent that CNR Properties is permitted to guarantee such obligations
under applicable law.
17.2 Guarantee Absolute
Each of the Guarantors guarantees that the Obligations will be paid
strictly in accordance with the terms of this Agreement, regardless of any Law,
regulation, or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Administrative Agent or the Lenders with
respect thereto. The liability of each of the Guarantors under this Agreement
shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any provisions of this
Agreement, or any other agreement or instrument relating to this
Agreement;
(ii) any change in the time, manner or place of payment of or in any
other term of, all or any of the Obligations or any other amendment,
restatement or waiver of or any consent to departure from this
Agreement;
(iii) any exchange, release or non-perfection of any collateral or any
release or amendment or waiver of or consent to departure from any
other guarantee, for all or any of the Obligations;
(iv) the reconstruction, reorganization, consolidation, amalgamation or
merger of the Borrower with or into any other Person, or the transfer,
sale, lease or other disposition by the Borrower of all or
substantially all of its assets or business to any other Person,
whether or not affected in compliance with the provisions of this
Agreement;
(v) the illegality under any applicable Law of repayment of the
Obligations or the adoption of any Law purporting to render any
Obligations null and void;
(vi) any defense, setoff or counterclaim which may at any time be
available to or asserted by any Guarantor against the Administrative
Agent or any Lender; or
(vii) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor.
The liability of each of the Guarantors under this Article 17 shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Obligations is rescinded or must otherwise be returned
by the Administrative Agent or any Lender upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, all as though such payment had not
been made.
17.3 Waiver
Each of the Guarantors hereby waives promptness, diligence, notice of
acceptance, presentment, protest, demand, notice of default, and any other
notice with respect to any of the Obligations and its liability hereunder and
any requirement that the Administrative Agent or any Lender protect, secure,
perfect or insure any Lien, if any, or any property subject thereto or exhaust
any right or take any action against the Borrower or any other Person or any
collateral.
17.4 Continuing Guarantee
The obligations of each of the Guarantors under this Article 17 shall
be a continuing guarantee and shall:
(i) remain in full force and effect until payment in full of the
Obligations and all other amounts payable under this Agreement;
(ii) be binding upon each of the Guarantors, its successors and
assigns; and
(iii) enure to the benefit of and be enforceable by the Lenders, the
Administrative Agent and their respective successors, transferees and
assigns.
Without limiting the generality of the foregoing clause (iii), upon any
assignment by any Lender of all or any part of any interest in this Agreement by
it to any other Person in accordance with the terms of this Agreement, such
other Person shall thereupon become vested with all the rights in respect
thereof granted to such Lender herein or otherwise, subject, however, to the
provisions of this Agreement concerning the Administrative Agent and subject to
compliance with Section 16.1.7.
17.5 Fraudulent Conveyance Limitation
17.5.1 Anything contained in this Article 17 to the contrary
notwithstanding, if any Fraudulent Transfer Law (as hereinafter defined) is
determined by a court of competent jurisdiction to be applicable to the
obligations of any Guarantor (other than the Company ) under this Article 17,
such obligations of such Guarantor hereunder shall be limited to a maximum
aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable state law (collectively, the "Fraudulent
Transfer Laws"), in each case after giving effect to all other liabilities of
such Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor (x) in respect of intercompany indebtedness to the Borrower or other
affiliates of the Borrower to the extent that such indebtedness would be
discharged in an amount equal to the amount paid by such Guarantor hereunder and
(y) under any guaranty of subordinated indebtedness which guaranty contains a
limitation as to maximum amount similar to that set forth in this Section
17.5.1, pursuant to which the liability of such Guarantor hereunder is included
in the liabilities taken into account in determining such maximum amount) and
after giving effect as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
reimbursement, indemnification or contribution of such Guarantor pursuant to
applicable law or pursuant to the terms of any agreement (including without
limitation any such right of contribution under Section 17.5.2).
17.5.2 Guarantors together desire to allocate among themselves, in a
fair and equitable manner, their obligations arising under this Article 17.
Accordingly, in the event any payment or distribution is made on any date by any
Guarantor under this Article 17 (a "Funding Guarantor") that exceeds its Fair
Share (as defined below) as of such date, that Funding Guarantor shall be
entitled to a contribution from each of the other Guarantors in the amount of
such other Guarantor's Fair Share Shortfall (as defined below) as of such date,
with the result that all such contributions will cause each Guarantor's
Aggregate Payments (as defined below) to equal its Fair Share as of such date.
"Fair Share" means, with respect to a Guarantor as of any date of determination,
an amount equal to (i) the ratio of (x) the Adjusted Maximum Amount (as defined
below) with respect to such Guarantor to (y) the aggregate of the Adjusted
Maximum Amounts with respect to all Guarantors, multiplied by (ii) the aggregate
amount paid or distributed on or before such date by all Funding Guarantors
under this Article 17 in respect of the obligations guarantied. "Fair Share
Shortfall" means, with respect to a Guarantor as of any date of determination,
the excess, if any, of the Fair Share of such Guarantor over the Aggregate
Payments of such Guarantor. "Adjusted Maximum Amount" means, with respect to a
Guarantor as of any date of determination, the maximum aggregate amount of the
obligations of such Guarantor under this Article 17, determined as of such date
in accordance with Section 17.5.1; provided that, solely for purposes of
calculating the "Adjusted Maximum Amount" with respect to any Guarantor for
purposes of this Section 17.5.2, any assets or liabilities of such Guarantor
arising by virtue of any rights to subrogation, reimbursement or indemnification
or any rights to or obligations of contribution hereunder shall not be
considered as assets or liabilities of such Guarantor. "Aggregate Payments"
means, with respect to a Guarantor as of any date of determination, an amount
equal to (i) the aggregate amount of all payments and distributions made on or
before such date by such Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 17.5.2) minus (ii) the aggregate
amount of all payments received on or before such date by such Guarantor from
the other Guarantors as contributions under this Section 17.5.2. The amounts
payable as contributions hereunder shall be determined as of the date on which
the related payment or distribution is made by the applicable Funding Guarantor.
The allocation among Guarantors of their obligations as set forth in this
Section 17.5.2 shall not be construed in any way to limit the liability of any
Guarantor hereunder.
17.6 Taxes
17.6.1 Any and all payments to the Lenders by the Guarantors in respect
of the Obligations, shall be made free and clear of and without deduction or
withholding for any and all present or future Taxes excluding, in the case of
each Lender and the Administrative Agent, (i) Taxes on the overall income or net
profits (or franchise taxes imposed in lieu thereof) of such Lender or
Administrative Agent imposed by any jurisdiction in which such Lender or
Administrative Agent is organized or has its Applicable Lending Office, and (ii)
in the case of each Lender and the Administrative Agent, Taxes imposed solely by
reason of the Lender or the Administrative Agent (as the case may be) doing
business in the jurisdiction imposing such Tax, other than as a result of this
Agreement or any transaction contemplated hereby (all Taxes, other than such
excluded Taxes, being hereinafter referred to as "Section 17.6 Taxes") unless
such Taxes are required by law or the administration thereof to be deducted or
withheld. If any Guarantor shall be required by Law or the administration
thereof to deduct or withhold any such Section 17.6 Taxes from or in respect of
any such amount payable hereunder then, (i) the amount payable shall be
increased as may be necessary so that after making all required deductions or
withholdings (including deductions or withholdings applicable to additional
amounts paid under this Section 17.6), the Lenders receive an amount equal to
the amount they would have received if no such deduction or withholding had been
made; (ii) such Guarantor shall make such deductions or withholdings; and (iii)
such Guarantor forthwith shall pay the full amount deducted or withheld to the
relevant taxation or other authority in accordance with applicable Law.
17.6.2 Each Guarantor agrees to pay forthwith any present or future
stamp documentary taxes or any other excise or property taxes, charges or
similar levies (all such taxes, charges and levies being herein referred to as
"Other Taxes") imposed by any jurisdiction (or any political subdivision or
taxing authority thereof or therein) which arise from any payment made by the
Guarantors hereunder.
17.6.3 Each Guarantor agrees to indemnify the Lenders for the full
amount of (i) Section 17.6 Taxes and Other Taxes, not deducted or withheld and
paid by such Guarantors in accordance with Section 17.6.1 and 17.6.2 to the
relevant taxation or other authority and (ii) any Section 17.6 Taxes or Other
Taxes imposed by any jurisdiction on amounts payable by any Guarantor under this
Section 17.6, in each case paid by the Lenders and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not any such Taxes or Other Taxes were correctly or legally asserted;
provided that, if such Taxes or Other Taxes were incorrectly or illegally
imposed, such Lender shall, at the reasonable request of the applicable
Guarantor, take all reasonable actions that are without risk or material cost to
such Lender to claim and obtain refunds with respect to such Taxes or Other
Taxes and will promptly remit such refunds after receipt thereof to such
Guarantor. Payment under this indemnification shall be made within 15 days from
the date the Administrative Agent or the relevant Lenders make written demand
therefor. A certificate as to the amount of such Taxes or Other Taxes, providing
reasonable details of the calculation thereof, and evidence of payment thereof
submitted to the relevant Guarantor by the Administrative Agent shall be prima
facie evidence of the amount due from such Guarantor to the Administrative Agent
or the Lenders.
17.6.4 Each Guarantor shall furnish to the Administrative Agent and the
relevant Lenders the original or a certified copy of a receipt evidencing any
payment of Taxes or other Taxes made by such Guarantor, as soon as such receipt
becomes available.
Each Lender and the Administrative Agent agrees that it will
(i) take all reasonable actions reasonably requested by the Guarantor that are
without risk or material cost to such Lender or the Administrative Agent (as the
case may be) to maintain all exemptions, if any, available to it from
withholding taxes (whether available by treaty or existing administrative
waiver), and (ii) to the extent reasonable and without material cost to it,
otherwise cooperate with the Guarantor to minimize any amounts payable by the
Guarantor under this Section.
If the Guarantor is required to pay additional amounts to or
for the account of any Lender pursuant to this section 17.6, then such Lender
will change the jurisdiction of its Applicable Lending Office so as to eliminate
or reduce any such additional payment which may thereafter accrue if such
change, in the judgment of such Lender, would not impose material cost on such
Lender and is not otherwise disadvantageous to such Lender.
17.6.5 The provisions of this Section 17.6 shall survive the
termination of the Agreement and the repayment of all Advances and Bid Advances
and all Money Market Loans.
ARTICLE 18
MISCELLANEOUS
18.1 Severability
Any provision of this Agreement which is or becomes prohibited or
unenforceable in any jurisdiction shall not invalidate, affect or impair the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction does not invalidate or render unenforceable any such provision in
any other jurisdiction.
18.2 Amendments, Waivers. Etc.
Except as specifically provided in Section 15.12, no amendment,
modification or waiver of any provision of, and no waiver of the strict
observance, performance or compliance by the Borrower or each of the Guarantors
with any term, covenant, condition or agreement contained in this Agreement and
no indulgence granted by the Administrative Agent or the Lenders or consent to
any departure by the Borrower or any of the Guarantors therefrom, shall in any
event be effective unless it shall be in writing and signed by, as the case may
be, the Majority Lenders or the Administrative Agent on behalf of the Lenders or
the Majority Lenders, as required, and the Borrower and each of the Guarantors,
and then such amendment, modification, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it is given.
18.3 Direct Obligation
Notwithstanding any other provision hereof, the Borrower shall be
obligated directly towards each of the Lenders in respect of the Participation
of each of the Lenders as well as any other amounts which may be payable by the
Borrower pursuant to or in connection with this Agreement or any Borrowings. The
obligations of each of the Lenders are independent from one another, are not
joint, and may not be increased, reduced, extinguished or otherwise affected due
to the default of another Lender pursuant hereto. Any default of any party
hereto in the performance of its obligations shall not release any of the other
parties hereto from the performance of any of their respective obligations.
18.4 Sharing of Information
The Borrower and each of the Guarantors agrees that the Administrative
Agent and the Lenders may share amongst themselves any information which any of
them may possess concerning the Borrower or any of the Guarantors in respect of
the Borrower's and each of the Guarantors' undertakings, obligations or
indebtedness towards any Lender pursuant to this Agreement or otherwise, as well
as any payment received from the Borrower or any of the Guarantors by any
Lender. Without limiting the generality of the foregoing, the Administrative
Agent may disclose to any Lender and the Borrower and any of the Guarantors any
information contained in any notices, consents, certificates, documents or other
instruments or writings delivered to it under or pursuant to this Agreement.
18.5 Term of Agreement
This Agreement shall continue in full force and effect until both the
Total Commitment of the Lenders has terminated and all Obligations (other than
inchoate indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen) of the Borrower and each of the
Guarantors under or pursuant to this Agreement have been indefeasibly paid and
satisfied in full.
18.6 Further Assurances
The Borrower and each of the Guarantors agrees to do, execute,
acknowledge, deliver or cause to be done, executed, acknowledged or delivered
all such further acts, deeds, documents, opinions and assurances as may be
reasonably requested by the Administrative Agent or any Lender from time to time
during the term hereof for the purpose of effecting the transactions
contemplated hereby.
18.7 Execution in Counterparts
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement.
18.8 [Intentionally Omitted]
18.9 Whole Agreement
This Agreement and the letters referred to in Sections 5.7 and 5.9 in
regard to the underwriting fee and administrative fee constitute the whole
agreement between the parties in respect of the Credit and the Bid Loans, and as
and from the date of this Agreement cancel and supersede any other prior
agreements, undertakings, declarations and representations, written or oral, in
respect thereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective representatives thereunto duly authorized as of the
date first above written.
GRAND TRUNK CORPORATION,
as Borrower
By: /s/ Sean Finn
------------------------------------------
Sean Finn
Treasurer and Principal Tax Counsel
Notice Address:
935 de La Gauchetiere West, 3rd Floor
Montreal, Quebec
H3B 2M9
Attention: Treasurer
Telecopier: (514) 399-4854
<PAGE>
CANADIAN NATIONAL RAILWAY COMPANY,
as Company and as a Guarantor
By: /s/ Sean Finn
------------------------------------------
Sean Finn
Treasurer and Principal Tax Counsel
GRAND TRUNK WESTERN RAILROAD
INCORPORATED,
as a Guarantor
By: /s/ Sean Finn
------------------------------------------
Sean Finn
Treasurer and Principal Tax Counsel
DULUTH, WINNIPEG AND PACIFIC RAILWAY
COMPANY,
as a Guarantor
By: /s/ Sean Finn
------------------------------------------
Sean Finn
Treasurer and Principal Tax Counsel
ST. CLAIR TUNNEL COMPANY,
as a Guarantor
By: /s/ Sean Finn
------------------------------------------
Sean Finn
Treasurer and Principal Tax Counsel
CANADIAN NATIONAL RAILWAY PROPERTIES,
INC., as a Guarantor
By: /s/ Sean Finn
------------------------------------------
Sean Finn
Treasurer and Principal Tax Counsel
Notice Address for the Guarantors:
935 de La Gauchetiere West, 3rd Floor
Montreal, Quebec
H3B 2M9
Attention: Treasurer
Telecopier: (514) 399-4854
<PAGE>
BANK OF MONTREAL
as Administrative Agent and Repayment Agent
By: /s/ Glenn Rourke
------------------------------------------
Authorized Signing Officer
By: /s/ Denis LaFramboise
------------------------------------------
Authorized Signing Officer
Notice Address:
After Sales
100 King Street West
22nd Floor, F.C.P.
Toronto, Ontario
M5X lA1
Attention: Manager Loan Agency
Telecopier: (416) 867-5718
BANK OF MONTREAL,
as an Arranger and as a Lender
By: /s/ Glenn Rourke
------------------------------------------
Authorized Signing Officer
By: /s/ Denis LaFramboise
------------------------------------------
Authorized Signing Officer
Notice Address for Bank of Montreal:
129, rue St-Jacques
12th Floor
Montreal, Quebec
H2Y 1L6
Attention: Director
Telecopier: (514) 877-6933
<PAGE>
GOLDMAN SACHS CREDIT PARTNERS L.P.
as an Arranger and as a Lender
By: /s/ Ed Forst
------------------------------------------
Authorized Signatory
Notice Address:
85 Broad Street
New York, New York 10004
Attention: Stephen King
Telephone: 212-902-8123
Telecopier: 212-357-3000
with a copy to:
85 Broad Street
New York, New York 10004
Attention: John Makrinos
Telephone: 212-902-5977
Telecopier: 212-357-4597
<PAGE>
THE BANK OF NOVA SCOTIA,
as a Co-Documentation Agent and as a Lender
By: /s/ Raymond Trempe
------------------------------------------
Name: Raymond Trempe
Title: Senior Manager
Notice Address:
1002, Sherbrooke Street West
Montreal, Quebec H3A 3M3
Telephone: 514-499-5664
Facsimile: 514-499-5504
<PAGE>
NBD BANK,
as a Co-Documentation Agent and as a Lender
By: /s/ Daniel J. Thomson
------------------------------------------
Name: Daniel J. Thomson
Title: First Vice President
By: /s/ Richard L. Janisee
------------------------------------------
Name: Richard L. Janisee
Title: First Vice President
Notice Address:
611 Woodward Avenue
Detroit, Michigan 48226
Attention: Daniel J. Thomson
Telephone: 313-225-1044
Facsimile: 313-225-1689
<PAGE>
BANKBOSTON, N.A.,
as a Lender
By: /s/ Mark Fawcett
------------------------------------------
Name: Mark Fawcett
Title: Vice President
Notice Address:
100 Federal Street
Mailcode 01-08-01
Boston, Massachusetts 02110
Telephone: 617-434-7495
Facsimile: 617-434-1955
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as a Lender
By: /s/ Denis Caldera
------------------------------------------
Name: Denis Caldera
Title: Vice President
Notice Addresses:
200 Front Street West, Suite 2700
Toronto, Ontario M5V 3L2
Attention: Gregory B. Vit
Telephone: 416-349-4095
Facsimile: 416-349-4283
1250 Rene-Levesque Blvd. Ouest
Suite 4335
Montreal, Quebec H3B 4W8
Attention: Charline Didierjean
Telephone: 514-938-1600 (X5072)
Facsimile: 514-938-1601
<PAGE>
BANCA COMMERCIALE ITALIANA,
as a Lender
By: /s/ Guido La Via
------------------------------------------
Name: Guido La Via
Title: Vice President
By: /s/ Julian Teodori
------------------------------------------
Name: Julian Teodori
Title: Senior Vice President & Branch Manager
Notice Address:
150 North Michigan Avenue, Suite 1500
Chicago, Illinois 60601
Attention: Guido La Via
Telephone: 312-456-2505
Facsimile: 212-346-5758
<PAGE>
THE CHASE MANHATTAN BANK,
as a Lender
By: /s/ Julie Long
------------------------------------------
Name: Julie Long
Title: Vice President
Notice Address:
270 Park Ave., 47th Floor
New York, New York 10017-2070
Telephone: 212-270-1053
Facsimile: 212-972-9854
<PAGE>
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<PAGE>
FIRST UNION NATIONAL BANK,
as a Lender
By: /s/ John Reid
------------------------------------------
Name: John Reid
Title: Vice President
Notice Address:
301 South College Street
Charlotte, North Carolina 28288
Telephone: 704-383-9214
Facsimile: 704-383-7037
<PAGE>
FLEET NATIONAL BANK,
as a Lender
By: /s/ G. Steven Kalin
------------------------------------------
Name: G. Steven Kalin
Title: Vice President
Notice Address:
One Landmark Square
Stamford, Connecticut 06904
Telephone: 203-358-2013
Facsimile: 203-358-6111
<PAGE>
[This page intentionally left blank]
<PAGE>
JP MORGAN,
as a Lender
By: /s/ Chris Kunhardt
------------------------------------------
Name: Chris Kunhardt
Title: Vice President
Notice Address:
60 Wall Street
New York, New York 10260
Telephone: 212-648-7078
Facsimile: 212-648-5336
<PAGE>
[This page intentionally left blank]
<PAGE>
[This page intentionally left blank]
<PAGE>
SUNTRUST BANK, ATLANTA,
as a Lender
By: /s/ Shelley M. Browne
------------------------------------------
Name: Shelley M. Browne
Title: Vice President
By: /s/ Margaret A. Jaketic
------------------------------------------
Name: Margaret A. Jaketic
Title: Vice President
Notice Address:
25 Park Place, 24th Floor
Atlanta, Georgia 30303
Telephone: 404-230-5224
Facsimile: 404-588-8505
<PAGE>
BAYERISCHE-LANDESBANK,
as a Lender
By: /s/ Wilfried Freudenberger
------------------------------------------
Name: Wilfried Freudenberger
Title: Executive Vice President and General Manager
By: /s/ Peter Obermann
------------------------------------------
Name: Peter Obermann
Title: Senior Vice President
Notice Address:
560 Lexington Ave., 17th Floor
New York, New York 10022
Telephone: 212-310-9816
Facsimile: 212-310-9868
<PAGE>
[This page intentionally left blank]
<PAGE>
WESTDEUTSCHE LANDESBANK
GIROZENTRALE,
as a Lender
By: /s/ Salvatore Battinelli
------------------------------------------
Name: Salvatore Battinelli
Title: Vice-President
By: /s/ Elisabeth Wilds
------------------------------------------
Name: Elisabeth Wilds
Title: Associate
Notice Address:
1211 Avenue of the Americas
23rd Floor
New York, New York 10036
Telephone: 212-852-6322
Facsimile: 212-852-6148
