<PAGE> 1
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): AUGUST 27, 1996
(AUGUST 22, 1996)
OUTDOOR SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-28256 86-0736400
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2502 NORTH BLACK CANYON HIGHWAY, PHOENIX, ARIZONA 85009
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 246-9569
NOT APPLICABLE
(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS
Pursuant to the Asset Purchase Agreement dated July 9, 1996 with
Gannett Co., Inc. ("Gannett") and certain of its direct and indirect
subsidiaries named therein, as amended (the "Asset Purchase Agreement"), on
August 22, 1996 the Registrant completed the acquisition (the "Acquisition") of
substantially all of the assets of the outdoor advertising division of Gannett
for a purchase price of approximately $700 million in cash. In addition, the
Registrant exercised its option to purchase the outdoor operations of Gannett
Outdoor Co. of Texas, Inc., a subsidiary of Gannett, located in Houston, Texas
for approximately $10 million in cash. The consummation of the acquisition of
the Houston assets is subject to certain conditions including the expiration or
early termination of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.
The Registrant financed the purchase price paid in the Acquisition, the
fees and expenses associated with the Acquisition and the related financing and
the retirement or refinancing of certain existing indebtedness through: (i)
approximately $241 million in net proceeds from the sale of Common Stock in a
public offering consummated concurrently with the closing of the Acquisition;
(ii) revolving credit (including issued letters of credit) and term loans of
approximately US$444 million and C$65 million under its senior credit facility;
and (iii) $180 million of bridge loans under its subordinated credit facility.
In connection with the closing of the Acquisition and the related
financing, the Registrant completed the tender offer and consent solicitation
for its outstanding 10-3/4% Senior Notes due 2003 (the "Existing Notes"), and
paid total consideration of $1,116.25 per $1,000.00 principal amount, plus
accrued and unpaid interest up to, but not including, August 22, 1996. Holders
of all of the Company's outstanding Existing Notes except for $15,000 aggregate
principal amount thereof validly tendered their Existing Notes and consented to
amendments to the indenture governing the Existing Notes required to facilitate
the Acquisition and related financing. The Registrant entered into a
supplemental indenture dated as of August 22, 1996 reflecting the amendments to
the indenture.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
99.1. Amendment No. 1 to Asset Purchase Agreement among
Gannett Co., Inc., Combined Communications
Corporation, Gannett Transit, Inc., Shelter Media
Communications, Inc., Gannett International
Communications, Inc., and the Registrant dated as of
August 12, 1996.
99.2. Amendment No. 2 to Asset Purchase Agreement among
Gannett Co., Inc., Combined Communications
Corporation, Gannett Transit, Inc., Shelter Media
Communications, Inc., Gannett International
Communications, Inc., and the Registrant dated as of
August 19, 1996.
99.3. Underwriting Agreement dated August 19, 1996 by and
among the Registrant and Alex. Brown & Sons
Incorporated, CIBC Wood Gundy Securities Corp. and
Donaldson, Lufkin & Jenrette Securities Corporation.
99.4. Third Amended and Restated Credit Agreement dated
August 22, 1996 by and among the Registrant, Canadian
Imperial Bank of Commerce and the other financial
institution parties thereto.
99.5. First Supplemental Indenture dated as of August 22,
1996 by and between the Registrant and United States
Trust Company of New York.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 27, 1996 OUTDOOR SYSTEMS, INC.
By: /s/ Bill M. Beverage
----------------------------------
Name: Bill M. Beverage
-------------------------
Title: Chief Financial Officer,
-------------------------
Treasurer and Secretary
-------------------------
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
99.1. Amendment No. 1 to Asset Purchase Agreement among Gannett Co.,
Inc., Combined Communications Corporation, Gannett Transit, Inc.,
Shelter Media Communications, Inc., Gannett International
Communications, Inc., and the Registrant dated as of August 12, 1996.
99.2. Amendment No. 2 to Asset Purchase Agreement among Gannett Co., Inc.,
Combined Communications Corporation, Gannett Transit, Inc., Shelter
Media Communications, Inc., Gannett International Communications,
Inc., and the Registrant dated as of August 19, 1996.
99.3. Underwriting Agreement dated August 19, 1996 by and among the
Registrant and Alex. Brown & Sons Incorporated, CIBC Wood Gundy
Securities Corp. and Donaldson, Lufkin & Jenrette Securities
Corporation.
99.4 Third Amended and Restated Credit Agreement dated August 22, 1996 by
and among the Registrant, Canadian Imperial Bank of Commerce and the
other financial institution parties thereto.
99.5 First Supplemental Indenture dated as of August 22, 1996 by and
between the Registrant and United States Trust Company of New York.
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EXHIBIT 99.1
AMENDMENT NO. 1
TO
ASSET PURCHASE AGREEMENT
AMONG
GANNETT CO., INC.
COMBINED COMMUNICATIONS CORPORATION,
GANNETT TRANSIT, INC.,
SHELTER MEDIA COMMUNICATIONS, INC.,
GANNETT INTERNATIONAL COMMUNICATIONS, INC.,
AND
OUTDOOR SYSTEMS, INC.,
DATED JULY 9, 1996
("ASSET PURCHASE AGREEMENT")
This Amendment No. 1 is made as of August 12, 1996 among the
undersigned parties to the Asset Purchase Agreement. Unless otherwise defined
herein, all capitalized terms used herein shall have the meanings ascribed to
such terms in the Asset Purchase Agreement. The undersigned wish to amend the
Asset Purchase Agreement to change the Closing Date, and in consideration of
the mutual covenants agree as follows:
1. Section 2.1 of the Asset Purchase Agreement is amended to read
in its entirety as follows:
"2.1 Time and Place of Closing. The closing (the "Closing") of
the sale and purchase of the Assets and the Shares shall be held
in the offices of Gannett at 1100 Wilson Boulevard, Arlington,
Virginia 22234 on the date (the "Closing Date") that is the
later of (i) August 26, 1996 or (ii) such other time and place
as shall be mutually agreed upon by the parties."
2. Upon the delivery of assignment documentation acceptable to
Sellers on or prior to the Closing Date, Sellers hereby consent to the
assignment by Buyer of its right to purchase the shares of stock of Mediacom
Inc. and to assume liabilities under the Asset Purchase Agreement related to
Mediacom Inc. to 3284085 Canada Inc., a wholly owned subsidiary organized under
the laws of Canada or a province thereof; provided, however, that the
assignment and assumption shall in no way relieve or release Buyer from its
obligations under the Asset Purchase Agreement, and the Purchase Price shall be
paid at Closing in a single wire transfer to Gannett Co., Inc.
3. The terms of this Amendment No. 1 shall be in addition to and
shall in no way impair the full force and effect of the Asset Purchase
Agreement (except as specifically amended herein).
4. This Amendment No. 1 may be executed by the parties in as many
counterparts as may be deemed necessary and convenient and by the different
parties on separate counterparts, each of which, when so executed, shall be
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deemed an original, but all such counterparts shall constitute but one and the
same instrument.
5. This Amendment No. 1 shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 as
of the date first above written.
GANNETT INTERNATIONAL GANNETT CO., INC.
COMMUNICATIONS, INC.
By: /s/ Douglas H. McCorkindale By: /s/ Douglas H. McCorkindale
_______________________ ____________________________
Douglas H. McCorkindale Douglas H. McCorkindale
President Vice Chairman
OUTDOOR SYSTEMS, INC. COMBINED COMMUNICATIONS
CORPORATION
By: /s/ William S. Levine By: /s/ Douglas H. McCorkindale
___________________________ ____________________________
Douglas H. McCorkindale
Title: Chairman President
________________________
GANNETT TRANSIT, INC.
BY: /s/ Douglas H. McCorkindale
____________________________
Douglas H. McCorkindale
Vice President
SHELTER MEDIA COMMUNICATIONS,
INC.
By: /s/ Douglas H. McCorkindale
____________________________
Douglas H. McCorkindale
Vice President
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EXHIBIT 99.2
AMENDMENT NO. 2
TO
ASSET PURCHASE AGREEMENT
AMONG
GANNETT CO., INC.,
COMBINED COMMUNICATIONS CORPORATION,
GANNETT TRANSIT, INC.,
SHELTER MEDIA COMMUNICATIONS, INC.,
GANNETT INTERNATIONAL COMMUNICATIONS, INC.,
AND
OUTDOOR SYSTEMS, INC.
DATED JULY 9, 1996 AND AMENDED AS OF AUGUST 12, 1996
("ASSET PURCHASE AGREEMENT")
This Amendment No. 2 is made as of August 19, 1996, among the
undersigned parties to the Asset Purchase Agreement. Unless otherwise defined
herein, all capitalized terms used herein shall have the meanings ascribed to
such terms in the Asset Purchase Agreement. The undersigned wish to amend the
Asset Purchase Agreement to change the Closing Date, and in consideration of the
mutual covenants agree as follows:
1. Section 2.1 of the Asset Purchase Agreement is amended by deleting
the term "August 26, 1996" and substituting therefor "August 22, 1996," such
that the section shall in its entirety read as follows:
"2.1. Time and Place of Closing. The closing (the "Closing") of
the sale and purchase of the Assets and the Shares shall be held
in the offices of Gannett at 1100 Wilson Boulevard, Arlington,
Virginia 22234 on the date (the "Closing Date") that is the later
of (i) August 22, 1996 or (ii) such other time and place as shall
be mutually agreed upon by the parties."
2. Notwithstanding anything to the contrary contained in the Asset
Purchase Agreement, for purposes of preparing the Closing Date Balance Sheet and
determining the Purchase Price adjustment (including prorations) pursuant to
Sections 1.4(a), (b) and (c) of the Asset Purchase Agreement, the Closing Date
shall be deemed to be August 23, 1996 and the Closing shall be deemed to have
occurred as of the closing of business on such date. For all other purposes of
the Asset Purchase Agreement, the Closing and the Closing Date shall remain as
defined in Section 2.1.
3. Section 10.2(d) of the Asset Purchase Agreement is amended by
deleting the fifth sentence of such section and by substituting therefor the
following:
For purposes of this Section 10.2(d), employees of the Division
hired by Buyer shall be construed to mean only those employees of
the Division hired by Buyer who remain in the employ of Buyer
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through a date, selected by the Seller, that is no less than
fifteen days prior to the date that the transfer of assets
contemplated herein is effected. The Seller shall provide Buyer
with adequate prior written notice of the date it selects pursuant
to the immediately preceding sentence and Buyer shall identify to
the Seller those employees who continue to be employed by Buyer as
of that date.
4. The terms of this Amendment No. 2 shall be in addition to and
shall in no way impair the full force and effect of the Asset Purchase Agreement
(except as specifically amended herein).
5. This Amendment No. 2 may be executed by the parties in as many
counterparts as may be deemed necessary and convenient and by the different
parties on separate counterparts, each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute but one and the
same instrument.
6. This Amendment No. 2 shall be governed by and construed in
accordance with the laws of the state of Delaware.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment No.
2 as of the date first above written.
GANNETT INTERNATIONAL GANNETT CO., INC.
COMMUNICATIONS, INC.
By:/s/ Jimmy L. Thomas By:/s/ Jimmy L. Thomas
-------------------------------- ---------------------------------
Jimmy L. Thomas Jimmy L. Thomas
Vice President and Treasurer Senior Vice President/Financial
Services and Treasurer
OUTDOOR SYSTEMS, INC. COMBINED COMMUNICATIONS
CORPORATION
By:/s/ William S. Levine By:/s/ Jimmy L. Thomas
-------------------------------- ---------------------------------
William S. Levine Jimmy L. Thomas
Chairman Vice President and Treasurer
GANNETT TRANSIT, INC.
By:/s/ Jimmy L. Thomas
---------------------------------
Jimmy L. Thomas
Treasurer
SHELTER MEDIA
COMMUNICATIONS, INC.
By:/s/ Jimmy L. Thomas
---------------------------------
Jimmy L. Thomas
Treasurer
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EXHIBIT 99.3
8,600,000 Shares
OUTDOOR SYSTEMS, INC.
Common Stock
(Par Value $.01 per share)
UNDERWRITING AGREEMENT
August 19, 1996
ALEX. BROWN & SONS INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
CIBC WOOD GUNDY SECURITIES CORP.
c/o ALEX. BROWN & SONS INCORPORATED
135 East Baltimore Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
Outdoor Systems, Inc., a Delaware corporation (the "Company") and the
Selling Shareholders listed on Schedule II, propose to sell to the several
underwriters (the "Underwriters") named in Schedule I hereto for whom you are
acting as representatives (the "Representatives") an aggregate of 8,600,000
shares of the Company's Common Stock, par value $.01 per share (the "Firm
Shares"), of which 7,300,000 shares will be sold by the Company and 1,300,000
will be sold by the Selling Shareholders. The respective amounts of the Firm
Shares to be so purchased by the several Underwriters are set forth opposite
their names in Schedule I hereto. The Company also proposes to sell at the
Underwriters' option an aggregate of up to 1,290,000 additional shares of the
Company's Common Stock (the "Option Shares") as set forth below.
As the Representatives, you have advised the Company (a) that you are
authorized to enter into this Agreement on behalf of the several Underwriters,
and (b) that the several Underwriters are willing, acting severally and not
jointly, to purchase the numbers of Firm Shares set forth opposite their
respective names in Schedule I, plus their pro rata portion of the Option Shares
if
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you elect to exercise the over-allotment option in whole or in part for the
accounts of the several Underwriters. The Firm Shares and the Option Shares (to
the extent the aforementioned option is exercised) are herein collectively
called the "Shares." Capitalized terms not otherwise defined herein are used as
defined in the Registration Statement (as hereinafter defined). If the
Underwriters listed on Schedule I only include the Representatives, then
references herein to the Representatives shall mean the Underwriters.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. Representations and Warranties of the Company.
(a) The Company represents and warrants as follows:
(i) A registration statement on Form S-3 (File No. 333-09545)
with respect to the Shares has been prepared by the Company in conformity with
the requirements of the Securities Act of 1933, as amended (the "Act"), and the
Rules and Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission under the Act. The Company has complied with the conditions for the
use of Form S-3. Copies of such registration statement, including any amendments
thereto, the preliminary prospectuses contained therein and the exhibits,
financial statements and schedules, as finally amended and revised, have
heretofore been delivered by the Company to you. Such registration statement,
together with any registration statement filed pursuant to Rule 462(b), herein
referred to as the "Registration Statement," which shall be deemed to include
all information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, has been declared effective by the Commission
under the Act and no post-effective amendment to the Registration Statement has
been filed as of the date of this Agreement. The form of prospectus first filed
by the Company with the Commission pursuant to its Rule 424(b) is herein
referred to as the "Prospectus." Each preliminary prospectus included in the
Registration Statement prior to the time it becomes effective is herein referred
to as a "Preliminary Prospectus." Any reference herein to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein, as of the date
of such Registration Statement, Preliminary Prospectus or Prospectus, as the
case may be, and, in the case of any reference herein to any Prospectus, also
shall be deemed to include any documents incorporated by reference therein, and
any supplements or amendments relating to the Shares being issued and sold
pursuant hereto, filed with the Commission after the date of filing of the
Prospectus under Rules 434(b) or 430A, and prior to the termination of the
offering of the Shares by the Underwriters.
(ii) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement; the
subsidiaries listed on Schedule III hereto (the "Subsidiaries") will be, after
the Acquisition, the only subsidiaries of the Company; the Subsidiaries have
been duly organized and are validly existing as corporations in good standing
under the laws of their jurisdiction of organization, with corporate power and
authority to own or lease their properties and conduct their business as
described in the Registration Statement. The Company and the Subsidiaries are
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duly qualified to transact business in all jurisdictions in which the conduct of
their business requires such qualification; the outstanding shares of capital
stock of the Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable; and all of the shares of capital stock of the
Subsidiaries are owned by the Company (or will be so owned after the
Acquisition, free and clear of all liens, encumbrances and security interests
(other than as described in the Registration Statement), and no options,
warrants or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into shares of capital stock or
ownership interests of the Subsidiaries are outstanding. Except for the
Subsidiaries and investments in securities as described in the Registration
Statement, the Company has no equity or other interest in, or right to acquire
an equity or other interest in, any corporation, partnership, trust or other
entity.
(iii) The outstanding shares of Common Stock of the Company,
including the Shares to be sold by the Selling Shareholders, have been duly
authorized and validly issued and are fully paid and non-assessable; the Shares
to be issued and sold by the Company have been duly authorized and when issued
and paid for as contemplated herein will be validly issued, fully-paid and
non-assessable; and no preemptive rights of stockholders exist with respect to
any of the Shares or the issue and sale thereof.
(iv) The Shares conform with the statements concerning them
in the Registration Statement.
(v) The Commission has not issued an order preventing or
suspending the use of any Prospectus or Preliminary Prospectus relating to the
proposed offering of the Shares nor instituted proceedings for that purpose. The
Registration Statement contains and the Prospectus and any amendments or
supplements thereto will contain all statements which are required to be stated
therein by, and in all respects conform or will conform, as the case may be, to
the requirements of, the Act and the Rules and Regulations. The documents
incorporated by reference in the Prospectus, at the time they were filed or will
be filed with the Commission, conformed or will conform at the time of filing,
in all respects to the requirements of the Securities Exchange Act of 1934 or
the Act, as applicable, and the Rules and Regulations of the Commission
thereunder. Neither the Registration Statement nor any amendment thereto, and
neither the Prospectus nor any supplement thereto, including any documents
incorporated by reference therein, contains or will contain, as the case may be,
any untrue statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations or
warranties as to information contained in or omitted from the Registration
Statement or the Prospectus, or incorporated by reference or any such amendment
or supplement or any documents incorporated by reference therein, in reliance
upon, and in conformity with, written information furnished to the Company by or
on behalf of the Selling Shareholders or any Underwriter through the
Representatives, specifically for use in the preparation thereof.
(vi) The consolidated financial statements of the Company
and its subsidiaries, together with related notes and schedules, as set forth or
incorporated by reference in the Registration Statement, present fairly the
consolidated financial position and the consolidated
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results of operations of the Company and its subsidiaries at the indicated dates
and for the indicated periods. The combined financial statements of Gannett
Outdoor, together with related notes and schedules, as set forth or incorporated
by reference in the Registration Statement, present fairly the combined
statements of net assets to be acquired and the combined statements of revenue
and direct expenses of net assets of Gannett Outdoor at the indicated dates and
for the indicated periods. The consolidated statements of operations of Capitol
Outdoor Advertising, Inc. ("Capitol Outdoor") and its subsidiary, together with
related notes and schedules, as set forth or incorporated by reference in the
Registration Statement, present fairly the combined statements of operations of
Capitol Outdoor and its subsidiary at the indicated dates and for the indicated
periods. All such financial statements have been prepared in accordance with
generally accepted principles of accounting, consistently applied throughout the
periods involved, and all adjustments necessary for a fair presentation of
results for such periods have been made. The summary and selected financial and
statistical data included or incorporated by reference in the Registration
Statement present fairly the information shown therein and have been compiled on
a basis consistent with the financial statements presented therein.
(vii) The Pro Forma Financial Statements and other pro forma
financial information of the Company included in the Prospectus and incorporated
by reference in the Registration Statement have been prepared in accordance with
the Commission's rules and guidelines with respect to pro forma financial
statements, have been properly compiled on the pro forma basis described
therein, and, in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(viii) The documents filed by the Company with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), at the time filed with the Commission, conformed in all material respects
to the requirements of the Exchange Act, and such documents at the time of such
filing did not, and as of the date hereof do not, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary or make the statements therein not misleading.
(ix) There is no action or proceeding pending or, to the
knowledge of the Company, threatened against the Company, the Subsidiaries or
Gannett Outdoor before any court or administrative agency or by any regulatory
authority which might result in any material adverse change in the business or
condition of the Company and the Subsidiaries, except as set forth in the
Registration Statement.
(x) The Company and the Subsidiaries have good and
marketable title to all of the properties and assets reflected in the financial
statements (or as described in the Registration Statement) hereinabove
described, subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except those reflected in such financial statements (or as described in the
Registration Statement) or which are not material in amount. The Company and the
Subsidiaries occupy their leased properties under valid and binding leases
conforming to the description thereof set forth in the Registration Statement.
(xi) The Company and the Subsidiaries have filed all
Federal, State and foreign income tax returns which have been required to be
filed and have paid all taxes indicated by said
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returns and all assessments received by them or any of them to the extent that
such taxes have become due and are not being contested in good faith.
(xii) Since the respective dates as of which information is
given in the Registration Statement, as it may be amended or supplemented, there
has not been any material adverse change or any development involving a
prospective material adverse change in or affecting the condition, financial or
otherwise, of the Company and the Subsidiaries taken as a whole or the earnings,
business affairs, management, or business prospects of the Company and the
Subsidiaries taken as a whole, whether or not occurring in the ordinary course
of business, and there has not been any material transaction entered into by the
Company or any of the Subsidiaries other than transactions in the ordinary
course of business and changes and transactions contemplated by the Registration
Statement, as it may be amended or supplemented. The Company and the
Subsidiaries have no material contingent obligations which are not disclosed in
the Registration Statement, as it may be amended or supplemented.
(xiii) Neither the Company nor any of the Subsidiaries is,
nor with the giving of notice, lapse of time or both, will be, in default under
its Certificate of Incorporation or ByLaws or any agreement, lease, contract,
indenture or other instrument or obligation to which it is a party or by which
it or any of its properties is bound and which default is of material
significance in respect of the business or financial condition of the Company
and the Subsidiaries taken as a whole. The consummation of the transactions
contemplated by this Agreement and the Transaction Documents (as hereinafter
defined) and the fulfillment of the terms hereof and thereof will not conflict
with or result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which they will become a patty as a result of the Acquisition and the financing
thereof, or of the Charter or ByLaws of the Company or the Subsidiaries or any
order, rule or regulation applicable to the Company or any of the Subsidiaries
of any court or of any regulatory body or administrative agency or other
governmental body having jurisdiction which conflict, breach or default would be
of material significance in respect of the business or financial condition of
the Company and the Subsidiaries, taken as a whole.
(xiv) Except for (a) the transfer to the Company or its
appropriate Subsidiaries, or the reissuance in the name of the Company or its
appropriate Subsidiaries, of certain governmental permits relating to the
advertising displays included in the Acquisition, and (b) governmental
authorizations, approvals and filings required in connection with the
acquisition by the Company or its Subsidiaries of the capital stock of New York
Subways Advertising Co., Inc. (the "New York Subsidiary"), to be acquired by the
Company after the Acquisition, each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and delivery
by the Company of this Agreement or the Transaction Documents and the
consummation of the transactions herein or therein contemplated (except such
additional steps as may be required by the National Association of Securities
Dealers, Inc. (the "NASD") or may be necessary to qualify the Shares for public
offering by the Underwriters under State securities or Blue Sky laws) has been
obtained or made and is in full force and effect or, in the case of the
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Transaction Documents and the transactions therein contemplated, will be
obtained and be in full force and effect as of the Closing Date.
(xv) The Company and each of the Subsidiaries hold all
material licenses, consents, authorizations, approvals, orders, certificates and
permits (collectively, "Licenses") of and from, and has made all declarations
and filings with and satisfied all eligibility and other similar requirements
imposed by, all federal, state, local, foreign and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, in each case as required for the conduct of the business in which it
is engaged, and each such License is in full force and effect, except to the
extent that the failure to obtain any such License or to make any such
declaration or filing or satisfy any such requirement would not have a material
adverse effect on the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
(xvi) The Company and the Subsidiaries are in compliance
with all applicable federal, state, foreign and local laws and regulations
relating to (i) zoning, land use, protection of the environment, human health
and safety or hazardous or toxic substances, wastes, pollutants or contaminants
and (ii) employee or occupational safety, discrimination in hiring, promotion or
pay of employees, employee hours and wages or employee benefits, except where
such noncompliance would not, singly or in the aggregate, have a material
adverse effect upon the Company and its subsidiaries taken as a whole.
(xvii) Deloitte & Touche LLP, who have certified the
financial statements filed with the Commission as part of, or incorporated by
reference in, the Registration Statement, are independent public accountants as
required by the Act and the Rules and Regulations.
(xviii) The Company has never been, is not now, and
immediately after the sale of the Shares under this Agreement will not be, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
(xix) The Shares of the Company to be sold under this
Agreement (subject to the additional approval of the shares being registered
pursuant to Rule 462(b)) have been approved for listing on the Nasdaq National
Market subject to official notice of issuance.
(xx) The Asset Purchase Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and legally
binding obligation of the Company, enforceable in accordance with its terms; to
the knowledge of the Company, all of the conditions required to be satisfied for
purposes of closing the Acquisition (including, without limitation, the
conditions set forth in Sections 7.3 and 8.4 of the Asset Purchase Agreement)
have been or will be on or prior to the Closing Date satisfied or waived; and
the Company knows of no reason why the Acquisition will not be consummated as
described in the Prospectus simultaneously with the closing under this
Agreement, except that the acquisition by the Company of the capital stock of
the New York Subsidiary may be delayed pending receipt of requisite approvals
from the governmental authorities.
(xxi) The Second Amended and Restated Senior Credit
Agreement dated as of July 9, 1996, as amended, among the Company, the several
banks and other financial institutions parties thereto and Canadian Imperial
Bank of Commerce ("CIBC"), as administrative agent for the lenders (the "Senior
Credit Agreement"), has been duly authorized, executed and delivered
- 6 -
<PAGE> 7
by the Company and constitutes a valid and legally binding obligation of the
Company, enforceable in accordance with its terms; the Senior Subordinated
Credit Agreement dated as of July 9, 1996 among the Company, the subsidiary
guarantors, CIBC, Inc. as the sole initial lender and CIBC as agent for the
bridge lenders (the "Subordinated Credit Agreement") has been duly authorized,
executed and delivered and constitutes a valid and legally binding obligation of
the Company, enforceable in accordance with its terms; all of the conditions for
funding under the Senior Credit Facility and Subordinated Credit Facility have
been satisfied or are capable of being satisfied on or before the Closing Date;
and the Company has no reason to believe that funds will not be advanced under
the Senior Credit Facility and the Subordinated Credit Facility on the Closing
Date in amounts contemplated by the Prospectus and sufficient to permit
consummation of the Acquisition.
(xxii) Pursuant to the terms of the Debt Tender Offer, 99.9%
of the Existing Notes have been tendered together with consents from the holders
of such Existing Notes to the modification of the provisions of the indenture
governing the Existing Notes to permit the consummation of the Acquisition and
the Acquisition Financing.
(xxiii) The Company has consummated the Denver Disposition in
accordance with the terms set forth in the Prospectus.
(xxiv) The Company has no reason to believe that any of the
representations and warranties made to the Company by Gannett Outdoor in the
Asset Purchase Agreement was untrue in any material respect as of the date given
by Gannett Outdoor or as of the date hereof or the Closing Date, and the Company
reaffirms for the benefit of the underwriters the representations and warranties
made by the Company to Gannett Outdoor in the Asset Purchase Agreement.
(xxv) The Company reaffirms all of the representations and
warranties set forth in subparagraphs (i) through (xvi) above assuming and
giving effect to the consummation of the Acquisition and assuming for purposes
of such representations and warranties that references to the Company and its
subsidiaries would include the Company as it will exist after consummation of
the Acquisition.
(b) Each of the Selling Shareholders severally represents and
warrants as follows:
(i) Such Selling Shareholder now has and at the Closing
Date will have good and marketable title to the Shares to be sold by such
Selling Shareholder, free of any liens, encumbrances, equities and claims, and
full right, power and authority to effect the sale and delivery of such Shares;
and upon the delivery of and payment for such Shares pursuant to this Agreement,
the Underwriters will acquire good and marketable title thereto, free of any
liens, encumbrances, equities and claims.
(ii) Such Selling Shareholder has full right, power and
authority to execute and deliver this Agreement, the Power of Attorney and the
Custodian Agreement referred to below and to perform his or its obligations
under such Agreements. The execution and delivery of this Agreement and the
consummation by such Selling Shareholder of the transactions contemplated herein
will not result in a breach of any of the terms and provisions of, or constitute
a default under, any indenture, mortgage, deed of trust or other agreement or
instrument to which such Selling Shareholder is a party, or of any order, rule
or regulation applicable to such Selling
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<PAGE> 8
Shareholder of any court or of any regulatory body or administrative agency or
other governmental body having jurisdiction.
(iii) Such Selling Shareholder has not taken and will not
take, directly or indirectly, any action designed to result in, or which has
constituted, or which might reasonably be expected to cause or result in,
stabilization or manipulation of the price of the Common Stock of the Company.
(iv) Without having undertaken to determine independently
the accuracy or completeness of either the representations and warranties of the
Company contained herein or the information contained in the Registration
Statement and documents incorporated by reference therein, such Selling
Shareholder has no reason to believe that the representations and warranties of
the Company contained in this Section 1 are not true and correct, is familiar
with the Registration Statement and has no knowledge of any material fact,
condition or information not disclosed in the Registration Statement or the
documents incorporated by reference therein which has adversely affected or may
adversely affect the business of the Company, the Subsidiaries or Gannett
Outdoor; and the sale of the Shares by such Selling Shareholder pursuant hereto
is not prompted by any information concerning the Company or the Subsidiaries
which is not set forth in the Registration Statement or the documents
incorporated by reference therein. The information pertaining to such Selling
Shareholder under the caption "Principal and Selling Stockholders" in the
Prospectus is complete and accurate in all material respects.
(v) No offering, sale or other disposition of any Common
Stock of the Company will be made for a period of 180 days after the date of
this Agreement, directly or indirectly, by such Selling Shareholder otherwise
than hereunder or with the prior written consent of the Representatives.
(vi) The Power of Attorney appointing certain individuals
as such Selling Shareholders' attorney-in-fact to the extent set forth therein
and the Custodian Agreement (as defined in Section 2) have been duly executed
and delivered by such Selling Shareholder and are the valid and binding
agreements of such Selling Shareholder.
In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 and the Interest and Dividend Tax Compliance Act of 1983 with respect to
the transactions herein contemplated, each of the Selling Shareholders agrees to
deliver to you prior to or at the Closing Date a properly completed and executed
United States Treasury Department Form W-9 or Form 8709 (or other applicable
from or statement specified by Treasury Department regulations in lieu thereof).
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<PAGE> 9
2. Purchase, Sale and Delivery of the Firm Shares.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Company
agrees to sell to the Underwriters 7,300,000 of the Firm Shares and the Selling
Shareholders agree to sell to the Underwriters 1,300,000 of the Firm Shares and
each Underwriter agrees, severally and not jointly, to purchase, at a price of
$33.08 per share, the number of Firm Shares set forth opposite the name of each
Underwriter in Schedule I hereof, subject to adjustments in accordance with
Section 9 hereof. The number of Shares to be purchased by each Underwriter from
the Company and each Selling Shareholder shall be as nearly as practicable in
the same proportion to the total number of Shares being sold by each of the
Company and the Selling Shareholders as the number of Shares being purchased by
each Underwriter bears to the total number of Shares to be sold hereunder.
(b) Certificates in negotiable form for the total number of the
Shares to be sold hereunder by the Selling Shareholders have been placed in
custody with First Union National Bank of North Carolina as custodian (the
"Custodian") pursuant to the Custodian Agreement executed by each Selling
Shareholder for delivery of all Firm Shares to be sold hereunder by the Selling
Shareholders. Each of the Selling Shareholders specifically agrees that the Firm
Shares represented by the certificates held in custody for the Selling
Shareholder under the Custodian Agreement are subject to the interests of the
Underwriters hereunder, that the arrangements made by the Selling Shareholders
for such custody are to that extent irrevocable, and that the obligations of the
Selling Shareholders hereunder shall not be terminable by any act or deed of the
Selling Shareholder (or by any other person, firm or corporation including the
Company, the Custodian or the Underwriters) or by operation of law (including
the death of a Selling Shareholder) or by the occurrence of any other event or
events, except as set forth in the Custodian Agreement. If any such event should
occur prior to the delivery to the Underwriters of the Firm Shares hereunder,
certificates for the Firm Shares, as the case may be, shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as if
such event has not occurred. The Custodian is authorized to receive and
acknowledge receipt of the proceeds of sale of the Shares held by it against
delivery of such Shares.
(c) Payment for the Firm Shares to be sold hereunder is to be made
in immediately available funds by wire transfer to the order of the Company for
the Shares to be sold by it and to the order of First Union National Bank of
North Carolina, as Custodian for the Shares to be sold by the Selling
Shareholders, in each case, against delivery of certificates therefor to the
Representatives for the several accounts of the Underwriters. Such payment and
delivery are to be made at the offices of Alex. Brown & Sons Incorporated, 135
East Baltimore Street, Baltimore, Maryland 21202, at 10:00 A.M., Baltimore time,
on the third business day after the date of this Agreement or at such other time
and date not later than three business days thereafter as you and the Company
shall agree upon, such time and date being herein referred to as the "Closing
Date." (As used herein, "business day" means a day on which the New York Stock
Exchange is open for trading and on which banks in New York are open for
business and are not permitted by law or executive order to be closed.) The
certificates for the Firm Shares will be delivered in such denominations and in
such registrations as the Representatives request in writing not later than the
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<PAGE> 10
third full business day prior to the Closing Date, and will be made available
for inspection by the Representatives at least one business day prior to the
Closing Date.
(d) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase the
Option Shares at the price per share as set forth in the first paragraph of this
Section 2. The option granted hereby may be exercised in whole or in part but
only once and at any time upon written notice given within 30 days after the
date of this Agreement, by you, as Representatives of the several Underwriters,
to the Company setting forth the number of Option Shares as to which the several
Underwriters are exercising the option, the names and denominations in which the
Option Shares are to be registered and the time and date at which such
certificates are to be delivered. The time and date at which certificates for
Option Shares are to be delivered shall be determined by the Representatives but
shall not be earlier than three nor later than 10 full business days after the
exercise of such option, nor in any event prior to the Closing Date (such time
and date being herein referred to as the "Option Closing Date"). If the date of
exercise of the option is three or more days before the Closing Date, the notice
of exercise shall set the Closing Date as the Option Closing Date. The number of
Option Shares to be purchased by each Underwriter shall be in the same
proportion to the total number of Option Shares being purchased as the number of
Firm Shares being purchased by such Underwriter bears to 8,600,000, adjusted by
you in such manner as to avoid fractional shares. The option with respect to the
Option Shares granted hereunder may be exercised only to cover over-allotments
in the sale of the Firm Shares by the Underwriters. You, as Representatives of
the several Underwriters, may cancel such option at any time prior to its
expiration by giving written notice of such cancellation to the Company. To the
extent, if any, that the option is exercised, payment for the Option Shares
shall be made on the Option Closing Date in immediately available funds by wire
transfer to the order of the Company against delivery of certificates therefor
at the offices of Alex. Brown & Sons Incorporated, 135 East Baltimore Street,
Baltimore, Maryland 21202.
3. Offering by the Underwriters.
(a) It is understood that the several Underwriters are to make a
public offering of the Firm Shares as soon as the Representatives deem it
advisable to do so. The Firm Shares are to be initially offered to the public at
the initial public offering price set forth in the Prospectus. The
Representatives may from time to time thereafter change the public offering
price and other selling terms. To the extent, if at all, that any Option Shares
are purchased pursuant to Section 2 hereof, the Underwriters will offer them to
the public on the foregoing terms.
It is further understood that you will act as the Representatives for
the Underwriters in the offering and sale of the Shares in accordance with a
Master Agreement Among Underwriters entered into by you and the several other
Underwriters.
4. Covenants of the Company.
(a) The Company covenants and agrees with the several Underwriters
and the Selling Shareholders that:
(i) The Company will (A) prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations a Prospectus
containing information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the Rules
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<PAGE> 11
and Regulations, (B) not file any amendment to the Registration Statement or
supplement to the Prospectus or document incorporated by reference therein of
which the Representatives shall not previously have been advised and furnished
with a copy or to which the Representatives shall have reasonably objected in
writing or which is not in compliance with the Rules and Regulations and (C)
file on a timely basis all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission subsequent to
the date of the Prospectus and prior to the termination of the offering of the
Shares by the Underwriters.
(ii) The Company will advise the Representatives and the
Selling Shareholders promptly of any request of the Commission for amendment of
the Registration Statement or for supplement to the Prospectus or for any
additional information, or of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the use of the
Prospectus or of the institution of any proceedings for that purpose, and the
Company will use its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as soon as
possible the lifting thereof, if issued.
(iii) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws of such
jurisdictions as the Representatives may reasonably have designated in writing
and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, provided the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction where it is not now so
qualified or required to file such a consent. The Company will, from time to
time, prepare and file such statements, reports, and other documents, as are or
may be required to continue such qualifications in effect for so long a period
as the Representatives may reasonably request for distribution of the Shares.
(iv) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary Prospectus
as the Representatives may reasonably request. The Company will deliver to, or
upon the order of, the Representatives during the period when delivery of a
Prospectus is required under the Act, as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the Representatives may
reasonably request. The Company will deliver to the Representatives at or before
the Closing Date, four signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will deliver to
the Representatives such number of copies of the Registration Statement,
including documents incorporated by reference therein, and of all amendments
thereto, as the Representatives may reasonably request.
(v) If during the period in which a prospectus is required
by law to be delivered by an Underwriter or dealer any event shall occur as a
result of which, in the judgment of the Company or in the opinion of counsel for
the Underwriters, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances existing
at the time the Prospectus is delivered to a purchaser, not misleading, or, if
it is necessary at any time to amend or supplement the Prospectus to comply with
any law, the Company promptly will either (A) prepare and file with the
Commission an appropriate amendment to the Registration Statement or supplement
to the Prospectus or (B) prepare and file with the Commission an appropriate
filing under the Securities Exchange Act of 1934 which shall
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<PAGE> 12
be incorporated by reference in the Prospectus so that the Prospectus as so
amended or supplemented will not, in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply with law.
(vi) The Company will make generally available to its
security holders, as soon as it is practicable to do so, but in any event not
later than 15 months after the effective date of the Registration Statement, an
earnings statement (which need not be audited) in reasonable detail, covering a
period of at least 12 consecutive months beginning after the effective date of
the Registration Statement, which earning statement shall satisfy the
requirements of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations and will advise you in writing when such statement has been so made
available.
(vii) The Company will, for a period of five years from the
Closing Date, deliver to the Representatives copies of annual reports and copies
of all other documents, reports and information furnished by the Company to its
stockholders or filed with any securities exchange pursuant to the requirements
of such exchange or with the Commission pursuant to the Act or the Securities
Exchange Act of 1934, as amended. The Company will deliver to the
Representatives similar reports with respect to significant subsidiaries, as
that term is defined in the Rules and Regulations, which are not consolidated in
the Company's financial statements.
(viii) No offering, sale, short sale or other disposition of
any Common Stock of the Company or any other securities convertible or
exchangeable or exercisable for Common Stock or derivatives of Common Stock,
will be made for a period of 180 days after the date of this Agreement, directly
or indirectly, by the Company otherwise than hereunder or with the prior written
consent of the Representatives except that the Company may, without such
consent, issue shares upon the exercise of options outstanding on the date of
this Agreement.
(ix) The Company will use its best efforts to cause the
Acquisition, the Senior Credit Facility and the Subordinated Credit Facility to
close in accordance with the terms described in the Prospectus on the Closing
Date and to satisfy any and all conditions required to be satisfied in
connection therewith.
(b) Each Selling Shareholder, severally and not jointly, covenants
and agrees with the several Underwriters that:
(i) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Interest and Dividend Tax Compliance Act of
1983 with respect to the transactions herein contemplated, each of the Selling
Shareholders agrees to deliver to you prior to or at the Closing Date a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).
(ii) Such Selling Shareholder will not take, directly or
indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization or manipulation
of the price of any securities of the Company.
5. Costs and Expenses. The Company will pay all costs, expenses
and fees incident to the performance of the obligations of the Company and the
Selling Shareholders under this Agreement, including, without limiting the
generality of the foregoing, the following: accounting fees of the Company; the
fees and disbursements of counsel for the Company; the cost of printing
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<PAGE> 13
and delivering to, or as requested by, the Underwriters copies of the
Registration Statement, Preliminary Prospectuses, the Prospectus, this
Agreement, the Agreement Among Underwriters, the Underwriters' Selling
Memorandum, the Underwriters' Questionnaire, the Invitation Letter, the Blue Sky
Survey and any supplements or amendments thereto; the filing fees of the
Commission; the filing fees and expenses incident to securing any required
review by the National Association of Securities Dealers, Inc. (the "NASD") of
the terms of the sale of the Shares; the fees and expenses incurred with respect
to the listing of the Shares on the Nasdaq National Market; and the expenses,
including the fees and disbursements of counsel for the Underwriters, incurred
in connection with the qualification of the Shares under State securities or
Blue Sky laws. The Company shall not, however, be required to pay for any of the
Underwriters' expenses (other than those related to qualification under State
securities or Blue Sky laws) except that, if this Agreement shall not be
consummated because the conditions in Section 7 hereof are not satisfied, or
because this Agreement is terminated by the Representatives pursuant to Section
6 hereof, or by reason of any failure, refusal or inability on the part of the
Company to perform any undertaking or satisfy any condition of this Agreement or
to comply with any of the terms hereof on its part to be performed, unless such
failure to satisfy said condition or to comply with said terms be due to the
default or omission of any Underwriter, then the Company shall reimburse the
several Underwriters for reasonable out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation of performing
their obligations hereunder; but neither the Company nor the Selling
Shareholders shall in any event be liable to any of the several Underwriters for
damages on account of loss of anticipated profits from the sale by them of the
Shares.
6. Conditions of Obligations of the Underwriters. The several
obligations of the Underwriters to purchase the Firm Shares on the Closing Date
and the Option Shares, if any, on the Option Closing Date are subject to the
accuracy, as of the Closing Date or the Option Closing Date, as the case may be,
of the representations and warranties of the Company contained herein, and to
the performance by the Company of its covenants and obligations hereunder and to
the following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule 424
and Rule 430A of the Rules and Regulations shall have been made, and any request
of the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Representatives and
complied with to their reasonable satisfaction. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, shall
have been issued and no proceedings for that purpose shall have been taken or,
to the knowledge of the Company, shall be contemplated by the Commission.
(b) (1) The Representatives shall have received on the Closing Date
or the Option Closing Date, as the case may be, the opinion of Powell,
Goldstein, Frazer & Murphy, counsel for the Company, dated the Closing Date or
the Option Closing Date, as the case may be, addressed to the Underwriters to
the effect that:
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<PAGE> 14
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own, and hold under lease, its
properties and conduct its business as described in the Prospectus. Based upon
appropriate certificates of public officials (which shall be furnished to the
Representatives with the opinion), each of OS Phoenix, Inc., OS Baseline, Inc.,
Outdoor Systems Painting, Inc., OS Advertising of Texas Painting, Inc., Decade
Communications Group, Inc. and Bench Advertising Company of Colorado, Inc. (the
"U.S. Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation with corporate power and authority to own, and hold under lease,
its properties and conduct its business as described in the Prospectus.
(ii) Based upon appropriate certificates of public
officials (which shall be furnished to the Representatives with the opinion),
each of the Company and the U.S. Subsidiaries is duly qualified to transact
business as a foreign corporation and is in good standing under the laws of each
of the jurisdictions in which the conduct of its business requires such
qualification, except to the extent that the failure to qualify would not, in
the aggregate, reasonably be expected to have a material adverse effect on the
business or financial condition of the Company and its Subsidiaries, taken as a
whole (a "Material Adverse Effect").
(iii) The outstanding shares of capital stock of the U.S.
Subsidiaries have been duly authorized and validly issued and are fully paid and
non-assessable. To the best knowledge of such counsel, the shares of capital
stock of the U.S. Subsidiaries owned by the Company are owned free and clear of
all liens, encumbrances and security interests (other than liens granted by the
Company in connection with the Senior Credit Facility). No options, warrants or
other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligations into shares of capital stock or ownership
interests of the U.S. Subsidiaries are outstanding.
(iv) The Company has authorized and outstanding capital
stock as set forth under the caption "Capitalization" in the Prospectus; the
authorized shares of its Common Stock have been duly authorized; the outstanding
shares of its Common Stock, including the Shares to be sold by the Selling
Shareholders, have been duly authorized and validly issued and are fully paid
and non-assessable; all of the Shares conform in all material respects to the
description thereof contained in the Prospectus; and the certificates for the
Shares conform to the requirements of the Delaware General Corporation Law.
(v) The shares of Common Stock, including the Option
Shares, if any, to be sold by the Company pursuant to this Agreement have been
duly authorized and will be validly issued, fully paid and non-assessable when
issued and paid for as contemplated by this Agreement; and no statutory
preemptive rights of stockholders or, to the best of such counsel's knowledge,
any other preemptive rights exist with respect to any of the Shares or the issue
and sale thereof.
(vi) The Registration Statement has become effective under
the Act and, to the knowledge of such counsel, no stop order proceedings with
respect thereto have been instituted or are pending or threatened under the Act.
(vii) The Registration Statement, all Preliminary
Prospectuses, the Prospectus and each amendment or supplement thereto filed with
the Commission on or prior to the date of such opinion comply as to form in all
material respects with the requirements of the Act and the
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<PAGE> 15
applicable rules and regulations thereunder in effect as of the time of such
filing (except that such counsel need express no opinion as to the financial
statements, schedules and other financial information included therein).
(viii) Each document incorporated by reference in the
Registration Statement, all Preliminary Prospectuses, the Prospectus and each
amendment or supplement thereto filed with the Commission on or prior to the
date of such opinion complied as to form at the time of such filing in all
material respects with the applicable requirements (if any) of the Securities
Exchange Act of 1934 and the applicable rules and regulations thereunder (except
that such counsel need express no opinion as to the financial statements,
schedules and other financial information included therein).
(ix) The conditions for the use of Form S-3 as the proper
form for the Registration Statement have been satisfied.
(x) The statements under the captions "The Transactions,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operation - Liquidity and Capital Resources," "Business - Government
Regulations," "Description of Capital Stock" and "Description of Indebtedness
and Other Commitments" in the Prospectus, insofar as such statements are
descriptions of documents referred to therein are fair summaries of the
documents so summarized, and insofar as such statements are summaries of matters
of law, such summaries present accurately in all material respects the
information called for with respect to such matters of law.
(xi) Such counsel does not know of any contracts or
documents required to be filed as exhibits to or incorporated by reference in
the Registration Statement or described in the Registration Statement or the
Prospectus which are not so filed, incorporated by reference or described as
required.
(xii) Such counsel knows of no material legal proceedings or
regulatory or other claims pending or threatened against the Company, the U.S.
Subsidiaries or Gannett Outdoor of a character required to be reflected in the
Prospectus that are not set forth in the Prospectus.
(xiii) The Asset Purchase Agreement, the Senior Credit
Agreement and the Subordinated Credit Agreement (collectively, the "Transaction
Documents") have been duly authorized, executed and delivered by the Company.
(xiv) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated, and the execution and
delivery of the Transaction Documents and the consummation of the transaction
therein contemplated, do not and will not conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, the
Certificate of Incorporation or By-Laws of the Company, or any agreement or
instrument filed as an exhibit to the Registration Statement or otherwise
identified to such counsel as being material to the Company and its Subsidiaries
in an appropriate certificate of the Company, to which the Company or any of the
U.S. Subsidiaries is a party or by which the Company or any of the U.S.
Subsidiaries may be bound (which shall include agreements and instruments by
which the Company or any of the U.S. Subsidiaries may be bound as a result of
the Acquisition) (each a "Contractual Obligation"), and which conflict, breach
or default could reasonably be expected to have a Material Adverse Effect.
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<PAGE> 16
(xv) This Agreement has been duly authorized, executed and
delivered by the Company.
(xvi) Except for (a) approvals, consents, orders,
authorizations, designations, declarations or filings which have been waived, or
which have been obtained or made, (b) the transfer to the Company or its
appropriate Subsidiaries, or the reissuance in the name of the Company or its
appropriate Subsidiaries, of certain governmental permits relating to the
advertising displays included in the Acquisition, and (c) governmental
authorizations, approvals and filings required in connection with the
Acquisition by the Company or its Subsidiaries of the capital stock of the New
York Subsidiary, no approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body is necessary in connection with the execution and delivery by
the Company of this Agreement or the Transaction Documents and the consummation
by the Company of the transactions herein or therein contemplated (other than as
may be required by the National Association of Securities Dealers, Inc. or as
required by State securities and Blue Sky laws as to which such counsel need
express no opinion).
(xvii) The Company is not, and will not become as a result of
the consummation of the transactions contemplated by this Agreement, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, and has not been an "investment company" at any time since 1988.
In rendering such opinion, Powell, Goldstein, Frazer & Murphy may rely
as to matters governed by the laws of states other than Georgia or Federal laws
on local counsel in such jurisdictions provided that in each case Powell,
Goldstein, Frazer & Murphy shall state that they believe that they and the
Underwriters are justified in relying on such other counsel and such other
counsel's opinion is also delivered to the Underwriters. Further, the opinions
set forth in subparagraphs (xiv) and (xvi) may be made subject to the
qualification that certain third-party approvals and consents to the transfer to
the Company or the Subsidiaries of certain assets included in the Acquisition,
or of ownership or control over a contracting party with regard to various
contractual obligations, licenses, permits and easements of Gannett Outdoor,
have not been obtained, and no opinion will be required with respect thereto or
the effect thereof. In addition to the matters set forth above, such opinion
shall also include a statement to the effect that nothing has come to the
attention of such counsel which causes them to believe that (A) the Registration
Statement, as of the time it became effective under the Act (but after giving
effect to any modifications incorporated therein pursuant to Rule 430A under the
Act) and as of the Closing Date or the Option Closing Date, as the case may be,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and (B) the Prospectus or any supplement thereto, on the date it
was filed pursuant to Rules and Regulations and as of the Closing Date or the
Option Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading (except that such
counsel need express no view as to financial statements, schedules and other
financial information included or incorporated by reference therein). With
respect to
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<PAGE> 17
such statement, Powell, Goldstein, Frazer & Murphy may state that their belief
is based upon the procedures set forth therein, but is without independent check
and verification.
(b) (2) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion of Blake
Cassels & Graydon, Ontario counsel to Mediacom Inc., limited to matters of
Canadian law, dated the Closing Date or the Option Closing Date, as the case may
be, addressed to the underwriters to the effect that:
(i) Mediacom Inc. is an amalgamated corporation validly
existing under the Canadian Business Corporations Act with all necessary
corporate power and authority to own its property and assets and to carry on its
business now conducted by it. Mediacom Inc. was formed as a result of the
amalgamation of 3284085 Canada Inc. and Mediacom Inc. Prior to such
amalgamation, each of 3284085 Canada Inc. and Mediacom Inc. was duly qualified
as an extra-provincial corporation in all those provinces where it owns, leases
or operates property or conducts business, except to the extent that the failure
to qualify could not, in the aggregate, reasonably be expected to have a
material adverse effect on the business or financial condition of the Company
and its Subsidiaries, taken as a whole.
(ii) The outstanding shares of capital stock of Mediacom
Inc. have been duly authorized and validly issued and are fully paid. The
registered holders of the outstanding shares of capital stock of Mediacom Inc.
are Canadian Imperial Bank of Commerce (as to 65 common shares, which we
understand are pledged as security for the Senior Credit Facility) and the
Company (as to 35 common shares).
(iii) No approval, consent, order, authorization,
designation, declaration or filing by or with any Ontario or Federal Canadian
regulatory, administrative or other governmental body is necessary in connection
with the acquisition by 3284085 Canada Inc. of the capital stock of Mediacom
Inc. pursuant to the terms of the Asset Purchase Agreement, except such as have
been obtained or made, specifying the same.
(c) The Representatives shall have received on the Closing Date
the opinion of Powell, Goldstein, Frazer & Murphy, counsel for the Selling
Shareholders, dated the Closing Date, addressed to the Underwriters to the
effect that:
(i) The execution and delivery of this Agreement and the
consummation of the sale of Firm Shares by each Selling Shareholder as herein
contemplated do not conflict with or result in a breach of any terms or
provisions of, or constitute a default under any agreement or instrument
identified to such counsel in an appropriate certificate of such Selling
Shareholder, to which such Selling Shareholder is a party or by which such
Selling Shareholder may be bound, which breach could reasonably be expected to
have a materially adverse effect on the ability of such Selling Shareholder to
perform his or its obligations under this Agreement.
(ii) Each Selling Shareholder has full legal right, power
and authority, and any approval required by law (other than as may be required
by State securities and Blue Sky laws or for clearance of the offering with the
NASD, as to which counsel need express no opinion) to sell, assign, transfer and
deliver the Shares to be sold by such Selling Shareholder.
(iii) The Custodian Agreement, the Power of Attorney and
this Agreement have been executed and delivered by the Selling Shareholders and
the Custodian Agreement and the Power of Attorney are valid and binding
obligations of such Selling Shareholders enforceable in
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<PAGE> 18
accordance with their respective terms, except as enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance, moratorium or similar
laws affecting creditors' rights generally and by general principles of equity
and the discretion of the court before which any proceeding therefor may be
brought (regardless of whether enforceability is considered in a proceeding at
law or in equity).
(iv) Upon payment for the Firm Shares to be sold by the
Selling Shareholders, and delivery of the stock certificates evidencing such
Firm Shares in accordance with the Underwriting Agreement, the Underwriters
(assuming that they are purchasing the Firm Shares being sold by the Selling
Shareholders in good faith and without actual notice of any adverse claim) will
have acquired valid title to the Shares being sold by each Selling Shareholder
on the Closing Date, free and clear of any adverse claims, any lien in favor of
the Company, and any restrictions on transfer imposed by the Company.
(d) The Representatives shall have received from Piper & Marbury
L.L.P., counsel for the Underwriters, an opinion dated the Closing Date or the
Option Closing Date, as the case may be, substantially to the effect specified
in subparagraphs (iv), (v), (vi), (vii) and (xv) of Paragraph (b)(1) of this
Section 6, and that the Company is a validly organized and existing corporation
under the laws of the State of Delaware. In rendering such opinion Piper &
Marbury L.L.P. may rely as to all matters governed other than by the laws of the
State of Maryland or Federal laws on the opinion of counsel referred to in
paragraph (b) of this Section 6. In addition to the matters set forth above,
such opinion shall also include a statement to the effect that nothing has come
to the attention of such counsel which leads them to believe that (A) the
Registration Statement, as of the time it became effective under the Act (but
after giving effect to any modifications incorporated therein pursuant to Rule
430A under the Act) and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (B) the Prospectus or any supplement
thereto, on the date it was filed pursuant to Rules and Regulations and as of
the Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
(except that such counsel need express no view as to financial statements,
schedules and other financial information included or incorporated by reference
therein). With respect to such statement, Piper & Marbury L.L.P. may state that
their belief is based upon the procedures set forth therein, but is without
independent check and verification.
(e) The Representatives shall have received at or prior to the
Closing Date from Piper & Marbury L.L.P. a memorandum or summary, in form and
substance satisfactory to the Representatives, with respect to the qualification
for offering and sale by the Underwriters of the Shares under the State
securities or Blue Sky laws of such jurisdictions as the Representatives may
reasonably have designated to the Company.
(f) The Representatives shall have received on the Closing Date or
the Option Closing Date, as the case may be, a signed letter from Deloitte &
Touche LLP, dated the Closing Date or the Option Closing Date, as the case may
be, which shall confirm, on the basis of a review in accordance with the
procedures set forth in the letter signed by such firm and dated and delivered
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<PAGE> 19
to the Representatives on the date hereof, that nothing has come to their
attention during the period from the date five days prior to the date hereof, to
a date not more than three days prior to the Closing Date or the Option Closing
Date, as the case may be, which would require any change in their letter dated
the date hereof if it were required to be dated and delivered on the Closing
Date or the Option Closing Date, as the case may be. All such letters shall be
in form and substance satisfactory to the Representatives.
(g) The Representatives shall have received on the Closing Date or
the Option Closing Date, as the case may be, a certificate or certificates of
the Chief Executive Officer and the Chief Financial Officer of the Company to
the effect that, as of the Closing Date or the Option Closing Date, as the case
may be, each of them severally represents in such capacity as follows:
(i) The Registration Statement has become effective under
the Act and no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for such purpose have been taken
or are, to his knowledge, contemplated by the Commission.
(ii) He does not know of any litigation instituted or
threatened against the Company, any of the Subsidiaries or Gannett Outdoor of a
character required to be disclosed in the Registration Statement which is not so
disclosed; he does not know of any material contract required to be filed as an
exhibit to the Registration Statement which is not so filed; and the
representations and warranties of the Company contained in Section 1 hereof are
true and correct as of the Closing Date or the Option Closing Date, as the case
may be.
(iii) He has carefully examined the Registration Statement
and the Prospectus and, in his opinion, as of the effective date of the
Registration Statement, the statements contained in the Registration Statement,
including any documents incorporated by reference therein, were true and
correct, and such Registration Statement and Prospectus or any document
incorporated by reference therein did not omit to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading and, in his opinion, since the effective date of the Registration
Statement, no event has occurred which should have been set forth in a
supplement to or an amendment of the Prospectus which has not been so set forth
in such supplement or amendment.
(h) The Company and the Selling Shareholders (only with respect to
the Closing Date) shall have furnished to the Representatives such further
certificates and documents confirming the representations and warranties
contained herein and related matters as the Representatives may reasonably have
requested.
(i) The Firm Shares, and Option Shares, if any, (including any
additional shares registered pursuant to Rule 462(b)) have been approved for
listing upon official notice of issuance on the NASDAQ National Market System.
(j) The Representatives shall have received from each officer and
director of the Company a letter or letters, in form and substance satisfactory
to the Underwriters, pursuant to which such person shall agree not to offer,
sell, sell short or otherwise dispose of any shares of Common Stock of the
Company or other capital stock of the Company, or any other securities
convertible, exchangeable or exercisable for Common Stock or derivative of
Common Stock owned by such person (or as to which such person has the right to
direct the disposition of) for
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<PAGE> 20
a period of 180 days after the date of this Agreement, except with the prior
written consent of the Representatives.
(k) At the Closing Date, all conditions for the Subordinated
Credit Facility shall have been satisfied and funding of the Senior Credit
Facility and the Subordinated Credit Facility in the manner described in the
Prospectus shall occur simultaneously with the closing of the sale of the Shares
at the Closing Date; all conditions for the consummation of the Acquisition
shall have been satisfied and the closing of the Acquisition in the manner
described in the Prospectus shall occur simultaneously with the closing of the
sale of the Shares on the Closing Date and the Company shall have provided to
the Representatives evidence thereof and copies of documents with respect
thereto as they may reasonably request.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects satisfactory to the Representatives and to Piper & Marbury
L.L.P., counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Representatives by notifying the Company of such termination in writing or
by telegram at or prior to the Closing Date or the Option Closing Date, as the
case may be.
In such event, the Company, the Selling Shareholders and the
Underwriters shall not be under any obligation to each other (except to the
extent provided in Sections 5 and 8 hereof).
7. Conditions of the Obligations of the Company and the Selling
Shareholders. The obligations of the Company and the Selling Shareholders to
sell and deliver the portion of the Shares required to be delivered as and when
specified in this Agreement are subject to the conditions that at the Closing
Date or the Option Closing Date, as the case may be, no stop order suspending
the effectiveness of the Registration Statement shall have been issued and in
effect or proceedings therefor initiated or threatened.
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<PAGE> 21
8. Indemnification
(a) The Company and the Selling Shareholders jointly and severally
agree to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of the Act against any losses,
claims, damages or liabilities to which such Underwriter or such controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained or incorporated by reference in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or (ii) the omission or alleged omission to
state therein a material fact required to be stated or incorporated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter and each such controlling person for any legal or other expenses
reasonably incurred by such Underwriter or such controlling person in connection
with investigating or defending any such loss, claim, damage, liability, action
or proceeding; provided, however, that the Company will not be liable in any
such case to the extent that (i) any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement,
or omission or alleged omission made or incorporated by reference in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives or the
Selling Shareholders specifically for use in the preparation thereof; or (ii)
such statement or omission was contained or made in any Preliminary Prospectus
and corrected in the Prospectus and (A) any such loss, claim, damage or
liability suffered or incurred by any Underwriter (or any person who controls
any Underwriter) resulted from an action, claim or suit by any person who
purchased Shares which are the subject thereof from such Underwriter in the
offering and (B) such Underwriter failed to deliver or provide a copy of the
Prospectus to such person at or prior to the confirmation of the sale of such
Shares in any case where such delivery is required by the Act. In no event,
however, shall the aggregate liability of any Selling Shareholder for
indemnification under this Section 8(a) exceed the lesser of (i) that proportion
of the total of such losses, claims, damages or liabilities indemnified against
equal to the proportion of the total Shares sold hereunder which is being sold
by such Selling Shareholder, or (ii) the net proceeds after underwriters
discounts and commissions received by such Selling Shareholder from the
Underwriters in the offering. In addition, the Selling Shareholders will not be
obligated to make a payment under this subparagraph (a) for any indemnification
claims if and to the extent that payment of such claim is made by the Company
within sixty (60) days after written demand by the Underwriters. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the Registration
Statement, the Selling Shareholders, their respective partners and each person,
if any, who controls the Company within the meaning of the Act, against any
losses, claims, damages or liabilities to which any Selling Shareholder, the
Company or any such director, officer, or controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or
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<PAGE> 22
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained or
incorporated by reference in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or arise out
of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made, and will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, Selling Shareholder, partner or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however, that each
Underwriter will be liable in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission has been made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or such amendment or supplement, in reliance upon and
in conformity with written information furnished to the Company by or through
the Representatives specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 8, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a) or (b) shall be available to any
party who shall fail to give notice as provided in this Section 8(c) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was prejudiced by the failure to give such notice,
but the failure to give such notice shall not relieve the indemnifying party or
parties from any liability which it or they may have to the indemnified party
for contribution or otherwise than on account of the provisions of Section 8(a)
or (b). In case any such proceeding shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party and shall pay as incurred the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel at its own expense.
Notwithstanding the foregoing, the indemnifying party shall pay as incurred the
fees and expenses of the counsel retained by the indemnified party in the event
(i) the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them, or
(iii) the indemnifying party shall have failed to assume the defense and employ
counsel reasonably acceptable to the indemnified party within a reasonable
period of time after notice of commencement of the action. It is understood that
the indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by you
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<PAGE> 23
in the case of parties indemnified pursuant to Section 8(a) and by the Company
and the Selling Shareholders in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company, the Selling Shareholders and the
Underwriters in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company, the Selling Shareholders and the
Underwriters shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
and the Selling Shareholders bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Selling Shareholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this Section
8(d) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 8(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) referred to above in this Section 8(d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), (i) no Underwriter shall
be required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter, (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation and (iii) no Selling Shareholder
shall be
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<PAGE> 24
required to contribute any amount in excess of (a) the proceeds received by such
Selling Shareholder from the Underwriters in the offering after deducting
underwriting discounts and commissions plus (b) any damages previously paid by
such Selling Shareholder. The Underwriters' obligations in this Section 8(d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
9. Default by Underwriters. If on the Closing Date or the Option
Closing Date, as the case may be, any Underwriter shall fail to purchase and pay
for the portion of the Shares which such Underwriter has agreed to purchase and
pay for on such date (otherwise than by reason of any default on the part of the
Company or a Selling Shareholder), you, as Representatives of the Underwriters,
shall use your best efforts to procure within 24 hours thereafter one or more of
the other Underwriters, or any others, to purchase from the Company and the
Selling Shareholders such amounts as may be agreed upon and upon the terms set
forth herein, the Firm Shares or Option Shares, as the case may be, which the
defaulting Underwriter or Underwriters failed to purchase. If during such 24
hours you, as such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option Shares, as
the case may be, agreed to be purchased by the defaulting Underwriter or
Underwriters, then (a) if the aggregate number of shares with respect to which
such default shall occur does not exceed 10% of the Firm Shares or Option
Shares, as the case may be, covered hereby, the other Underwriters shall be
obligated, severally, in proportion to the respective numbers of Firm Shares or
Option Shares, as the case may be, which they are obligated to purchase
hereunder, to purchase the Firm Shares or Option Shares, as the case may be,
which such defaulting Underwriter or Underwriters failed to purchase, or (b) if
the aggregate number of shares of Firm Shares or Option Shares, as the case may
be, with respect to which such default shall occur exceeds 10% of the Firm
Shares or Option Shares, as the case may be, covered hereby, the Company and the
Selling Shareholders or you as the Representatives of the Underwriters will have
the right, by written notice given within the next 24-hour period to the parties
to this Agreement, to terminate this Agreement without liability on the part of
the non-defaulting Underwriters or of the Company or of the Selling Shareholders
except to the extent provided in Section 8 hereof. In the event of a default by
any Underwriter or Underwriters, as set forth in this Section 9, the Closing
Date or Option Closing Date, as the case may be, may be postponed for such
period, not exceeding seven days, as you, as Representatives, may determine in
order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter. Any
action taken under this Section 9 shall not relieve
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<PAGE> 25
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. Notices. All communications hereunder shall be in writing
and, except as otherwise provided herein, will be mailed, delivered or
telegraphed and confirmed as follows: if to the Underwriters, to Alex. Brown &
Sons Incorporated, 135 East Baltimore Street, Baltimore, Maryland 21202,
Attention: Scott Wieler, Managing Director; if to the Company, to Outdoor
Systems, Inc., 2502 North Black Canyon Highway, Phoenix, Arizona 85009,
Attention: William S. Levine, Chairman of the Board; and if to the Selling
Shareholders, First Union National Bank of North Carolina, 2 First Union Center,
Charlotte, North Carolina 28288- 1154, as Custodian, with a copy to Powell,
Goldstein, Frazer & Murphy, 191 Peachtree Street, N.E., Atlanta, Georgia 30303
Attention: G. William Speer.
11. Termination. This Agreement may be terminated by you by
notice to the Company and the Selling Shareholders as follows:
(a) at any time prior to the earlier of (i) the time the Shares
are released by you for sale by notice to the Underwriters, or (ii) 11:30 A.M.
on the first business day following the date of this Agreement;
(b) at any time after the date hereof and prior to the Closing if
any of the following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise, of the
Company and the Subsidiaries taken as a whole or the earnings, business affairs,
management or business prospects of the Company and the Subsidiaries taken as a
whole, whether or not arising in the ordinary course of business, (ii) any
outbreak or escalation of hostilities or declaration of war or national
emergency after the date hereof or other national or international calamity or
crisis or change in economic or political conditions if the effect of such
outbreak, escalation, declaration, emergency, calamity, crisis or change on the
financial markets of the United States would, in your reasonable judgment, make
the offering or delivery of the Shares impracticable or inadvisable, (iii)
trading in securities on the New York Stock Exchange or the American Stock
Exchange shall have been suspended or materially limited (other than limitations
on hours or numbers of days of trading) or minimum prices shall have been
established for securities on either such Exchange, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
your reasonable opinion materially and adversely affects or will materially or
adversely affect the business or operations of the Company and the Subsidiaries
taken as a whole, (v) declaration of a banking moratorium by either federal or
New York State authorities, (vi) any downgrading in the rating of the Company's
debt securities by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Securities Exchange Act of
1934, as amended); (vii) the taking of any action by any governmental body or
agency in respect of its monetary or fiscal affairs which in your reasonable
opinion has a material adverse effect on the securities markets in the United
States or elsewhere; or (viii) any litigation or proceeding is pending or
threatened against the Underwriters which seeks to enjoin or otherwise restrain,
or
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<PAGE> 26
seeks damages in connection with, or questions the legality or validity of this
Agreement or the transactions contemplated hereby; or
(c) as provided in Sections 6 and 9 of this Agreement.
This Agreement also may be terminated by you, by notice to the Company
and the Selling Shareholders, as to any obligation of the Underwriters to
purchase the Option Shares, upon the occurrence at any time prior to the Option
Closing Date of any of the events described in subparagraph (b) above or as
provided in Sections 6 and 9 of this Agreement.
13. Successors. This Agreement has been and is made solely for the
benefit of the Underwriters, the Company and the Selling Shareholders and their
respective successors, executors, administrators, heirs and assigns, and the
officers, directors and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Shares merely because of such purchase.
14. Miscellaneous. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any investigation made
by or on behalf of any Underwriter or controlling person thereof, by or on
behalf of the Company or its directors or officers or by or on behalf of a
Selling Shareholder and (c) delivery of and payment for the Shares under this
Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Maryland.
- 26 -
<PAGE> 27
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company, the Selling
Shareholders and the several Underwriters in accordance with its terms.
Very truly yours,
Outdoor Systems, Inc.
By:/s/ William S. Levine
William S. Levine
Chairman
Selling Shareholders
Levine Investments Limited Partnership
By: William S. Levine
BRN Properties Limited Partnership
*
-
By: Arthur R. Moreno
M-K Link Investments Limited
Partnership
*
-
By: Stephen J. Haberkorn
*
-
Wally C. Kelly
* By:
/s/ William S. Levine
--------------------------------------
William S. Levine, as Attorney-in-Fact
- 27 -
<PAGE> 28
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
ALEX. BROWN & SONS INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
CIBC WOOD GUNDY SECURITIES, CORP.
As Representatives of the
several Underwriters listed
on Schedule I
By ALEX. BROWN & SONS INCORPORATED
By
--------------------------------
Authorized Officer
- 28 -
<PAGE> 29
SCHEDULE I
Schedule of Underwriters
Number of Firm Shares
<TABLE>
<CAPTION>
Underwriter To Be Purchased
<S> <C>
Alex. Brown & Sons Incorporated................................ 3,440,000
Donaldson, Lufkin & Jenrette Securities Corporation............ 3,440,000
CIBC Wood Gundy Securities, Inc................................ 1,720,000
---------
Total.......................... 8,600,000
=========
</TABLE>
- 29 -
<PAGE> 30
SCHEDULE II
Schedule of Selling Shareholders
<TABLE>
Number of Firm Shares
Selling Shareholder to be Sold
- ------------------- ---------------------
<S> <C>
Levine Investments Limited Partnership................. 500,000
BRN Properties Limited Partnership..................... 500,000
M-K Link Investments Limited Partnership............... 200,000
Wally C. Kelly......................................... 100,000
---------
Total................ 1,300,000
=========
</TABLE>
- - 30 -
<PAGE> 31
SCHEDULE III
Subsidiaries
OS Baseline, Inc., an Arizona corporation
Outdoor Systems Painting, Inc., an Arizona corporation
OS Advertising of Texas Painting, Inc., a Texas corporation
Bench Advertising Company of Colorado, Inc.
Decade Communications Group, Inc.
Mediacom Inc. a Canadian corporation
3284085 Canada Inc., a Canadian corporation
- 31 -
<PAGE> 1
EXHIBIT 99.4
================================================================================
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
among
OUTDOOR SYSTEMS, INC.,
3284085 CANADA INC.,
The Several Lenders
from Time to Time Parties Hereto
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as US Administrative Agent and
Canadian Administrative Agent
Dated as of August 22, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 1. DEFINITIONS......................................................................................... 2
1.1 Defined Terms..................................................................................... 2
1.2 Other Definitional Provisions..................................................................... 32
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS..................................................................... 33
2.1 US Revolving Credit Commitments................................................................... 33
2.2 Canadian Revolving Credit Commitments............................................................. 33
2.3 US Revolving Credit Notes......................................................................... 34
2.4 Procedure for US Revolving Credit Borrowing....................................................... 34
2.5 Procedure for C$ Prime Loan Revolving Credit Borrowing............................................ 35
2.6 Fees ........................................................................................... 35
2.7 Termination or Reduction of Revolving Credit Commitments.......................................... 36
2.8 US Term Loans..................................................................................... 38
2.9 Canadian Term Loans.............................................................................. 38
2.10 US Tranche A Term Notes and Repayment............................................................ 38
2.11 US Tranche B Term Notes and Repayment............................................................ 39
2.12 US Tranche C Term Notes and Repayment............................................................ 39
2.13 Canadian Tranche A Term Repayment................................................................ 40
2.14 Canadian Tranche C Term Notes.................................................................... 40
2.15 Procedure for Term Loan Borrowing................................................................ 41
2.16 Repayment of Loans............................................................................... 42
2.17 Bankers' Acceptances............................................................................. 43
2.18 Circumstances Making Bankers' Acceptances Unavailable............................................ 47
SECTION 3. LETTERS OF CREDIT................................................................................... 47
3.1 L/C Commitments................................................................................... 47
3.2 Procedure for Issuance of Letters of Credit....................................................... 48
3.3 Fees, Commissions and Other Charges............................................................... 49
3.4 L/C Participations................................................................................ 50
3.5 L/C Reimbursement Obligations of the Borrower..................................................... 51
3.6 Obligations Absolute.............................................................................. 52
3.7 Letter of Credit Payments......................................................................... 53
3.8 Application....................................................................................... 53
SECTION 4. GENERAL PROVISIONS.................................................................................. 53
4.1 Interest Rates and Payment Dates.................................................................. 53
4.2 Optional Prepayments.............................................................................. 54
4.3 Mandatory Prepayments and Reduction of Revolving Credit Commitments............................... 55
4.4 Conversion and Continuation Options............................................................... 60
4.5 Minimum Amounts and Maximum Number of Tranches.................................................... 61
4.6 Computation of Interest and Fees.................................................................. 62
4.7 Inability to Determine Interest Rate.............................................................. 62
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C> <C>
4.8 Pro Rata Treatment and Payments................................................................... 63
4.9 Illegality........................................................................................ 64
4.10 Requirements of Law.............................................................................. 64
4.11 Taxes ........................................................................................... 66
4.12 Indemnity........................................................................................ 68
SECTION 5. REPRESENTATIONS AND WARRANTIES...................................................................... 68
5.1 Financial Condition............................................................................... 68
5.2 No Change......................................................................................... 69
5.3 Corporate Existence; Compliance with Law.......................................................... 70
5.4 Corporate Power; Authorization; Enforceable Obligations........................................... 70
5.5 No Legal Bar...................................................................................... 70
5.6 No Material Litigation............................................................................ 71
5.7 No Default........................................................................................ 71
5.8 Ownership of Property; Liens...................................................................... 71
5.9 Advertising Displays.............................................................................. 71
5.10 No Burdensome Restrictions....................................................................... 71
5.11 Taxes ........................................................................................... 71
5.12 Federal Regulations.............................................................................. 72
5.13 ERISA ........................................................................................... 72
5.14 Investment Company Act; Other Regulations........................................................ 73
5.15 Subsidiaries..................................................................................... 73
5.16 Purpose of Loans................................................................................. 73
5.17 Environmental Matters............................................................................ 74
5.18 Regulation H..................................................................................... 75
5.19 Solvency......................................................................................... 75
5.20 Material Agreements.............................................................................. 75
5.21 Purchase Agreement............................................................................... 75
5.22 Intellectual Property............................................................................ 76
5.23 No Material Misstatements........................................................................ 76
SECTION 6. CONDITIONS PRECEDENT................................................................................ 76
6.1 Conditions to Initial Loans....................................................................... 76
6.2 Conditions to Each Extension of Credit............................................................ 81
SECTION 7. AFFIRMATIVE COVENANTS............................................................................... 82
7.1 Financial Statements.............................................................................. 82
7.2 Certificates; Other Information................................................................... 82
7.3 Payment of Obligations............................................................................ 83
7.4 Conduct of Business and Maintenance of Existence.................................................. 84
7.5 Maintenance of Property; Insurance................................................................ 84
7.6 Inspection of Property; Books and Records; Discussions............................................ 84
7.7 Notices........................................................................................... 84
7.8 Environmental Laws................................................................................ 86
7.9 Lease Renewals.................................................................................... 86
7.10 Additional Collateral............................................................................ 86
</TABLE>
- ii -
<PAGE> 4
<TABLE>
<CAPTION>
Page
<S> <C> <C>
7.11 Key Man Life Insurance........................................................................... 87
7.12 Interest Rate Protection......................................................................... 88
7.13 Canadian Pension Plans........................................................................... 88
SECTION 8. NEGATIVE COVENANTS.................................................................................. 88
8.1 Financial Condition Covenants..................................................................... 88
8.2 Limitation on Indebtedness........................................................................ 89
8.3 Limitation on Liens............................................................................... 90
8.4 Limitation on Guarantee Obligations............................................................... 92
8.5 Limitation on Fundamental Changes................................................................. 92
8.6 Limitation on Sale of Assets...................................................................... 92
8.7 Limitation on Leases.............................................................................. 94
8.8 Limitation on Dividends........................................................................... 94
8.9 Limitation on Capital Expenditures................................................................ 94
8.10 Limitation on Investments, Loans and Advances.................................................... 94
8.11 Limitation on Optional Payments and Modifications of Debt Instruments............................ 95
8.12 Limitation on Transactions with Affiliates....................................................... 95
8.13 Limitation on Sales and Leasebacks............................................................... 95
8.14 Limitation on Changes in Fiscal Year............................................................. 95
8.15 Limitation on Negative Pledge Clauses............................................................ 96
8.16 Limitation on Lines of Business.................................................................. 96
SECTION 9. EVENTS OF DEFAULT................................................................................... 96
SECTION 10. THE ADMINISTRATIVE AGENTS..........................................................................100
10.1 Appointment......................................................................................100
10.2 Delegation of Duties.............................................................................100
10.3 Exculpatory Provisions...........................................................................101
10.4 Reliance by Administrative Agent.................................................................101
10.5 Notice of Default................................................................................101
10.6 Non-Reliance on Administrative Agents and Other Lenders..........................................102
10.7 Indemnification..................................................................................102
10.8 Administrative Agents in Their Individual Capacities.............................................103
10.9 Successor Administrative Agent...................................................................103
10.10 Releases of Guarantees and Collateral...........................................................103
SECTION 11. MISCELLANEOUS......................................................................................103
11.1 Amendments and Waivers...........................................................................103
11.2 Notices..........................................................................................106
11.3 No Waiver; Cumulative Remedies...................................................................106
11.4 Survival of Representations and Warranties.......................................................107
11.5 Payment of Expenses and Taxes....................................................................107
11.6 Successors and Assigns; Participations and Assignments...........................................108
11.7 Adjustments; Set-off.............................................................................110
11.8 Counterparts.....................................................................................111
11.9 Severability.....................................................................................111
</TABLE>
- iii -
<PAGE> 5
<TABLE>
<CAPTION>
Page
<S> <C> <C>
11.10 Integration.....................................................................................111
11.11 GOVERNING LAW...................................................................................112
11.12 Submission To Jurisdiction; Waivers.............................................................112
11.13 Acknowledgements................................................................................112
11.14 WAIVERS OF JURY TRIAL...........................................................................113
11.15 Confidentiality.................................................................................113
</TABLE>
SCHEDULES
SCHEDULE 1.1A Commitments; Lending Offices;
Addresses for Notice
SCHEDULE 1.1B Pricing Grid
SCHEDULE 1.1C Mortgage Locations
SCHEDULE 5.2 Dividends, etc.
SCHEDULE 5.3 Foreign Jurisdictions
SCHEDULE 5.9 Advertising Displays
SCHEDULE 5.15 Subsidiaries
SCHEDULE 5.20 Material Agreements
SCHEDULE 6.1(g) Schedule of Uses
SCHEDULE 8.2 Indebtedness
SCHEDULE 8.3 Liens
SCHEDULE 8.12 Affiliated Transactions
EXHIBITS
EXHIBIT A-1 Form of US Revolving Credit Note
EXHIBIT A-2 Form of US Tranche A Term Note
EXHIBIT A-3 Form of US Tranche B Term Note
EXHIBIT A-4 Form of US Tranche C Term Note
EXHIBIT A-5 Form of Canadian Tranche C Term Note
EXHIBIT B-1 Form of US Guarantee and Collateral Agreement
EXHIBIT B-2 Form of Canadian Security Documents
EXHIBIT C-1 Form of Fee Mortgage
EXHIBIT C-2 Form of Leasehold Mortgage
EXHIBIT D-1 Form of Borrower's Counsel Opinion
EXHIBIT D-2 Form of Opinion of Borrower's Canadian Counsel
EXHIBIT D-3 Form of Local Counsel Opinion
EXHIBIT E Form of Assignment and Acceptance
EXHIBIT F Form of Draft
- iv -
<PAGE> 6
THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
August 22, 1996 (this "Agreement"), among OUTDOOR SYSTEMS, INC., a Delaware
corporation (the "Company"), 3284085 CANADA INC., a Canadian corporation (such
corporation, and, upon the consummation thereof, the corporation resulting from
the amalgamation of 3284085 Canada Inc. and Mediacom Inc. as described in the
Recitals below, the "Canadian Borrower"; together with the Company, the
"Borrowers"), the several banks and other financial institutions (collectively,
the "Lenders") from time to time parties hereto, and CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY, as US Administrative Agent (as defined below), and
CANADIAN IMPERIAL BANK OF COMMERCE, as Canadian Administration Agent (as defined
below).
W I T N E S S E T H :
WHEREAS, pursuant to the First Amended and Restated Credit
Agreement, dated as of December 14, 1994 (as amended by the First Amendment,
dated as of December 31, 1994, the "Existing Credit Agreement"), among the
several banks and other financial institutions parties thereof and CIBC Inc., as
administrative agent, such lenders have agreed to make, and have made, certain
loans and other extensions of credit to the Company;
WHEREAS, the Company and CIBC Inc. entered into the Second
Amended and Restated Credit Agreement, dated as of July 9, 1996 (as amended, the
"Restated Existing Credit Agreement"), which contemplated funding thereunder
subject to the conditions precedent set forth in subsection 6.1 hereof;
WHEREAS, pursuant to the Asset Purchase Agreement, dated as of
July 9, 1996 (as amended, supplemented or modified from time to time, the
"Purchase Agreement"), among Gannett Co., Inc., Combined Communications
Corporation, Gannett Transit, Inc., Gannett Outdoor Co. of Texas, Shelter Media
Communications, Inc., Gannett International Communications, Inc. (collectively,
the "Sellers") and the Company, the Company has agreed to acquire (the
"Acquisition"), and the Sellers have agreed to sell, substantially all of the
assets of the Sellers used in connection with the Seller's outdoor advertising,
transit and shelter operations (with exceptions as set forth in the Purchase
Agreement) and all the shares of the issued and outstanding Capital Stock of New
York Subways Advertising Co., Inc. and Mediacom Inc., a Canadian corporation
(collectively, the "Division");
WHEREAS, the Company has formed 3284085 Canada Inc. for the
purpose of consummating that part of the Acquisition that involves Mediacom
Inc.; 3284085 Canada Inc. will borrow hereunder funds to pay to the Sellers that
part of the consideration for the Acquisition that is payable in connection with
the acquisition of Mediacom Inc., and, in connection with the Acquisition and
immediately thereafter, 3284085 Canada Inc. and Mediacom Inc. will be
amalgamated and the term "Canadian Borrower" will thereafter refer to the
resultant corporation; and
<PAGE> 7
2
WHEREAS, the Borrowers have requested that the Lenders and the
Administrative Agents enter into this Third Amended and Restated Credit
Agreement, to provide a source of funds to enable the Company to consummate the
Acquisition, to repurchase its Senior Notes and to assist the Borrowers in
financing their working capital requirements following the Acquisition and to
modify the Restated Existing Credit Agreement in certain other respects;
NOW THEREFORE, the parties hereto hereby agree that the
Existing Credit Agreement and the Restated Existing Credit Agreement are amended
and restated in their entireties as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": on any particular date, a rate of interest per annum
equal to the highest of:
(a) the rate of interest most recently announced by CIBC
as its Base Rate (the "CIBC Base Rate");
(b) the Federal Funds Rate for such date plus 1%; and
(c) the C/D Published Moving Rate most recently
determined by CIBC plus 1%.
The CIBC Base Rate is not necessarily intended to be the lowest rate of
interest charged by CIBC in connection with extensions of credit.
"ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.
"Acceptance Fee": the fee payable in C$ to each C$ Lender in
respect of Bankers' Acceptances computed in accordance with subsection
2.17(e).
"Acquisition": as defined in the recitals hereto.
"Adjustment Date": each date on or after June 30, 1997 that is
the second Business Day following receipt by the Lenders of both (i)
the financial statements required to be delivered pursuant to
subsection 7.1(a) or 7.1(b), as applicable, for the most recently
completed fiscal period and (ii) the related Compliance Certificate
<PAGE> 8
3
required to be delivered pursuant to subsection 7.2(b) with respect to
such fiscal period.
"Administrative Agents": the collective reference to the US
Administrative Agent and the Canadian Administrative Agent.
"Advertising Displays": all posters, signs, billboards and
other outdoor advertising displays and related sites therefor owned or
leased (as lessee) by the Company and its Subsidiaries.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"Agreement": this Third Amended and Restated Credit Agreement,
as amended, supplemented or otherwise modified from time to time.
"Aggregate Outstanding Canadian Revolving Extensions of
Credit": as to any Canadian Revolving Credit Lender at any time, an
amount equal to the sum of (a) the aggregate principal amount of all
Canadian Revolving Credit Loans made or, in the case of Bankers'
Acceptances, purchased or accepted, by such Canadian Revolving Credit
Lender then outstanding and (b) such Lender's Canadian Revolving Credit
Commitment Percentage of the Canadian L/C Obligations then outstanding.
"Aggregate Outstanding US Revolving Extensions of Credit": as
to any US Revolving Credit Lender at any time, an amount equal to the
sum of (a) the aggregate principal amount of all US Revolving Credit
Loans made by such US Revolving Credit Lender then outstanding and (b)
such Lender's US Revolving Credit Commitment Percentage of the US L/C
Obligations then outstanding.
"Applicable BA Discount Rate": with respect to any C$ Lender,
as applicable to a Bankers' Acceptance being purchased by such C$
Lender on any day, the CDOR Rate in effect on such day with respect to
such Bankers' Acceptance.
<PAGE> 9
4
"Applicable Margin": (a) as applied to a given Type of Tranche
C Term Loan, the rate per annum set forth under the relevant column
heading below:
ABR Loans Eurodollar Loans
--------- ----------------
2.50% 3.50%;
and (b) as applied to a given Type of Revolving Credit Loan or Tranche
A Term Loan or US Tranche B Term Loan, the rate per annum determined as
follows: during the period from the Closing Date until the first
Adjustment Date, the Applicable Margin in respect of (1) Revolving
Credit Loans and Tranche A Term Loans shall equal (i) with respect to
ABR Loans and C$ Prime Loans, 2.25% per annum and (ii) with respect to
Eurodollar Loans and Bankers' Acceptance borrowings, 3.25% per annum or
(2) US Tranche B Term Loans shall equal (i) with respect to ABR Loans,
2.50% per annum and (ii) with respect to Eurodollar Loans, 3.50% per
annum; provided such Applicable Margins will be adjusted on each
Adjustment Date to the applicable rate per annum set forth under the
heading "ABR Loans/C$ Prime Loans Applicable Margin" or "Eurodollar
Loans/Bankers' Acceptance Applicable Margin" on Schedule 1.1B which
corresponds to the Total Leverage Ratio determined from the financial
statements and Compliance Certificate relating to the end of the fiscal
quarter immediately preceding such Adjustment Date; provided, further
that in the event that the financial statements required to be
delivered pursuant to subsection 7.1(a) or 7.1(b), as applicable, and
the related Compliance Certificate required to be delivered pursuant to
subsection 7.2(b), are not delivered when due, then
(a) if such financial statements and Compliance
Certificate are delivered after the date such financial
statements and Compliance Certificate were required to be
delivered (without giving effect to any applicable cure
period) and the Applicable Margin increases from that
previously in effect as a result of the delivery of such
financial statements and Compliance Certificate, then the
Applicable Margins in respect of Revolving Credit Loans,
Tranche A Term Loans and US Tranche B Term Loans during the
period from the date upon which such financial statements and
Compliance Certificate were required to be delivered (without
giving effect to any applicable cure period) until the date
upon which they actually are delivered shall, except as
otherwise provided in clause (c) below, be the Applicable
Margin as so increased;
(b) if such financial statements and Compliance
Certificate are delivered after the date such financial
statements and Compliance Certificate were required to be
delivered and the Applicable Margin decreases from that
<PAGE> 10
5
previously in effect as a result of the delivery of such
financial statements and Compliance Certificate, then such
decrease in the Applicable Margin shall not become applicable
until the date upon which such financial statements and
Compliance Certificate actually are delivered; and
(c) if such financial statements and Compliance
Certificate are not delivered prior to the expiration of the
applicable cure period, then, effective upon such expiration,
for the period from the date upon which such financial
statements and Compliance Certificate were required to be
delivered (after the expiration of the applicable cure period)
until two Business Days following the date upon which such
financial statements and Compliance Certificate actually are
delivered, the Applicable Margin in respect of (i) Revolving
Credit Loans and Tranche A Term Loans shall be 2.25% per
annum, in the case of ABR Loans and C$ Prime Loans, and 3.25%
per annum, in the case of Eurodollar Loans and Bankers'
Acceptance borrowings, and (ii) US Tranche B Term Loans shall
be 2.50% per annum, in the case of ABR Loans and C$ Prime
Loans, and 3.50% per annum, in the case of Eurodollar Loans
and Bankers' Acceptance borrowings.
"Application": an application, in such form as the relevant
Issuing Lender may specify from time to time, requesting such Issuing
Lender to open a Letter of Credit.
"Assignee": as defined in subsection 11.6(c).
"Available Canadian Revolving Credit Commitment": as to any
Canadian Revolving Credit Lender, at any time, an amount equal to the
excess, if any, of (a) such Canadian Revolving Credit Lender's Canadian
Revolving Credit Commitment over (b) the sum of (i) the aggregate
principal amount of all Canadian Revolving Credit Loans made by such
Lender then outstanding and (ii) such Lender's Canadian Revolving
Credit Commitment Percentage of the Canadian L/C Obligations then
outstanding.
"Available US Revolving Credit Commitment": as to any US
Revolving Credit Lender, at any time, an amount equal to the excess, if
any, of (a) such US Revolving Credit Lender's US Revolving Credit
Commitment over (b) the sum of (i) the aggregate principal amount of
all US Revolving Credit Loans made by such Lender then outstanding and
(ii) such Lender's US Revolving Credit Commitment Percentage of the US
L/C Obligations then outstanding.
<PAGE> 11
6
"BA Discount Proceeds": in respect of any Bankers' Acceptance
to be purchased by a C$ Lender on any day under subsection 2.17, an
amount (rounded to the nearest whole Canadian cent, and with one-half
of one Canadian cent being rounded up) calculated on such day by
dividing:
(a) the face amount of such Bankers' Acceptance; by
(b) the sum of one plus the product of:
(i) the Applicable BA Discount Rate (expressed
as a decimal) applicable to such Bankers'
Acceptance; and
(ii) a fraction, the numerator of which is the
number of days remaining in the term of such
Bankers' Acceptance and the denominator of
which is 365;
with such product being rounded up or down
to the fifth decimal place and .000005 being
rounded up.
"Bankers' Acceptance": a bill of exchange denominated in C$
drawn by the Canadian Borrower and accepted by a C$ Lender pursuant to
subsection 2.17.
"Borrowing Date": any Business Day specified in a notice
pursuant to subsection 2.4, 2.5, 2.15, 2.17 or 3.2 as a date on which a
Borrower requests certain of the Lenders to make Loans hereunder or the
applicable Issuing Lender to issue Letters of Credit hereunder.
"Bridge Preferred Stock": the Senior Increasing Rate
Cumulative Preferred Stock, Series A, to be issued by the Company and
having the terms set forth in the Certificate of Designations
substantially in the form of Exhibit 1 to the Securities Purchase
Agreement, dated July 9, 1996, among the Company and CIBC WG Argosy
Merchant Fund 2, L.L.C.
"Bridge Preferred Warrants": the warrants for the purchase of
common stock of the Company to be issued under a Warrant Agreement to
be entered into among the Company and the Warrant Agent thereunder,
substantially in the form of Exhibit 3 to the Securities Purchase
Agreement, dated July 9, 1996, among the Company and CIBC WG Argosy
Merchant Fund 2, L.L.C
<PAGE> 12
7
"Bridge Take-Out Date": the date on which Take-Out Securities
(as defined in the Subordinated Bridge Agreement) are issued to
refinance the entire outstanding amount of Indebtedness under the
Subordinated Bridge Agreement, and such Indebtedness is so refinanced
thereby, if such date occurs prior to the Conversion Date (as defined
in the Subordinated Bridge Agreement), provided that such Take-Out
Securities (i) have no maturity, mandatory redemption, repurchase or
defeasance, or sinking fund requirement falling due prior to the ninth
anniversary of the Closing Date and (ii) bear interest at a rate per
annum not in excess of 13.5% per annum and that such Take-Out
Securities have other material terms no more restrictive on nor less
favorable to the Company than those set forth in the Senior
Subordinated Indenture.
"Business": as defined in subsection 5.17(b).
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City and Toronto are
authorized or required by law to close, except that, when used in
connection with a Eurodollar Loan, "Business Day" shall mean any
Business Day on which dealings in Dollars between banks may be carried
on in London, Toronto and New York City.
"Canadian Administrative Agent": Canadian Imperial Bank of
Commerce, together with its affiliates, as the administrative agent for
the C$ Lenders and the Canadian Tranche C Lenders under this Agreement
and the other Loan Documents.
"Canadian Dollars" or "C$": lawful currency of Canada.
"Canadian Exchange Rate": on a particular date, the rate at
which C$ may be exchanged into US Dollars, determined by reference to
the Bank of Canada noon rate as published on the Reuters Screen page
BOFC. In the event that such rate does not appear on such Reuters page,
the "Canadian Exchange Rate" shall be determined by reference to any
other means (as selected by the Canadian Administrative Agent) by which
such rate is quoted or published from time to time by the Bank of
Canada (in each case as in effect at or about 12:00 Noon, Local Time,
on the Business Day immediately preceding the relevant date of
determination); provided, that if at the time of any such
determination, for any reason, no such exchange rate is being quoted or
published, the Canadian Administrative Agent may use any reasonable
method as it deems applicable to determine such rate, and such
determination shall be prima facie evidence of the accuracy thereof.
<PAGE> 13
8
"Canadian Issuing Lender": CIBC, in its capacity as issuer of
any Canadian Letter of Credit.
"Canadian L/C Commitment": C$7,000,000.
"Canadian L/C Obligations": at any time, an amount equal to
the sum of (a) the aggregate then undrawn and unexpired amount of the
then outstanding Canadian Letters of Credit and (b) the aggregate
amount of drawings under Canadian Letters of Credit which have not then
been reimbursed pursuant to subsection 3.5(a).
"Canadian L/C Participants": the collective reference to all
the Canadian Revolving Credit Lenders other than the Canadian Issuing
Lender.
"Canadian L/C Reimbursement Obligation": the obligation of the
Canadian Borrower to reimburse the Canadian Issuing Lender pursuant to
subsection 3.5(a) for amounts drawn under Canadian Letters of Credit.
"Canadian Lending Office": as to each C$ Lender, the office in
Canada specified as the "Canadian Lending Office" of such Lender on
Schedule 1.1A or in an Assignment and Acceptance or such other office
in Canada as may be designated by such Lender by written notice to the
Company and the Canadian Administrative Agent.
"Canadian Letters of Credit": as defined in subsection 3.1(b).
"Canadian Pension Plan": any plan, program, arrangement or
understanding that is a pension plan for the purposes of any applicable
pension benefits or tax laws of Canada (whether or not registered under
any such laws) which is maintained or contributed to by (or to which
there is or may be an obligation to contribute of), any Borrower or any
Subsidiary of the Company in respect of any person's employment in
Canada or a province or territory thereof with the Company or any
Subsidiary of the Company and all related agreements, arrangements and
understandings in respect of, or related to, any benefits to be
provided thereunder or the effect thereof on any other compensation or
remuneration of any employee.
"Canadian Revolving Credit Commitment": as to any Canadian
Revolving Credit Lender, its obligation to make C$ Loans to, to
purchase Bankers' Acceptances from, and/or issue or participate in
Canadian Letters of Credit issued on behalf of, the Canadian Borrower
in an aggregate amount not to exceed at any one time outstanding the
amount set forth under such Canadian Revolving Credit Lender's name on
Schedule
<PAGE> 14
9
1.1A opposite the heading "Canadian Revolving Credit Commitment" or, in
the case of any Lender that is an Assignee, the amount of the assigning
Lender's Canadian Revolving Credit Commitment assigned to such Assignee
pursuant to subsection 11.6 (in each case as such amount may be
adjusted from time to time as provided herein).
"Canadian Revolving Credit Commitment Percentage": as to any
Canadian Revolving Credit Lender, the percentage of the aggregate
Canadian Revolving Credit Commitments constituted by its Canadian
Revolving Credit Commitment (or, if the Canadian Revolving Credit
Commitments have terminated or expired, the percentage which (i) the
sum of (a) the aggregate principal amount of such Lender's then
outstanding Canadian Revolving Credit Loans plus (b) such Lender's
interests in the aggregate Canadian L/C Obligations then outstanding
then constitutes of (ii) the sum of (a) the aggregate Canadian
Revolving Credit Loans made, purchased or accepted by the Canadian
Revolving Credit Lenders then outstanding plus (b) the aggregate
Canadian L/C Reimbursement Obligations then outstanding).
"Canadian Revolving Credit Commitment Period": the period from
and including the Closing Date to but not including the Canadian
Revolving Credit Commitment Termination Date.
"Canadian Revolving Credit Commitment Termination Date": the
earlier of (a) December 31, 2001 or, if such date is not a Business
Day, the Business Day next preceding such date and (b) the date upon
which the Canadian Revolving Credit Commitments shall be terminated
pursuant hereto.
"Canadian Revolving Credit Lender": any Lender having a
Canadian Revolving Credit Commitment or that holds outstanding Canadian
Revolving Credit Loans or Canadian L/C Obligations hereunder.
"Canadian Revolving Credit Loans": as defined in subsection
2.2.
"Canadian Security Documents": the collective reference to the
Canadian Demand Debenture, Canadian Debenture Pledge Agreement and the
Hypothec, and all other security documents hereafter delivered to the
Canadian Administrative Agent granting a Lien on any asset or assets of
the Canadian Borrower or any Canadian Subsidiary to secure the
obligations and liabilities of the Canadian Borrower hereunder and
under any of the other Loan Documents or to secure any guarantee, if
any, by any Canadian Subsidiary of any such obligations and
liabilities.
<PAGE> 15
10
"Canadian Subsidiary": any Subsidiary of the Canadian Borrower
that is incorporated or organized under the laws of Canada or any
province thereof.
"Canadian Term Loan": as defined in subsection 2.9.
"Canadian Term Loan Lenders": the collective reference to the
Canadian Tranche A Term Loan Lenders and the Canadian Tranche C Term
Loan Lenders.
"Canadian Tranche A Maturity Date": December 31, 2000.
"Canadian Tranche A Term Loan Commitment": as to any Canadian
Tranche A Term Loan Lender, its obligation to make a C$ Loan to, or
purchase Bankers' Acceptances from, the Canadian Borrower on the
Closing Date pursuant to subsection 2.9 in an amount equal to the
amount set forth under such Canadian Tranche A Term Loan Lender's name
in Schedule 1.1A opposite the heading "Canadian Tranche A Term Loan
Commitment"; collectively, the "Canadian Tranche A Term Loan
Commitments".
"Canadian Tranche A Term Loan Commitment Percentage": as to
any Canadian Tranche A Term Loan Lender, the percentage of the
aggregate Canadian Tranche A Term Loan Commitments constituted by its
Canadian Tranche A Term Loan Commitment or, following the Closing Date,
the percentage of the aggregate outstanding Canadian Tranche A Term
Loans constituted by its Canadian Tranche A Term Loan.
"Canadian Tranche A Term Loan Lender": any Lender having a
Canadian Tranche A Term Loan Commitment hereunder or that holds
outstanding Canadian Tranche A Term Loans.
"Canadian Tranche A Term Loan": as defined in subsection 2.9.
"Canadian Tranche C Maturity Date": December 31, 2003.
"Canadian Tranche C Term Loan Commitment": as to any Canadian
Tranche C Term Loan Lender, its obligation to make a US$ Loan to the
Canadian Borrower on the Closing Date pursuant to subsection 2.9 in an
amount equal to the amount set forth under such Canadian Tranche C Term
Loan Lender's name in Schedule 1.1A opposite the heading "Canadian
Tranche C Term Loan Commitment"; collectively, the "Canadian Tranche C
Term Loan Commitments".
<PAGE> 16
11
"Canadian Tranche C Term Loan Commitment Percentage": as to
any Canadian Tranche C Term Loan Lender, the percentage of the
aggregate Canadian Tranche C Term Loan Commitments constituted by its
Canadian Tranche C Term Loan Commitment or, following the Closing Date,
the percentage of the aggregate outstanding Canadian Tranche C Term
Loans constituted by its Canadian Tranche C Term Loan.
"Canadian Tranche C Term Loan Lender": any Lender having a
Canadian Tranche C Term Loan Commitment hereunder or that holds
outstanding Canadian Tranche C Term Loans.
"Canadian Tranche C Term Loan": as defined in subsection 2.9.
"Canadian Tranche C Term Note": as defined in subsection
2.14(a).
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"Cash Equivalents": (i) securities issued or directly and
fully guaranteed or insured by the United States Government or any
agency or instrumentality thereof or by Canada or any province thereof
(provided that the full faith and credit of the United States or Canada
or any province thereof is pledged in support thereof) having
maturities of not more than 30 days from the date of acquisition, (ii)
time deposits and certificates of deposit having maturities of not more
than 30 days from the date of acquisition of any Lender or of any
commercial bank incorporated in the United States or Canada of
recognized standing the senior unsecured long-term debt of which is
rated at least A or the equivalent thereof by Standard & Poor's Ratings
Services ("S&P") or A2 or the equivalent thereof by Moody's Investors
Service, Inc. ("Moody's") or at least A or the equivalent thereof by
Canadian Bond Rating Service Limited or at least A Middle or the
equivalent thereof by Dominion Bond Rating Service Limited, and having
capital and surplus in excess of $500,000,000, (iii) repurchase
obligations with a term of not more than seven days for underlying
securities of the types described in clauses (i) and (ii) entered into
with any bank meeting the qualifications specified in clause (ii)
above, and (iv) commercial paper rated at least A-1 or the equivalent
thereof by S&P or P-1 or the equivalent thereof by Moody's or the
equivalent thereof by Canadian Bond Rating Service Limited or at least
R-I (Middle or High) or the
<PAGE> 17
12
equivalent thereof by Dominion Bond Rating Service Limited, and in any
case maturing within 30 days after the date of acquisition.
"C$ Equivalent": on any date of determination, with respect to
any amount in US$, the equivalent in C$ of such amount determined by
the Canadian Administrative Agent using the US$ Exchange Rate then in
effect.
"C$ Lender": each Canadian Revolving Credit Lender and
Canadian Tranche A Lender.
"C$ Loans": the collective reference to Canadian Revolving
Credit Loans and Canadian Tranche A Term Loans; for the purposes of
this Agreement, the principal amount of any C$ Loan constituting a
Bankers' Acceptance shall be deemed to be the undiscounted face amount
of such Bankers' Acceptance.
"C$ Prime Loans": C$ Loans at such time as they bear interest
at a rate based upon the C$ Prime Rate.
"C$ Prime Rate": with respect to a C$ Prime Loan, on any day,
the greater of (a) the annual rate of interest announced from time to
time by CIBC as its reference rate then in effect for determining
interest rates on C$ denominated commercial loans in Canada and (b) the
annual rate of interest equal to the sum of (i) the CDOR Rate for such
day and (ii) 0.50% per annum.
"CDOR Rate": on any date, the per annum rate of interest which
is the rate based on the rate applicable to C$ bankers' acceptances for
a term of 30 days (in the case of the definition of "C$ Prime Rate") or
for a term equivalent to the term of the relevant Bankers' Acceptances
(in the case of the definition of "Applicable BA Discount Rate")
appearing on the "Reuters Screen CDOR Page" (as defined in the
International Swap Dealer Association, Inc. definitions, as modified
and amended from time to time) for acceptances of Schedule I banks
under the Bank Act (Canada) as of 10:00 A.M., Local Time, on such date,
or if such date is not a Business Day, then on the immediately
preceding Business Day; provided, however, that if no such rate appears
on the Reuters Screen CDOR Page as contemplated, then the CDOR Rate on
any date shall be calculated as the arithmetic mean of the rates for
the term and amount referred to above applicable to C$ bankers'
acceptances quoted by CIBC as of 10:00 A.M., Local Time, on such date
or, if such date is not a Business Day, then on the immediately
preceding Business Day.
<PAGE> 18
13
"C/D Published Moving Rate": on any particular date, the
latest three-week moving average of daily secondary market morning
offering rates in the United States for three-month certificates of
deposit of major United States money market lenders, such three-week
moving average (adjusted to the basis of a year of 360 days) being
determined weekly for the three-week period ending on the previous
Friday by the US Administrative Agent on the basis of:
(a) such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of New
York (as adjusted for reserves and assessments in the same
manner as the C/D Quoted Rate); or
(b) if such publication shall be suspended or
terminated, the C/D Quoted Rate determined by the US
Administrative Agent on the basis of quotations for such rates
by the US Administrative Agent.
"C/D Quoted Rate": relative to any determination of the C/D
Published Moving Rate in circumstances when publication of the rates
referred to in clause (a) of the definition thereof has been suspended
or terminated, the rate of interest per annum determined by the US
Administrative Agent to be the sum (rounded upward to the nearest
1/16th of 1%) of:
(a) the rate obtained by dividing (i) the average
(rounded upward to the nearest 1/16th of 1%) of the bid rates
quoted to the US Administrative Agent, in CIBC's domestic
secondary market at approximately 10:00 A.M., New York City
time (or as soon thereafter as practicable), from time to time
by three certificate of deposit dealers of recognized standing
selected by the US Administrative Agent in its reasonable
discretion for the purchase at face value of three-month
certificates of deposit of CIBC in an amount approximately
equal or comparable to the amount of CIBC's portion of the US$
Loans outstanding hereunder with respect to which the C/D
Quoted Rate is being determined by (ii) a percentage equal to
100% minus the average of the daily percentages specified
during such period by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement (including, but not limited to, any
marginal reserve requirement) for a member bank of the Federal
Reserve System in respect of liabilities consisting of or
including (among other liabilities) three-month Dollar
nonpersonal time deposits in the United States; and
<PAGE> 19
14
(b) the daily average during such period of the net
annual assessment rates estimated by the US Administrative
Agent for determining the then current annual assessment
payable by CIBC to the FDIC for FDIC's insuring Dollar
deposits of CIBC in the United States.
"CIBC": Canadian Imperial Bank of Commerce, a Canadian
chartered bank, or one or more of its agencies, branches or affiliates
in its or their respective capacity or capacities, as the case may be,
as a Lender or Lenders hereunder.
"Class": when used with respect to any Loans, refers to
whether such Loans constitute US Revolving Credit Loans, US Tranche A
Term Loans, US Tranche B Term Loans, US Tranche C Term Loans, Canadian
Revolving Credit Loans, Canadian Tranche A Loans or Canadian Tranche C
Loans, and, for purposes of this definition, the US L/C Reimbursement
Obligations shall be deemed to be part of the Class which includes the
US Revolving Credit Loans, and the Canadian L/C Reimbursement
Obligations shall be deemed to be part of the Class which includes the
Canadian Revolving Credit Loans.
"Closing Date": the date on which the conditions precedent set
forth in subsection 6.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by
any Security Document.
"Commitments": the collective reference to the Revolving
Credit Commitments, the Term Loan Commitments and the L/C Commitments;
individually, a "Commitment".
"Commitment Percentage": as to any Lender, the percentage of
the aggregate Revolving Credit Commitments and Term Loan Commitments
constituted by such Lender's Revolving Credit Commitment and Term Loan
Commitment, or, following the Closing Date, the percentage representing
a fraction the numerator of which is the sum of (i) the aggregate
principal amount of such Lender's Term Loans then outstanding plus (ii)
the US Revolving Credit Commitment of such Lender (or, following the
termination or expiration of the US Revolving Credit Commitments, the
sum of (x) the aggregate principal amount of such Lender's US Revolving
Credit Loans then outstanding plus (y) such Lender's US Revolving
Commitment Percentage of all
<PAGE> 20
15
US L/C Obligations then outstanding) plus (iii) the Canadian Revolving
Credit Commitment of such Lender (or, following the termination or
expiration of the Canadian Revolving Credit Commitments, the sum of (x)
the aggregate principal amount of such Lender's Canadian Revolving
Credit Loans then outstanding plus (y) such Lender's Canadian Revolving
Commitment Percentage of all Canadian L/C Obligations then
outstanding), and the denominator of which is the sum of (i) the
aggregate principal amount of Term Loans of all Lenders then
outstanding plus (ii) the aggregate Revolving Credit Commitments of all
Lenders (or, following the termination or expiration of the Revolving
Credit Commitments, the sum of (x) the aggregate principal amount of
all Revolving Credit Loans then outstanding plus (y) the aggregate
principal amount of all L/C Obligations then outstanding); all amounts
denominated in C$ shall be included in any computations pursuant to
this definition at the US$ Equivalent thereof.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or is part of a group which includes
the Company and which is treated as a single employer under Section
414(b) or (c) of the Code.
"Compliance Certificate": as defined in subsection 7.2(b).
"Consolidated Current Assets": on any date, with respect to
the Company and its Subsidiaries on a consolidated basis, all assets of
the Company and its Subsidiaries on such date which would, in
accordance with GAAP, be classified on a consolidated balance sheet of
the Company as "current assets".
"Consolidated Current Liabilities": on any date, with respect
to the Company and its Subsidiaries on a consolidated basis, all
liabilities of the Company and its Subsidiaries on such date which, in
accordance with GAAP, would be classified on a consolidated balance
sheet of the Company as "current liabilities".
"Consolidated Fixed Charges": for any period, an amount equal
to the sum of (a) scheduled payments of principal of the Term Loans
during such period, (b) the excess, if any, of the aggregate principal
amount of Revolving Credit Loans outstanding on the first day of such
period over the maximum aggregate amount of the Revolving Credit
Commitments on the last day of such period, giving effect to the
reductions required under subsection 2.7(b) but not to any reductions
thereof made during such period pursuant to subsection 2.7(a) or
subsection 4.3, (c) Consolidated Interest Expense for such period, (d)
capital expenditures made by the Company and its
<PAGE> 21
16
Subsidiaries during such period as permitted by subsection 8.9 and (e)
taxes based upon income deducted in determining Consolidated Net Income
for such period.
"Consolidated Interest Expense": for any period, the amount
paid in cash during such period in respect of interest expense of the
Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Lease Expense": for any period, the aggregate
amount of fixed and contingent rentals payable by the Company and its
Subsidiaries, determined on a consolidated basis in accordance with
GAAP, for such period with respect to leases of real and personal
property (net of income from sub-leases thereof, but including taxes,
insurance, maintenance and similar expenses which the lessee is
obligated to pay under the terms of such leases), excluding, however,
obligations under Financing Leases and leases in respect of Advertising
Displays.
"Consolidated Net Income": for any period, the net income (or
deficit) of the Company and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Operating Cash Flow": for any period, an amount
equal to the sum of (a) the Consolidated Net Income for such period,
disregarding all items (other than actual cash losses) which should be
classified as extraordinary, unusual or non-recurring and proceeds from
the sale of assets, all determined on a consolidated basis in
accordance with GAAP, plus (b) all amounts deducted in computing such
Consolidated Net Income in respect of (i) Consolidated Interest Expense
(after giving effect to all Hedging Agreements and payments and
receipts thereunder), (ii) non-cash amortization expense (including
amortization of noncurrent assets and non-cash charges relating to
billboard removal), (iii) depreciation and (iv) income taxes.
"Consolidated Working Capital": on any date, with respect to
the Company and its Subsidiaries on a consolidated basis, the
Consolidated Current Assets (other than cash and Cash Equivalents) of
the Company and its Subsidiaries on such date, minus the Consolidated
Current Liabilities (other than the current portion of long term
Indebtedness) of the Company and its Subsidiaries on such date.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
<PAGE> 22
17
"Default": any of the events specified in Section 9, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Denver Disposition": the sale by the Company of all or
substantially all of the outdoor advertising assets of the Company
that, prior to the Closing Date and without giving effect to the
Acquisition, serve the Denver, Colorado advertising market.
"Designated Holder": each of (i) William S. Levine, any trust
solely for the benefit of Mr. Levine or his immediate family members,
or any partnership all the ownership interests in which are
beneficially owned or controlled by any of the foregoing, and (ii)
Arthur R. Moreno, any trust solely for the benefit of Mr. Moreno or his
immediate family members, or any partnership all the ownership
interests in which are beneficially owned or controlled by any of the
foregoing; provided that with respect to any such trust or partnership
either Mr. Levine or Mr. Moreno, as the case may be, shall at all times
directly or indirectly have the exclusive power to direct the voting of
the shares of Capital Stock of the Company held by such trust or
partnership.
"Division": as defined in the recitals hereto.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Draft": a blank bill of exchange, within the meaning of the
Bills of Exchange Act (Canada), in substantially the form set forth in
Exhibit F, drawn by the Canadian Borrower on a C$ Lender, denominated
in C$ and bearing such distinguishing letters and numbers as such C$
Lender may determine, but which at such time, except as otherwise
provided herein, has not been completed or accepted by such C$ Lender.
"Drawing": the creation and purchase of Bankers' Acceptances
and/or the purchase of completed Drafts, by the C$ Lenders pursuant to
subsection 2.17.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority
or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any
time hereafter be in effect, including, without limitation, CERCLA;
RCRA; the Hazardous Materials Transportation Act, as amended, 49 U.S.C.
Section 1801 et seq.; the Federal Water Pollution Control Act, as
amended, 33 U.S.C. Section 1251 et seq.; the Toxic Substances Control
Act,
<PAGE> 23
18
15 U.S.C. Section 2601 et seq.; the Clean Air Act, 42 U.S.C. Section
7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 3808 et
seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.;
the Emergency Planning and Community Right-To-Know-Act of 1986, 42
U.S.C. Section 11001 et seq.; any applicable state and local or foreign
counterparts or equivalents; and any Canadian federal, provincial,
municipal or local counterparts or equivalents thereof, including the
Canadian Environmental Protection Act, as amended, the Environmental
Protection Act (Ontario), as amended, and the Ontario Water Resources
Act and any foreign counterparts or equivalents thereof; and the terms
and conditions of any environmental permit issued pursuant to any
Environmental Law to either Borrower or its Subsidiaries or any
facility owned or operated by such Borrower or its Subsidiaries.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by
a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined by the Administrative Agent to be the arithmetic mean
(rounded to the nearest 1/100th of 1%) of the offered rates for
deposits in Dollars with a term comparable to such Interest Period that
appears on the Telerate British Bankers Assoc. Interest Settlement
Rates Page (as defined below) at approximately 11:00 A.M., London time,
on the second full Business Day preceding the first day of such
Interest Period; provided, however, that if there shall at any time no
longer exist a Telerate British Bankers Assoc. Interest Settlement
Rates Page, "Eurodollar Base Rate" shall mean, with respect to each day
during each Interest Period pertaining to a Eurodollar Loan, the rate
per annum equal to the rate at which CIBC is offered Dollar deposits at
or about 10:00 A.M., New York City time, two Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market
where the eurodollar and foreign currency and exchange operations in
respect of its Eurodollar Loans are then being conducted for delivery
on the first day of such Interest Period for the number of days
comprised therein and in an amount
<PAGE> 24
19
comparable to the amount of its Eurodollar Loan to be outstanding
during such Interest Period. "Telerate British Bankers Assoc. Interest
Settlement Rates Page" shall mean the display designated as Page 3750
on the Telerate System Incorporated Service (or such other page as may
replace such page on such service for the purpose of displaying the
rates at which Dollar deposits are offered by leading banks in the
London interbank deposit market).
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Excess Cash Flow": with respect to any fiscal year of the
Company, an amount equal to (a) Consolidated Net Income for such fiscal
year, plus (b) amortization and depreciation for such fiscal year, plus
(c) extraordinary, unusual or non-recurring losses for such fiscal
year, minus (d) extraordinary, unusual or non-recurring gains for such
fiscal year, minus (e) capital expenditures made in accordance with
subsection 8.9 during such fiscal year, minus (f) payments of principal
on Indebtedness resulting in a permanent reduction of such Indebtedness
during such fiscal year (other than mandatory prepayments pursuant to
subsection 4.3), minus (g) amounts arising from sales of assets
permitted by subsection 8.6 during such fiscal year to the extent
included in Consolidated Net Income and paid to the Lenders as a
mandatory prepayment pursuant to subsection 4.3(c), minus (h) increases
in Consolidated Working Capital for such fiscal year, plus (i)
decreases in Consolidated Working Capital for such fiscal year.
"Existing Credit Agreement": as defined in the recitals
hereto.
"Fee Mortgages": the Fee Mortgages to be executed and
delivered by the Company and certain Subsidiaries of the Company on the
Closing Date covering the
<PAGE> 25
20
assets listed on Schedule 1.1C under the heading "Fee Mortgage
Properties", in substantially the form of Exhibit C-1 attached hereto,
as the same may be amended, supplemented or otherwise modified from
time to time.
"Federal Funds Rate": for any particular date, an interest
rate per annum equal to the interest rate (rounded upward to the
nearest 1/16th of 1%) offered in the interbank market to the US
Administrative Agent as the overnight Federal Funds Rate at or about
10:00 A.M., New York City time, on such day (or, if such day is not a
Business Day, for the next preceding Business Day).
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"GAAP": generally accepted accounting principles in the United
States of America on the date hereof, except that, for purposes of
subsection 7.1, such term shall mean such principles in effect from
time to time.
"Governmental Authority": any nation or government, any state,
province or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including the
National Association of Insurance Commissioners.
"Guarantee": each of (a) the US Guarantee and Collateral
Agreement and (b) any other guarantee hereafter delivered to either
Administrative Agent guaranteeing the obligations and liabilities of
each of the Loan Parties hereunder or under any other Loan Documents,
including, without limitation, any guarantee delivered pursuant to
subsection 7.10.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), without duplication, any obligation of (a) the guaranteeing
person or (b) another Person (including, without limitation, any bank
under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations
(the "primary obligations") of any other third Person (the "primary
obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of the guaranteeing person, whether
or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to
advance or supply funds
<PAGE> 26
21
(1) for the purchase or payment of any such primary obligation or (2)
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business or indemnities issued in the ordinary course of
business not to exceed $150,000 in the aggregate for all such
indemnities. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of
the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by the Company in good faith.
"Guarantor": any Person which is now or hereafter a party to a
Guarantee.
"Hazardous Materials": any hazardous materials, hazardous
wastes, hazardous constituents, hazardous or toxic substances,
petroleum products (including crude oil or any fraction thereof),
defined or regulated as such in or under any Environmental Law,
including, without limitation, (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated
biphenyls, and radon gas in excess of four picocuries per liter; (b)
any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous waste," "restricted hazardous waste,"
"toxic substances," "toxic pollutants," "contaminants," or
"pollutants," or words of similar import, under any applicable
Environmental Law; and (c) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any
governmental authority.
"Hedging Agreements": (a) any interest rate protection
agreement, interest rate future, interest rate option, interest rate
swap, interest rate cap or other interest rate hedge or arrangement
under which the Company or any of its Subsidiaries is a party or
<PAGE> 27
22
a beneficiary and (b) any agreement or arrangement designed to limit or
eliminate the risk and/or exposure of either of the Company or any of
its Subsidiaries to fluctuations in currency exchange rates.
"Hedging Lender": any Lender, or any Affiliate of any Lender,
which from time to time enters into a Hedging Agreement with either of
the Company or any of its Subsidiaries.
"Houston Acquisition": the consummation of the acquisition of
the outdoor advertising assets serving the Houston, Texas, market
contemplated by the Option in respect thereof referred to in the
Purchase Agreement in accordance with the terms thereof and receipt by
the Administrative Agent of evidence satisfactory to it that all
conditions precedent set forth in subsection 6.1 applicable to the
assets subject to such acquisition and the transactions contemplated
thereby have been satisfied to the same extent as if such assets and
such transactions had been included in the Acquisition consummated on
the Closing Date and covered by subsection 6.1 for the purposes
thereof.
"Houston Disposition": the sale by the Company of either (i)
all or a portion of the assets representing outdoor advertising assets
serving the Houston, Texas, market or (ii) the sale by the Company of
the option in respect thereof described in and in accordance with the
Purchase Agreement.
"Hypothec": that certain agreement creating an immoveable and
movable hypothec in respect of the immovable and movable property
described therein, to be made by the Canadian Borrower in favor of the
Canadian Administrative Agent on its behalf and as agent for the other
Lenders named therein, substantially in the form thereof attached
hereto as part of Exhibit B-2.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar
instrument, (c) all obligations of such Person under Financing Leases,
(d) all obligations of such Person in respect of acceptances issued or
created for the account of such Person and in respect of unpaid
reimbursement obligations with respect to drawings made under any
letter of credit issued for the account of such Person, (e) all
liabilities secured by any Lien on any property owned by such Person
even though such Person has not assumed or otherwise
<PAGE> 28
become liable for the payment thereof and (f) for purposes of
subsection 8.2 and Section 9(e), all obligations of such Person in
respect of Hedging Agreements.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period, and (c) as
to any Eurodollar Loan having an Interest Period longer than three
months, each day which is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such
Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the
borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three, six or, if
acceptable to each of the Lenders, twelve months thereafter,
as selected by the relevant Borrower in its notice of
borrowing or notice of conversion, as the case may be, given
with respect thereto; and
(ii) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three, six or, if
acceptable to each of the Lenders, twelve months thereafter,
as selected by the relevant Borrower by irrevocable notice to
the applicable Administrative Agent not less than three
Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar
Loan would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
<PAGE> 29
24
(2) any Interest Period that would otherwise extend
beyond (a) the US Revolving Credit Commitment Termination Date
or the Canadian Revolving Credit Commitment Termination Date,
as the case may be, (in the case of Revolving Credit Loans)
shall end on the U.S. Revolving Credit Commitment Termination
Date or Canadian Revolving Credit Commitment Termination Date,
as the case may be, (b) the U.S. Tranche A Maturity Date or
the Canadian Tranche A Maturity Date, as the case may be (in
the case of the U.S. Tranche A Term Loans or the Canadian
Tranche A Term Loans, as the case may be) shall end on the
U.S. Tranche A Maturity Date or the Canadian Tranche A
Maturity Date, as the case may be, (c) the US Tranche B
Maturity Date (in the case of the US Tranche B Term Loans)
shall end on the US Tranche B Maturity Date, or (d) the U.S.
Tranche C Maturity Date or the Canadian Tranche C Maturity
Date, as the case may be (in the case of the U.S. Tranche C
Term Loans or the Canadian Tranche C Term Loans, as the case
may be) shall end on the U.S. Tranche C Maturity Date or the
Canadian Tranche C Maturity Date, as the case may be;
(3) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month; and
(4) each Borrower shall select Interest Periods so as
not to require a payment or prepayment of any Eurodollar Loan
during an Interest Period for such Loan.
"Interim Adjustments": for the first three full fiscal
quarters of the Company following the Closing Date, the Total Leverage
Ratio and the Senior Leverage Ratio shall be calculated by including in
Consolidated Operating Cash Flow for the applicable four-quarter period
the actual Consolidated Operating Cash Flow for the portion of such
period of the Company and its Subsidiaries occurring prior to the
Closing Date, on a pro forma basis assuming (i) that the Acquisition
had been consummated on the first day of such period and (ii)
adjustments to such pro forma Consolidated Operating Cash Flow for such
pre-Closing period attributable to the Company's projected cost savings
resulting from the Acquisition as determined by Deloitte & Touche LLP
and reasonably acceptable to the US Administrative Agent.
"Issuing Lenders": the collective reference to the US Issuing
Lender and the Canadian Issuing Lender.
<PAGE> 30
25
"Leasehold Mortgages": the Leasehold Mortgages to be executed
and delivered by the Company and certain Subsidiaries of the Company on
the Closing Date with respect to the assets listed on Schedule 1.1C
under the heading "Leasehold Mortgage Properties", in substantially the
form attached hereto as Exhibit C-2, as the same may be amended,
supplemented or otherwise modified from time to time.
"L/C Commitments": the collective reference to the US L/C
Commitments and the Canadian L/C Commitments.
"L/C Fee Payment Date": the last day of each March, June,
September and December.
"L/C Obligations": the collective reference to the US L/C
Obligations and the Canadian L/C Obligations.
"L/C Participants": the collective reference the US L/C
Participants and the Canadian L/C Participants.
"L/C Participating Interest": with respect to any Letter of
Credit (a) in the case of the Issuing Lender with respect thereto, its
interest in such Letter of Credit and any Application relating thereto
after giving effect to the granting of participating interests therein,
if any, pursuant hereto and (b) in the case of each L/C Participant,
its undivided participating interest in such Letter of Credit and any
Application relating thereto.
"L/C Reimbursement Obligations": the collective reference to
the US L/C Reimbursement Obligations and the Canadian L/C Reimbursement
Obligations.
"Letters of Credit": the collective reference to the US
Letters of Credit and the Canadian Letters of Credit.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement (other than those provisions of
the Company's Certificate of Incorporation in effect on the date hereof
which provide for preferential rights of any class of the Company's
preferred or common stock over any other class of the Company's
preferred or common stock) of any kind or nature whatsoever (including,
without limitation, any
<PAGE> 31
26
conditional sale or other title retention agreement and any Financing
Lease having substantially the same economic effect as any of the
foregoing).
"Loan": any loan made, including, in the case of C$ Loans, any
Bankers' Acceptance purchased or accepted, by any Lender pursuant to
this Agreement.
"Loan Documents": this Agreement, any Notes, the Applications,
each Bankers' Acceptance, the Security Documents and each Guarantee.
"Loan Parties": the Company and each Subsidiary of the Company
which is a party to a Loan Document.
"Majority Lenders": at any time, Lenders the Commitment
Percentages of which aggregate more than 50%.
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise)
or prospects of the Company and its Subsidiaries taken as a whole or
(b) the validity or enforceability of this Agreement, any of the Notes
or any Application or any of the other Loan Documents or the rights or
remedies of the Administrative Agents or the Lenders hereunder or
thereunder.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Mortgages": the collective reference to each of the Mortgages
executed and delivered by the Company pursuant to the Existing Credit
Agreement, as amended by a Mortgage Supplement, and to each of the Fee
Mortgages and the Leasehold Mortgages, as the same may be amended,
supplemented or otherwise modified from time to time.
"Mortgage Supplement": each amended and restated mortgage (or
equivalent document, as each jurisdiction may require) amending each
Mortgage (as defined in the Existing Credit Agreement) under the
Existing Credit Agreement, to be executed and delivered by the Company
on the Closing Date, in substantially the form of Exhibit C-1 or C-2,
as the case may be (as such form may be modified to reflect its
character as an amendment and restatement).
<PAGE> 32
27
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) with respect to any sale or other
disposition of assets by the Company or any of its Subsidiaries, the
net amount equal to the aggregate amount received in cash (including
any cash received by way of deferred payment pursuant to a note
receivable, other non-cash consideration or otherwise, but only as and
when such cash is so received) in connection with such sale or other
disposition minus the sum of (i) the reasonable fees (including,
without limitation, reasonable attorneys' fees), commissions and other
out-of-pocket expenses (as evidenced by supporting documentation
reasonably satisfactory to the Administrative Agent) incurred or paid
for by the Company or such Subsidiary in connection with such sale or
other disposition and (ii) federal, state and local taxes incurred in
connection with such sale or other disposition, whether payable at such
time or thereafter.
(b) with respect to any issuance, sale or other disposition of
any Capital Stock or debt security by the Company or any of its
Subsidiaries (other than to the Company or any of its Subsidiaries),
the net amount equal to the aggregate amount received in cash in
connection with such issuance, sale or other disposition minus the sum
of (i) the reasonable fees, commissions and other out-of-pocket
expenses incurred by the Company or such Subsidiary in connection with
such issuance, sale or other disposition and (ii) federal, state and
local taxes incurred in connection with such issuance, sale or other
disposition, whether payable at such time or thereafter.
"Non-Excluded Taxes": as defined in subsection 4.11.
"Notes": the collective reference to the U.S. Revolving Credit
Notes and the Term Notes, if any.
"Obligations": the collective reference to the unpaid
principal of and interest (including, without limitation, interest
accruing after the maturity of the Loans and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to either
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) on the Loans and all other
obligations and liabilities of the Borrowers to the Administrative
Agents and the Lenders and their respective Affiliates, including,
without limitation, the L/C Reimbursement Obligations, Bankers'
Acceptances purchased or accepted and then outstanding and any
obligation of the Company under any Hedging Agreement entered into with
any Hedging Lender, whether direct or
<PAGE> 33
28
indirect, absolute or contingent, due or to become due, or now existing
or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, the Notes, the other Loan Documents or any
Hedging Agreement entered into with any Hedging Lender or any other
document made, delivered or given in connection herewith or therewith,
in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all reasonable fees and disbursements
of counsel to the Administrative Agents or to the Lenders that are
required to be paid by either Borrower pursuant to the terms hereof or
any other Loan Document).
"Participant": as defined in subsection 11.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permanent Subordinated Indebtedness": Indebtedness of the
Company that replaces or refinances the Subordinated Bridge
Indebtedness, or into which such Indebtedness is exchanged or
converted, in each case (i) having no maturity, mandatory redemption,
repurchase or defeasance, or sinking fund requirement falling due prior
to the eighth anniversary of the Closing Date (ii) bearing interest at
a total rate per annum not in excess of 20% per annum and bearing cash
interest at a rate per annum not in excess of 15% per annum and (iii)
having other material terms no more restrictive on the Company or less
favorable to the Company or the Lenders than those set forth in the
Senior Subordinated Indenture.
"Permitted Acquisitions": any acquisition made on or after the
later of the Bridge Take-Out Date and January 1, 1997 by the Company or
any of its Subsidiaries, whether through a purchase of Capital Stock or
assets or through a merger, consolidation or amalgamation, of another
Person or the assets constituting an operating business unit of another
Person, provided that (a)(i) in the event that the Total Leverage Ratio
as at the end of either of the two consecutive fiscal quarters for
which financial statements have been delivered pursuant to subsection
7.1 most recently ended prior to the consummation of any such
acquisition is equal to or greater than 5.0:1.0, such acquisition shall
not be permitted to the extent that the aggregate amount of
consideration (other than consideration consisting of shares of common
stock of the Company) given by the Company and its Subsidiaries for all
such acquisitions in the fiscal year of the Company during which such
acquisition would be consummated would exceed $7,500,000, (ii) in the
event that the Total Leverage Ratio as at the end of the two
consecutive fiscal quarters for which financial statements have been
<PAGE> 34
29
delivered pursuant to subsection 7.1 most recently ended prior to the
consummation of any such acquisition is less than 5.0:1.0, such
acquisition shall not be permitted to the extent that the aggregate
amount of consideration (other than consideration consisting of shares
of common stock of the Company) given by the Company and its
Subsidiaries for all such acquisitions in the fiscal year of the
Company during which such acquisition would be consummated would exceed
$15,000,000, (b)(i) at the time of such acquisition and after giving
effect thereto no Default or Event of Default shall have occurred and
be continuing and (ii) the business so acquired operates within markets
in which the Company and its Subsidiaries are operating at the time of
such acquisition, and (c) in the case of any acquisition the
consideration for which would cause the aggregate amount of
consideration for all such acquisitions in any fiscal year of the
Company to exceed $3,000,000 (other than consideration consisting of
shares of common stock of the Company), the Company shall have provided
to each Lender reasonably prior to the date of consummation of such
acquisition (x) all then available information relating to such
business, including, without limitation, historical and projected
revenue and cash flow information and information regarding Advertising
Displays such as type, number, location and occupancy and (y) pro forma
projections showing compliance with this Agreement after giving effect
to such acquisition.
"Permitted Liens": Liens permitted under subsection 8.3.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Company or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Properties": as defined in subsection 5.17.
"Purchase Agreement": as defined in the recitals hereto.
"Refunding Bankers' Acceptance": as defined in subsection
2.17(c).
"Register": as defined in subsection 11.6(d).
<PAGE> 35
30
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .13, .14, .16, .18, .19 or
.20 of PBGC Reg. Section 2615.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": the chairman of the Board of Directors
or the chief executive officer of the relevant Borrower or, with
respect to financial matters, the chief financial officer of the
relevant Borrower.
"Revolving Credit Commitments": the collective reference to
the US Revolving Credit Commitments and the Canadian Revolving Credit
Commitments.
"Revolving Credit Loans": the collective reference to the US
Revolving Credit Loans and the Canadian Revolving Credit Loans.
"SEC": United States Securities and Exchange Commission.
"Securities Act": the Securities Act of 1933, as amended.
"Security Documents": the collective reference to the Canadian
Security Documents, the US Guarantee and Collateral Agreement, the
Mortgages, the Mortgage Supplements and all other security documents
hereafter delivered to either Administrative Agent granting a Lien on
any asset or assets of any Person to secure the obligations and
liabilities of either or both of the Borrowers hereunder or under any
of the other Loan Documents or to secure any guarantee of any such
obligations and liabilities, including, without limitation, any
security document delivered pursuant to subsection 7.10.
<PAGE> 36
31
"Sellers" as defined in the recitals.
"Senior Leverage Ratio": as of any date of determination, the
ratio of (a) the sum (on a consolidated basis without duplication) of
(i) all Indebtedness of the Company and its Subsidiaries outstanding on
such date other than any Subordinated Indebtedness and (ii) all
Guarantee Obligations of the Company and its Subsidiaries outstanding
on such date in respect of Indebtedness of any third Person other than
any subordinated Guarantee Obligations in respect of Subordinated
Indebtedness to (b) Consolidated Operating Cash Flow for the then most
recently ended period of four consecutive calendar quarters for which
financial statements shall have been delivered to the Lenders pursuant
to subsection 7.1, provided that, for any such period that includes
periods prior to the Closing Date, Consolidated Operating Cash Flow
shall be adjusted by giving effect to the Interim Adjustments with
respect thereto.
"Senior Notes": the $115,000,000 in aggregate principal amount
of 10-3/4% Senior Notes due 2003 issued by the Company pursuant to the
Senior Note Indenture.
"Senior Note Indenture": the Indenture dated as of August 15,
1993, between the Company and United States Trust Company of New York,
relating to the Senior Notes.
"Senior Subordinated Indenture": the Senior Subordinated
Indenture, substantially in the form attached to the Subordinated
Bridge Agreement as Exhibit V, pursuant to which Take-Out Securities
(as defined in the Subordinated Bridge Agreement) may be issued.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent" and "Solvency": with respect to any Person on a
particular date, the condition that on such date, (a) the fair value of
the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of
such Person, (b) the present fair salable value of the assets of such
Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability
to pay as such debts and liabilities mature, and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small amount of capital.
<PAGE> 37
32
"Subordinated Bridge Agreement": the Senior Subordinated
Credit Agreement, dated as of July 9, 1996, among the Company, the
Guarantors parties thereto and Canadian Imperial Bank of Commerce, as
in effect on the date hereof.
"Subordinated Indebtedness": the collective reference to (i)
Indebtedness under the Subordinated Bridge Agreement and (ii) Permanent
Subordinated Indebtedness.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Company in existence on the date of
this Agreement.
"Subsidiary Guarantor": each Subsidiary of the Company that is
a party to the US Guarantee and Collateral Agreement or any other
Guarantee as a guarantor thereunder.
"Term Loans": the collective reference to the US Tranche A
Term Loans, the US Tranche B Term Loans, the US Tranche C Term Loans,
the Canadian Tranche A Term Loans and the Canadian Tranche C Term
Loans.
"Term Loan Commitments": the collective reference to the US
Tranche A Term Loan Commitments, the Canadian Tranche A Term Loan
Commitments, the US Tranche B Term Loan Commitments, the US Tranche C
Term Loan Commitments and the Canadian Tranche C Term Loan Commitments;
collectively, as to all the Term Loan Lenders, the "Term Commitments."
"Term Loan Lenders": the collective reference to the Tranche A
Term Loan Lenders, the US Tranche B Term Loan Lenders and the Tranche C
Term Loan Lenders.
"Term Notes": the collective reference to the US Tranche A
Term Notes, the US Tranche B Term Notes, the US Tranche C Term Notes
and the Canadian Tranche C Term Notes.
<PAGE> 38
33
"Tobacco Advertising Revenue": the gross revenue the Company
and its Subsidiaries derive from posting tobacco advertisements on
Advertising Displays.
"Total Leverage Ratio": as of any date of determination, the
ratio of (a) the sum (on a consolidated basis without duplication) of
(i) all Indebtedness of the Company and its Subsidiaries outstanding on
such date and (ii) all Guarantee Obligations of the Company and its
Subsidiaries outstanding on such date in respect of Indebtedness of any
third Person to (b) Consolidated Operating Cash Flow for the then most
recently ended period of four consecutive calendar quarters for which
financial statements shall have been delivered to the Lenders pursuant
to subsection 7.1, provided that for any such period that includes
periods prior to the Closing Date, Consolidated Operating Cash Flow
shall be adjusted by giving effect to the Interim Adjustments with
respect thereto.
"Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such Loans
shall originally have been made on the same day).
"Tranche A Term Loans": the collective reference to the US
Tranche A Term Loans and the Canadian Tranche A Term Loans.
"Tranche C Term Loans": the collective reference to the US
Tranche C Term Loans and the Canadian Tranche C Term Loans.
"Transferee": as defined in subsection 11.6(f).
"Type": (a) as to any US$ Loan, its nature as an ABR Loan or a
Eurodollar Loan and (b) as to any C$ Loan, its nature as a C$ Prime
Loan or a Bankers' Acceptance.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"US Administrative Agent": Canadian Imperial Bank of Commerce,
New York Agency, together with its affiliates, as the arranger of the
Commitments and as the administrative agent for the US$ Lenders under
this Agreement and the other Loan Documents.
<PAGE> 39
34
"US Dollars" and "US$": dollars in lawful currency of the
United States of America.
"US$ Equivalent": on any date of determination, with respect
to any amount in C$, the equivalent in US Dollars of such amount,
determined by the US Administrative Agent using the Canadian Exchange
Rate then in effect.
"US$ Exchange Rate": on a particular date, the rate at which
US$ may be exchanged into C$, determined by reference to the Bank of
Canada noon rate as published on the Reuters Screen page BOFC on the
immediately preceding Business Day. In the event that such rate does
not appear on such Reuters page, the "US$ Exchange Rate" shall be
determined by reference to any other means (as selected by the relevant
Administrative Agent) by which such rate is quoted or published from
time to time by the Bank of Canada (in each case as in effect at or
about 12:00 Noon, Local Time, on the Business Day immediately preceding
the relevant date of determination); provided, that if at the time of
any such determination, for any reason, no such exchange rate is being
quoted or published, the relevant Administrative Agent may use any
reasonable method as it deems applicable to determine such rate, and
such determination shall be conclusive absent manifest error.
"US$ Lender": each US Revolving Credit Lender, US Tranche A
Term Loan Lender, US Tranche B Term Loan Lender, US Tranche C Term Loan
Lender and Canadian Tranche C Term Loan Lender.
"US$ Loans": the collective reference to the US Revolving
Credit Loans, US Tranche A Term Loans, US Tranche B Term Loans, US
Tranche C Term Loans and Canadian Tranche C Term Loans.
"US Guarantee and Collateral Agreement": the US Guarantee and
Collateral Agreement to be executed and delivered by the Company and
each of its Subsidiaries other than Subsidiaries of the Canadian
Borrower existing on the Closing Date (it being understood that the
Canadian Borrower shall be party thereto in respect of its
acknowledgement of the pledge therein of its Capital Stock and not as
guarantor or grantor of Collateral) on the Closing Date, in
substantially the form attached hereto as Exhibit B, as the same may be
amended, supplemented or otherwise modified from time to time.
"US Issuing Lender": CIBC, in its capacity as issuer of any US
Letter of Credit.
<PAGE> 40
35
"US L/C Commitment": US$30,000,000.
"US L/C Obligations": at any time, an amount equal to the sum
of (a) the aggregate then undrawn and unexpired amount of the then
outstanding US Letters of Credit and (b) the aggregate amount of
drawings under US Letters of Credit which have not then been reimbursed
pursuant to subsection 3.5(a).
"US L/C Participants": the collective reference to all the US
Revolving Credit Lenders other than the US Issuing Lender.
"US L/C Reimbursement Obligation": the obligation of the
Company to reimburse the US Issuing Lender pursuant to subsection
3.5(a) for amounts drawn under US Letters of Credit.
"US Letters of Credit": as defined in subsection 3.1(a).
"US Revolving Credit Commitment": as to any US Revolving
Credit Lender, its obligation to make US Revolving Credit Loans to,
and/or issue or participate in US Letters of Credit issued on behalf
of, the US Borrower in an aggregate amount not to exceed at any one
time outstanding the amount set forth under such US Revolving Credit
Lender's name on Schedule 1.1A opposite the heading "US Revolving
Credit Commitment" or, in the case of any Lender that is an Assignee,
the amount of the assigning Lender's US Revolving Credit Commitment
assigned to such Assignee pursuant to subsection 11.6 (in each case as
such amount may be adjusted from time to time as provided herein).
"US Revolving Credit Commitment Percentage": as to any US
Revolving Credit Lender, the percentage of the aggregate US Revolving
Credit Commitments constituted by its US Revolving Credit Commitment
(or, if the US Revolving Credit Commitments have terminated or expired,
the percentage which (i) the sum of (a) such Lender's then outstanding
US Revolving Credit Loans plus (b) such Lender's interests in the
aggregate US L/C Obligations then outstanding then constitutes of (ii)
the sum of (a) the aggregate US Revolving Credit Loans of all the US
Revolving Credit Lenders then outstanding plus (b) the aggregate US L/C
Obligations then outstanding).
"US Revolving Credit Commitment Period": the period from and
including the Closing Date to but not including the US Revolving Credit
Commitment Termination Date.
<PAGE> 41
36
"US Revolving Credit Commitment Termination Date": the earlier
of (a) December 31, 2001 or, if such date is not a Business Day, the
Business Day next preceding such date and (b) the date upon which the
US Revolving Credit Commitments shall be terminated pursuant hereto.
"US Revolving Credit Lender": any Lender having a US Revolving
Credit Commitment or that holds outstanding US Revolving Credit Loans
or US L/C Participating Interests hereunder.
"US Revolving Credit Loans": as defined in subsection 2.1.
"US Revolving Credit Notes": as defined in subsection 2.3.
"US Term Loan Lenders": the collective reference to the US
Tranche A Term Loan Lenders, the US Tranche B Term Loan Lenders, and
the US Tranche C Term Loan Lenders.
"US Term Loans": as defined in subsection 2.8.
"US Tranche A Maturity Date": December 31, 2000.
"US Tranche A Term Loan Commitment": as to any US Tranche A
Term Loan Lender, its obligation to make a US Tranche A Term Loan to
the Company pursuant to subsection 2.9 in an amount equal to the amount
set forth under such US Tranche A Term Loan Lender's name in Schedule
1.1A opposite the heading "US Tranche A Term Loan Commitment";
collectively, the "US Tranche A Term Loan Commitments".
"US Tranche A Term Loan Commitment Percentage": as to any US
Tranche A Term Loan Lender, the percentage of the aggregate US Tranche
A Term Loan Commitments constituted by its US Tranche A Term Loan
Commitment or, following the Closing Date, the percentage of the
aggregate outstanding US Tranche A Term Loans constituted by its US
Tranche A Term Loan.
"US Tranche A Term Loan Lender": any Lender having a US
Tranche A Term Loan Commitment hereunder or that holds outstanding US
Tranche A Term Loans.
"US Tranche A Term Loan": as defined in subsection 2.8.
<PAGE> 42
37
"US Tranche A Term Note": as defined in subsection 2.10(a).
"US Tranche B Maturity Date": December 31, 2002.
"US Tranche B Term Loan Commitment": as to any US Tranche B
Term Loan Lender, its obligation to make a US Tranche B Term Loan to
the Company pursuant to subsection 2.9 in an amount equal to the amount
set forth under such US Tranche B Term Loan Lender's name in Schedule
1.1A opposite the heading "US Tranche B Term Loan Commitment";
collectively, the "US Tranche B Term Loan Commitments".
"US Tranche B Term Loan Commitment Percentage": as to any US
Tranche B Term Loan Lender, the percentage of the aggregate US Tranche
B Term Loan Commitments constituted by its US Tranche B Term Loan
Commitment or, following the Closing Date, the percentage of the
aggregate outstanding US Tranche B Term Loans constituted by its US
Tranche B Term Loan.
"US Tranche B Term Loan Lender": any Lender having a US
Tranche B Term Loan Commitment hereunder or that holds outstanding US
Tranche B Term Loans.
"US Tranche B Term Loan": as defined in subsection 2.8.
"US Tranche B Term Note": as defined in subsection 2.11(a).
"US Tranche C Maturity Date": December 31, 2003.
"US Tranche C Term Loan Commitment": as to any US Tranche C
Term Loan Lender, its obligation to make a US Tranche C Term Loan to
the Company pursuant to subsection 2.9 in an amount equal to the amount
set forth under such US Tranche C Term Loan Lender's name in Schedule
1.1A opposite the heading "US Tranche C Term Loan Commitment";
collectively, the "US Tranche C Term Loan Commitments".
"US Tranche C Term Loan Commitment Percentage": as to any US
Tranche C Term Loan Lender, the percentage of the aggregate US Tranche
C Term Loan Commitments constituted by its US Tranche C Term Loan
Commitment or, following the Closing Date, the percentage of the
aggregate outstanding US Tranche C Term Loans constituted by its US
Tranche C Term Loan.
<PAGE> 43
38
"US Tranche C Term Loan Lender": any Lender having a US
Tranche C Term Loan Commitment hereunder or that holds outstanding US
Tranche C Term Loans.
"US Tranche C Term Loan": as defined in subsection 2.8.
"US Tranche C Term Note": as defined in subsection 2.12(a).
"Wholly Owned Subsidiary": means any Subsidiary, all of the
outstanding voting securities of which are owned, directly or
indirectly, by the Company.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in any Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Company and its Subsidiaries not defined in subsection 1.1 and accounting
terms partly defined in subsection 1.1, to the extent not defined, shall have
the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 US Revolving Credit Commitments. (a) Subject to the terms
and conditions hereof, each US Revolving Credit Lender severally agrees to make
revolving credit loans ("US Revolving Credit Loans") to the Company from time to
time during the US Revolving Credit Commitment Period in an aggregate principal
amount (the "Maximum Borrowing Amount") at any one time outstanding which, when
added to such US Revolving Credit Lender's US Revolving Credit Commitment
Percentage of the then outstanding US L/C Obligations, does not exceed such
Lender's US Revolving Credit Commitment; provided, however, that (i) prior to
the consummation of the Houston Acquisition, the Maximum Borrowing Amount shall
be reduced by such Lender's US Revolving Credit Commitment
<PAGE> 44
39
Percentage of $10,000,000 and (ii) if the aggregate amount expended by the
Borrower on or prior to the Closing Date for the purchase of the Senior Notes
pursuant to the tender offer referred to in subsection 6.1(k) shall be less than
$115,000,000 as a result of less than 100% of the Senior Notes being tendered
thereunder, the Maximum Borrowing Amount shall be reduced by such Lender's US
Revolving Credit Commitment Percentage of such difference unless and to the
extent that the Company shall borrow under this subsection for the purpose of
purchasing or defeasing such untendered Senior Notes at a cost to the Borrower
per Senior Note not greater than the cost to the Borrower of acquiring the
Senior Notes pursuant to said tender offer. During the US Revolving Credit
Commitment Period the Company may use the US Revolving Credit Commitments by
borrowing, prepaying the US Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.
(b) The US Revolving Credit Loans shall be denominated in US$
and may from time to time be (i) Eurodollar Loans, (ii) ABR Loans or (iii) a
combination thereof, as determined by the Company and notified to the US
Administrative Agent in accordance with subsections 2.3 and 2.7, provided that
no US Revolving Credit Loan shall be made as a Eurodollar Loan after the day
that is one month prior to the US Revolving Credit Commitment Termination Date.
2.2 Canadian Revolving Credit Commitments. (a) Subject to the
terms and conditions hereof, each Canadian Revolving Credit Lender severally
agrees to make revolving credit loans to, and to accept and, at the option of
the Canadian Borrower, purchase Bankers' Acceptances from, the Canadian Borrower
(such loans and acceptances and/or purchases of Bankers' Acceptances, the
"Canadian Revolving Credit Loans") from time to time during the Canadian
Revolving Credit Commitment Period in an aggregate principal amount at any one
time outstanding, when added to such Canadian Revolving Credit Lender's Canadian
Revolving Credit Commitment Percentage of the then outstanding Canadian L/C
Obligations, not to exceed such Canadian Revolving Credit Lender's Canadian
Commitment. During the Commitment Period, the Canadian Borrower may use the
Canadian Commitments by borrowing, prepaying or repaying, in whole or in part,
and reborrowing, the C$ Prime Loans, and by requesting the Canadian Revolving
Credit Lenders to accept or purchase Bankers' Acceptances, all in accordance
with the terms and conditions hereof.
(b) The Canadian Revolving Credit Loans shall be denominated
in C$ and may from time to time be (i) C$ Prime Loans, (ii) Bankers' Acceptances
or (iii) a combination thereof, as determined by the Company and notified to the
Canadian Administrative Agent in accordance with subsections 2.5 and 2.17.
<PAGE> 45
40
2.3 US Revolving Credit Notes. The Company agrees that, upon
the request to the US Administrative Agent by any US Revolving Credit Lender
made on or prior to the Closing Date or in connection with any assignment
pursuant to subsection 11.6, to evidence such Lender's US Revolving Credit Loans
the Company will execute and deliver to such Lender a promissory note
substantially in the form of Exhibit A-1, with appropriate insertions as to
payee, date and principal amount (each, as amended, supplemented, replaced or
otherwise modified from time to time, a "US Revolving Credit Note"), payable to
the order of such Lender and in a principal amount equal to (i) the amount of
the initial US Revolving Credit Commitment of such US Revolving Credit Lender
or, if less, (ii) the aggregate unpaid principal amount of all US Revolving
Credit Loans made by such US Revolving Credit Lender. Each US Revolving Credit
Lender is hereby authorized to record the date, Type and amount of each US
Revolving Credit Loan made by such US Revolving Credit Lender, each continuation
thereof, each conversion of all or a portion thereof to another Type, the date
and amount of each payment or prepayment of principal thereof and, in the case
of Eurodollar Loans, the length of each Interest Period with respect thereto, on
the schedule annexed to and constituting a part of its US Revolving Credit Note,
and any such recordation shall constitute prima facie evidence of the accuracy
of the information so recorded; provided, however, that the failure to make any
such recordation shall not affect the obligations of the Company hereunder or
under any US Revolving Credit Note. Each US Revolving Credit Note shall (x) be
dated the Closing Date, (y) be stated to mature on the US Revolving Credit
Commitment Termination Date and (z) provide for the payment of interest in
accordance with subsection 4.1.
2.4 Procedure for US Revolving Credit Borrowing. The Company
may borrow under the US Revolving Credit Commitments during the US Revolving
Credit Commitment Period on any Business Day, provided that the Company shall
give the US Administrative Agent irrevocable notice (which notice must be
received by the US Administrative Agent prior to 10:00 A.M., New York City time,
(a) three Business Days prior to the requested Borrowing Date, if all or any
part of the requested US Revolving Credit Loans are to be initially Eurodollar
Loans, or (b) one Business Day prior to the requested Borrowing Date,
otherwise), specifying (i) the amount to be borrowed, (ii) the requested
Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, ABR
Loans or a combination thereof and (iv) if the borrowing is to be entirely or
partly of Eurodollar Loans, the respective amounts of each such Type of Loan and
the respective lengths of the initial Interest Periods therefor. Each borrowing
under the US Revolving Credit Commitments shall be in an amount equal to (x) in
the case of ABR Loans, $250,000 or a whole multiple of $100,000 in excess
thereof (or, if the then Available US Revolving Credit Commitments are less than
$250,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$2,500,000 or a whole multiple of $100,000 in excess thereof. Upon receipt of
any such notice from the
<PAGE> 46
41
Company, the US Administrative Agent shall promptly notify each US Revolving
Credit Lender thereof. Each US Revolving Credit Lender will make the amount of
its pro rata share of each borrowing available to the US Administrative Agent
for the account of the Company at the office of the US Administrative Agent
specified in subsection 11.2 prior to 11:00 A.M., New York City time, on the
Borrowing Date requested by the Company in funds immediately available to the US
Administrative Agent. Such borrowing will then be made available to the Company
by the US Administrative Agent crediting the account of the Company on the books
of such office with the aggregate of the amounts made available to the US
Administrative Agent by the US Revolving Credit Lenders and in like funds as
received by the US Administrative Agent.
2.5 Procedure for C$ Prime Loan Revolving Credit Borrowing.
The Canadian Borrower may borrow C$ Prime Loans during the Canadian Revolving
Credit Commitment Period on any Business Day, provided that the Canadian
Borrower shall give the Canadian Administrative Agent irrevocable notice (which
notice must be received by the Canadian Administrative Agent prior to 10:00
A.M., Toronto Time, one Business Day prior to the requested Borrowing Date),
specifying (a) the amount to be borrowed and (b) the requested Borrowing Date.
Each borrowing of C$ Prime Loans shall be in an amount equal to C$4,000,000, or
a whole multiple of C$100,000 in excess thereof (or, if the then Available
Canadian Revolving Credit Commitments are less than C$4,000,000, such lesser
amount). Upon receipt of any such irrevocable notice from the Canadian Borrower,
the Canadian Administrative Agent shall promptly notify each Canadian Revolving
Credit Lender thereof. Each Canadian Revolving Credit Lender will make the
amount of its pro rata share of each such borrowing available to the Canadian
Administrative Agent for the account of the Canadian Borrower at the Canadian
Administrative Office prior to 11:00 A.M., Toronto Time, on the Borrowing Date
requested by the Canadian Borrower in funds immediately available to the
Canadian Administrative Agent. Such borrowing will then be made available, on
such Borrowing Date to the Canadian Borrower by the Canadian Administrative
Agent crediting the account of the Canadian Borrower on the books of the
Canadian Administrative Office with the aggregate of the amounts made available
to the Canadian Administrative Agent by the C$ Lenders and in like funds as
received by the Canadian Administrative Agent. The Canadian Borrower may make
Bankers' Acceptance borrowings during the Canadian Commitment Period on any
Business Day, in accordance with and pursuant to the procedures set forth in
subsection 2.17.
2.6 Fees. (a) The Company agrees to pay to the US
Administrative Agent for the account of each US Revolving Credit Lender a
commitment fee for the period from and including the first day of the US
Revolving Credit Commitment Period to the US Revolving Credit Commitment
Termination Date, computed at the rate of 1/2 of 1% per annum on the
<PAGE> 47
42
average daily amount of the Available US Revolving Credit Commitment of such
Lender during the period for which payment is made, payable quarterly in arrears
on the last day of each March, June, September and December and on the US
Revolving Credit Commitment Termination Date or such earlier date as the US
Revolving Credit Commitments shall terminate as provided herein, commencing on
the first of such dates to occur after the Closing Date.
(b) The Canadian Borrower agrees to pay to the Canadian
Administrative Agent for the account of each Canadian Revolving Credit Lender a
commitment fee for the period from and including the first day of the Canadian
Revolving Credit Commitment Period to the Canadian Revolving Credit Commitment
Termination Date, computed at the rate of 1/2 of 1% per annum on the average
daily amount of the Available Canadian Revolving Credit Commitment of such
Lender during the period for which payment is made, payable quarterly in arrears
on the first business day in Toronto following the last day of each March, June,
September and December (for the quarter ending on such last day) and on the
Canadian Revolving Credit Commitment Termination Date or such earlier date as
the Canadian Revolving Credit Commitments shall terminate as provided herein
(for the period since the end of the last period for which payment shall have
been made), commencing on the first of such dates to occur after the Closing
Date.
(c) The Company agrees to pay to the US Administrative Agent
the fees set forth in the letter agreement, dated July 9, 1996, between the US
Administrative Agent and the Company.
2.7 Termination or Reduction of Revolving Credit Commitments.
(a) The Company shall have the right, upon not less than five Business Days'
notice to the US Administrative Agent, to terminate the US Revolving Credit
Commitments or, from time to time, to reduce the amount of the US Revolving
Credit Commitments, and the Canadian Borrower shall have the right, upon not
less than five Business Days' notice to the Canadian Administrative Agent, to
terminate the Canadian Revolving Credit Commitments or, from time to time, to
reduce the amount of the Canadian Revolving Credit Commitments; provided that no
such termination or reduction shall be permitted if, after giving effect thereto
and to any prepayments of the Revolving Credit Loans made on the effective date
thereof, (i) the aggregate principal amount of the US Revolving Credit Loans
then outstanding, when added to the then outstanding US L/C Obligations, would
exceed the US Revolving Credit Commitments then in effect or (ii) the aggregate
principal amount of the Canadian Revolving Credit Loans then outstanding, when
added to the then outstanding Canadian L/C Obligations, would exceed the
Canadian Revolving Credit Commitments then in effect. Any such reduction shall
be in an amount equal to $2,500,000 or a whole multiple of $100,000 in excess
thereof,
<PAGE> 48
43
in the case of the US Revolving Credit Commitments, or C$2,500,000 or a whole
multiple of C$100,000 in excess thereof, in the case of the Canadian Revolving
Credit Commitments, and shall reduce permanently the US Revolving Credit
Commitments or the Canadian Revolving Credit Commitments, as the case may be,
then in effect.
(b) The US Revolving Credit Commitments shall automatically be
permanently reduced on December 31 of each year, commencing on December 31,
1998, by the aggregate amount of US Revolving Credit Commitments set forth below
opposite each such date:
<TABLE>
<S> <C>
December 31, 1998 $ 7,000,000
December 31, 1999 $ 8,000,000
December 31, 2000 $ 8,000,000
December 31, 2001 $27,000,000
</TABLE>
Each such reduction shall be accompanied by prepayment of the US Revolving
Credit Loans (together with fees and interest accrued thereon to the date of
such prepayment and any additional amounts owing under subsection 4.12) to the
extent, if any, that the US Revolving Credit Loans then outstanding, when added
to the US L/C Obligations then outstanding, exceed the amount of the US
Revolving Credit Commitments as so reduced. If, after giving effect to such
prepayment of the US Revolving Credit Loans, the US L/C Obligations then
outstanding exceed the US Revolving Credit Commitments as so reduced, the
Company shall deposit in a cash collateral account with the US Administrative
Agent an amount equal to the amount by which the US L/C Obligations then
outstanding exceed the US Revolving Credit Commitments as so reduced.
(c) The Canadian Revolving Credit Commitments shall
automatically be permanently reduced on December 31 of each year, commencing on
December 31, 1998, by the aggregate amount of Canadian Revolving Credit
Commitments set forth below opposite each such date:
<TABLE>
<S> <C>
December 31, 1998 C$ 5,000,000
December 31, 1999 C$ 5,000,000
December 31, 2000 C$ 5,000,000
December 31, 2001 C$20,000,000
</TABLE>
Each such reduction shall be accompanied by prepayment of the Canadian Revolving
Credit Loans that are C$ Prime Loans (together with fees and interest accrued
thereon to the date of such prepayment and any additional amounts owing under
subsection 4.12) or, in the case of Canadian Revolving Credit Loans that are
Bankers' Acceptances, cash collateralization of such
<PAGE> 49
44
Bankers' Acceptances as set forth below to the extent, if any, that the Canadian
Revolving Credit Loans then outstanding, when added to the Canadian L/C
Obligations then outstanding, exceed the amount of the Canadian Revolving Credit
Commitments as so reduced. If, after giving effect to such prepayment of the
Canadian Revolving Credit Loans that are C$ Prime Loans, the sum of the
aggregate face amount of Canadian Revolving Credit Loans that are Bankers'
Acceptances and the aggregate amount of Canadian L/C Obligations then
outstanding exceed the Canadian Revolving Credit Commitments as so reduced, the
Canadian Borrower shall deposit in a cash collateral account with the Canadian
Administrative Agent an amount equal to the amount by which such sum exceeds the
Canadian Revolving Credit Commitments as so reduced.
2.8 US Term Loans. Subject to the terms and conditions hereof,
(a) each US Tranche A Term Loan Lender severally agrees to make a term loan (a
"US Tranche A Term Loan") to the Company on the Closing Date in the principal
amount set forth under such Lender's name in Schedule 1.1A opposite the heading
"US Tranche A Term Loan Commitment", (b) each US Tranche B Term Loan Lender
severally agrees to make a term loan (a "US Tranche B Term Loan") to the Company
on the Closing Date in the principal amount set forth under such Lender's name
in Schedule 1.1A opposite the heading "US Tranche B Term Loan Commitment", and
(c) each US Tranche C Term Loan Lender severally agrees to make a term loan (a
"US Tranche C Term Loan", and together with the US Tranche A Term Loans and the
US Tranche B Term Loans, the "US Term Loans") to the Company on the Closing Date
in the principal amount set forth under such Lender's name in Schedule 1.1A
opposite the heading "US Tranche C Term Loan Commitment". The US Term Loans
shall be denominated in US$ and may from time to time be (a) Eurodollar Loans,
(b) ABR Loans or (c) a combination thereof, as determined by the Company and
notified to the US Administrative Agent in accordance with subsection 4.4.
2.9 Canadian Term Loans. Subject to the terms and conditions
hereof, (a) each Canadian Tranche A Term Loan Lender severally agrees to make
loans (which shall be C$ Prime Loans) to, and to accept or purchase Bankers'
Acceptances from, the Canadian Borrower (such loans and acceptances and/or
purchases of Bankers' Acceptances, "Canadian Tranche A Term Loan") to the
Canadian Borrower on the Closing Date in the principal amount set forth under
such Lender's name in Schedule 1.1A opposite the heading "Canadian Tranche A
Term Loan Commitment" and (b) each Canadian Tranche C Term Loan Lender severally
agrees to make a term loan (a "Canadian Tranche C Term Loan", and together with
the Canadian Tranche A Term Loans, the "Canadian Term Loans") to the Canadian
Borrower on the Closing Date in the principal amount set forth under such
Lender's name in Schedule 1.1A opposite the heading "Canadian Tranche C Term
Loan Commitment". The Canadian Tranche A Term Loans shall be denominated in C$
and may from time to time be (a) C$
<PAGE> 50
45
Prime Loans, (b) Bankers' Acceptances or (c) a combination thereof, and the
Canadian Tranche C Loans shall be denominated in US$ and may from time to time
be (a) Eurodollar Loans, (b) ABR Loans or (c) a combination thereof, as
determined by the Canadian Borrower and notified to the Canadian Administrative
Agent in accordance with subsection 4.4.
2.10 US Tranche A Term Notes and Repayment. (a) The Company
agrees that, upon the request to the US Administrative Agent by any US Tranche A
Term Loan Lender made on or prior to the Closing Date or in connection with any
assignment pursuant to subsection 11.6, to evidence such Lender's US Tranche A
Term Loan the Company will execute and deliver to such Lender a promissory note
substantially in the form of Exhibit A-2 (each, as amended, supplemented,
replaced or otherwise modified from time to time, a "US Tranche A Term Note"),
with appropriate insertions therein as to payee, date and principal amount,
payable to the order of such US Tranche A Term Loan Lender and in a principal
amount equal to the amount set forth under such US Tranche A Term Loan Lender's
name on Schedule 1.1A opposite the heading "US Tranche A Term Loan Commitment."
Any US Tranche A Term Note shall (i) be dated the Closing Date, (ii) be payable
as provided in subsection 2.10(b) and (iii) provide for the payment of interest
in accordance with subsection 4.1.
(b) The US Tranche A Term Loans shall be payable in
consecutive quarterly installments, payable during each calendar year in four
equal installments on each March 31, June 30, September 30 and December 31 in
the aggregate principal amounts for such year set forth opposite such year
below, commencing on March 31, 1997 (or, if less, the aggregate amount of the US
Tranche A Term Loans then outstanding):
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1997 $19,200,000
1998 $30,000,000
1999 $44,400,000
2000 $26,400,000
</TABLE>
2.11 US Tranche B Term Notes and Repayment. (a) The Company
agrees that, upon the request to the US Administrative Agent by any US Tranche B
Term Loan Lender made on or prior to the Closing Date or in connection with any
assignment pursuant to subsection 11.6, to evidence such Lender's US Tranche B
Term Loan the Company will execute and deliver to such Lender a promissory note
substantially in the form of Exhibit A-3 (each, as amended, supplemented,
replaced or otherwise modified from time to time, a "US Tranche B Term Note"),
with appropriate insertions therein as to payee, date and principal
<PAGE> 51
46
amount, payable to the order of such US Tranche B Term Loan Lender and in a
principal amount equal to the amount set forth under such US Tranche B Term Loan
Lender's name on Schedule 1.1A opposite the heading "US Tranche B Term Loan
Commitment." Any US Tranche B Term Note shall (i) be dated the Closing Date,
(ii) be payable as provided in subsection 2.11(b) and (iii) provide for the
payment of interest in accordance with subsection 4.1.
(b) The US Tranche B Term Loans shall be payable in
consecutive quarterly installments, payable during each calendar year in four
equal installments on each March 31, June 30, September 30 and December 31 in
the aggregate principal amounts for such year set forth opposite such year
below, commencing on March 31, 1997 (or, if less, the aggregate amount of the US
Tranche B Term Loans then outstanding):
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1997 $ 1,500,000
1998 $ 1,500,000
1999 $ 1,500,000
2000 $37,500,000
2001 $75,000,000
2002 $33,000,000
</TABLE>
2.12 US Tranche C Term Notes and Repayment. (a) The Company
agrees that, upon the request to the US Administrative Agent by any US Tranche C
Term Loan Lender made on or prior to the Closing Date or in connection with any
assignment pursuant to subsection 11.6, to evidence such Lender's US Tranche C
Term Loan the Company will execute and deliver to such Lender a promissory note
substantially in the form of Exhibit A-4 (each, as amended, supplemented,
replaced or otherwise modified from time to time, a "US Tranche C Term Note";
and together with the US Tranche C Term Notes and the US Tranche B Term Notes,
the "US Term Notes"), with appropriate insertions therein as to payee, date and
principal amount, payable to the order of such US Tranche C Term Loan Lender and
in a principal amount equal to the amount set forth under such US Tranche C Term
Loan Lender's name on Schedule 1.1A opposite the heading "US Tranche C Term Loan
Commitment." Any US Tranche C Term Note shall (i) be dated the Closing Date,
(ii) be payable as provided in subsection 2.12(b) and (iii) provide for the
payment of interest in accordance with subsection 4.1.
(b) The US Tranche C Term Loans shall be payable in
consecutive quarterly installments, payable during each calendar year in four
equal installments on each March 31,
<PAGE> 52
47
June 30, September 30 and December 31 in the aggregate principal amounts for
such year set forth opposite such year below, commencing on March 31, 1997 (or,
if less, the aggregate amount of the US Tranche C Term Loans then outstanding):
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1997 $ 1,100,000
1998 $ 1,100,000
1999 $ 1,100,000
2000 $ 1,100,000
2001 $ 1,100,000
2002 $44,000,000
2003 $60,500,000
</TABLE>
2.13 Canadian Tranche A Term Repayment. The Canadian Tranche A
Term Loans shall be payable in consecutive quarterly installments, payable
during each calendar year in four equal installments on each March 31, June 30,
September 30 and December 31 in the aggregate principal amounts for such year
set forth opposite such year below, commencing on March 31, 1997 (or, if less,
the aggregate amount of the Canadian Tranche A Term Loans then outstanding):
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1997 C$ 7,750,000
1998 C$12,000,000
1999 C$14,250,000
2000 C$14,000,000
</TABLE>
2.14 Canadian Tranche C Term Notes. (a) The Canadian Borrower
agrees that, upon the request to the Canadian Administrative Agent by any
Canadian Tranche C Term Loan Lender made on or prior to the Closing Date or in
connection with any assignment pursuant to subsection 11.6, to evidence such
Lender's Canadian Tranche C Term Loan the Canadian Borrower will execute and
deliver to such Lender a promissory note substantially in the form of Exhibit
A-5 (each, as amended, supplemented, replaced or otherwise modified from time to
time, a "Canadian Tranche C Term Note"), with appropriate insertions therein as
to payee, date and principal amount, payable to the order of such Canadian
Tranche C Term Loan Lender and in a principal amount equal to the amount set
forth under such Canadian Tranche C Term Loan Lender's name on Schedule 1.1A
opposite the heading "Canadian
<PAGE> 53
48
Tranche C Term Loan Commitment." Any Canadian Tranche C Term Note shall (i) be
dated the Closing Date, (ii) be payable as provided in subsection 2.14(b) and
(iii) provide for the payment of interest in accordance with subsection 4.1.
(b) The Canadian Tranche C Term Loans shall be payable in
consecutive quarterly installments, payable during each calendar year in four
equal installments on each March 31, June 30, September 30 and December 31 in
the aggregate principal amounts for such year set forth opposite such year
below, commencing on March 31, 1997 (or, if less, the aggregate amount of the
Canadian Tranche C Term Loans then outstanding):
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1997 $ 400,000
1998 $ 400,000
1999 $ 400,000
2000 $ 400,000
2001 $ 400,000
2002 $16,000,000
2003 $22,000,000
</TABLE>
2.15 Procedure for Term Loan Borrowing. The Company shall give
the US Administrative Agent, and the Canadian Borrower shall give the Canadian
Administrative Agent, irrevocable notice (which notices must be received by the
applicable Administrative Agents prior to 10:00 A.M., New York City time, (a)
three Business Days prior to the Closing Date, if all or any part of the Term
Loans are to be initially Eurodollar Loans or Bankers' Acceptances or (b) one
Business Day prior to the Closing Date, otherwise) requesting that the Term Loan
Lenders make the Term Loans on the Closing Date and specifying (i) whether the
Term Loans are to be initially Eurodollar Loans, ABR Loans, C$ Prime Loans,
Bankers' Acceptances or a combination thereof, as applicable, and (ii) if the
Term Loans are to be entirely or partly Eurodollar Loans the amount of such Type
of Loan and the length of the initial Interest Periods therefor. Upon receipt of
such notice the Administrative Agent shall promptly notify each Term Loan Lender
thereof. The procedure for Canadian Tranche A Term Loans that are to be Bankers'
Acceptances shall be in accordance with the provisions of 2.17. On the Closing
Date (i) each US Term Loan Lender shall make available to the US Administrative
Agent at its office specified in subsection 11.2 the amount in immediately
available funds equal to the US Term Loan to be made by such US Term Loan
Lender, (ii) each Canadian Tranche A Term Loan Lender shall make available to
the Canadian Administrative Agent at its office specified in subsection 11.2 the
amount in immediately available funds equal to the Canadian Tranche A Term Loan
that is a C$ Prime
<PAGE> 54
49
Loan to be made by such Canadian Tranche A Term Loan Lender and (iii) each
Canadian Tranche C Term Loan Lender shall make available to the Canadian
Administration Agent at its office specified in subsection 11.2 the amount in
immediately available funds equal to the Canadian Tranche C Term Loan to be made
by such Canadian Tranche C Term Loan Lender. The US Administrative Agent shall
on such date credit the account of the Company on the books of such office of
the US Administrative Agent with the aggregate of the amounts made available
hereunder to the Administrative Agent by the US Term Loan Lenders, and the
Canadian Administrative Agent shall on such date credit the account of the
Canadian Borrower on the books of such office of the Canadian Administrative
Agent with the aggregate of such amounts made available to the Administrative
Agent by the Canadian Term Loan Lenders.
2.16 Repayment of Loans. (a) Each Borrower (as specified in
the succeeding sentence) hereby unconditionally and severally promises to pay to
the applicable Administrative Agent for the account of: (i) in the case of each
Borrower, each Revolving Credit Lender, the then unpaid principal amount of each
Revolving Credit Loan of such Lender made to such Borrower, on the US Revolving
Credit Commitment Termination Date, in the case of US Revolving Credit Loans,
and on the Canadian Revolving Credit Commitment Termination Date, in the case of
Canadian Revolving Credit Loans (or, in each case, such earlier date on which
the Revolving Credit Loans become due and payable pursuant to Section 9); (ii)
each US Tranche A Term Loan Lender, the amounts specified in subsection 2.10(b)
on the dates specified in subsection 2.10(b) (or such earlier date on which the
US Tranche A Term Loans become due and payable pursuant to Section 9); (iii)
each US Tranche B Term Loan Lender, the amounts specified in subsection 2.11(b)
on the dates specified in subsection 2.11(b) (or such earlier date on which the
US Tranche B Term Loans become due and payable pursuant to Section 9); (iv) each
US Tranche C Term Loan Lender, the amounts specified in subsection 2.12(b) on
the dates specified in subsection 2.12(b) (or such earlier date on which the US
Tranche C Term Loans become due and payable pursuant to Section 9); (v) each
Canadian Tranche A Term Loan Lender, the amounts specified in subsection 2.13 on
the dates specified in subsection 2.13 (or such earlier date on which the
Canadian Tranche A Term Loans become due and payable pursuant to Section 9); and
(vi) each Canadian Tranche C Term Loan Lender, the amounts specified in
subsection 2.14(b) on the dates specified in subsection 2.14(b) (or such earlier
date on which the Canadian Tranche C Term Loans become due and payable pursuant
to Section 9). The amounts described in clause (i) of the preceding sentence
shall be payable by the applicable Borrower; the amounts described in clauses
(ii) through (iv) of the preceding sentence shall be payable by the Company; and
the amounts described in clauses (v) and (vi) of the preceding sentence shall be
payable by the Canadian Borrower. Each Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Loans made to it from time to
time outstanding from the Closing Date until payment in full thereof at the
rates per annum, and on the dates, set forth in subsection 4.1.
<PAGE> 55
50
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of each Borrower to such
Lender resulting from each Loan of such Lender from time to time, including,
without limitation, the amounts of principal and interest payable and paid to
such Lender from time to time under this Agreement.
(c) The US Administrative Agent shall maintain the Register
pursuant to subsection 11.6(d), and a subaccount therein for each US$ Lender, in
which shall be recorded (i) the amount of each US Loan made hereunder, the Type
thereof and each Interest Period, if any, applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Company to each US$ Lender hereunder and (iii) both the amount of any sum
received by the US Administrative Agent hereunder from the Company and each US$
Lender's share thereof.
(d) The Canadian Administrative Agent shall maintain the
Register pursuant to subsection 11.6(d), and a subaccount therein for each C$
Lender, in which shall be recorded (i) the amount of each C$ Loan made hereunder
and whether such C$ Loan is, as applicable, a C$ Prime Loan or a Bankers'
Acceptance, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Canadian Borrower to each C$ Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each C$ Lender's share thereof.
(e) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 2.16(c) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of each Borrower therein recorded; provided, however, that the
failure of any Lender or either Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of either Borrower to repay (with applicable interest) the Loans made
to such Borrower by such Lender in accordance with the terms of this Agreement.
2.17 Bankers' Acceptances. (a) The Canadian Borrower may issue
Bankers' Acceptances denominated in C$, for acceptance and, at the Canadian
Borrower's option, purchase by the C$ Lenders, each in accordance with the
provisions of this subsection 2.17.
<PAGE> 56
51
(b) Procedures.
(1) Notice. The Canadian Borrower shall notify the Canadian
Administrative Agent by irrevocable written notice by 10:00 A.M.,
Toronto time, one Business Day prior to the Borrowing Date in respect
of any borrowing by way of Bankers' Acceptances.
(2) Minimum Borrowing Amount. Each borrowing by way of
Bankers' Acceptances shall be in a minimum aggregate face amount of
C$4,000,000 or a whole multiple of C$100,000 in excess thereof.
(3) Face Amounts. The face amount of each Bankers' Acceptance
shall be C$100,000 or any whole multiple thereof.
(4) Term. Bankers' Acceptances shall be issued and shall
mature on a Business Day. Each Bankers' Acceptance shall have a term of
30, 60, 90 or 180 days (or such shorter or longer term as shall be
agreed to by all of the C$ Lenders), shall mature on or before the
Canadian Revolving Credit Termination Date and shall be in form and
substance reasonably satisfactory to each C$ Lender.
(5) Bankers' Acceptances in Blank. To facilitate the
acceptance of Bankers' Acceptances under this Agreement, the Canadian
Borrower shall, from time to time as required, provide to each C$
Lender Drafts in form satisfactory to the C$ Lenders, duly executed and
endorsed in blank by the Canadian Borrower in quantities sufficient for
each C$ Lender to fulfill its obligations hereunder. Each C$ Lender is
hereby authorized to accept such Drafts endorsed in blank in such face
amounts as may be determined by such C$ Lender in accordance with the
provisions of this Agreement, provided that the aggregate amount
thereof is equal to the aggregate amount of Bankers' Acceptances
required to be accepted by such C$ Lender. No C$ Lender shall be
responsible or liable for its failure to accept a Bankers' Acceptance
if the cause of such failure is, in whole or in part, due to the
failure of the Canadian Borrower to provide duly executed and endorsed
Drafts to the Canadian Administrative Agent on a timely basis, nor
shall any C$ Lender be liable for any damage, loss or other claim
arising by reason of any loss or improper use of any such instrument
except loss or improper use arising by reason of the gross negligence
or willful misconduct of such C$ Lender, its officers, employees,
agents or representatives. Each C$ 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 C$ Lender
will, upon the request of the Canadian Borrower, promptly advise the
Canadian Borrower of the
<PAGE> 57
52
number and designation, if any, of Drafts then held by it for the
Canadian Borrower. Each C$ Lender shall maintain a record with respect
to Drafts and Bankers' Acceptances (i) received by it from the Canadian
Borrower in blank hereunder, (ii) voided by it for any reason, (iii)
accepted by it hereunder, (iv) purchased by it hereunder and (v)
cancelled at their respective maturities. Each C$ Lender further agrees
to retain such records in the manner and for the statutory periods
provided in the various Canadian provincial or federal statutes and
regulations which apply to such C$ Lender.
(6) Execution of Bankers' Acceptances. Drafts of the Canadian
Borrower to be accepted as Bankers' Acceptances hereunder shall be duly
executed on behalf of the Canadian Borrower. Notwithstanding that any
person whose signature appears on any Bankers' Acceptance as a
signatory for the Canadian Borrower may no longer be an authorized
signatory for the Canadian Borrower at the date of issuance of a
Bankers' Acceptance, such signature shall nevertheless be valid and
sufficient for all purposes as if such authority had remained in force
at the time of such issuance, and any such Bankers' Acceptance so
signed shall be binding on the Canadian Borrower.
(7) Issuance of Bankers' Acceptances. Promptly following
receipt of a notice of borrowing by way of Bankers' Acceptances, the
Canadian Administrative Agent shall so advise the C$ Lenders and shall
advise each C$ Lender of the face amount of each Draft to be accepted
by it and the term thereof. The aggregate face amount of Draft to be
accepted by a C$ Lender shall be determined by the Canadian
Administrative Agent on a pro rata basis by reference to the respective
Canadian Revolving Credit Commitments or, in the case of the initial
borrowing of Canadian Tranche A Term Loans, the Canadian Tranche A Term
Loan Commitments, of the C$ Lenders, except that, if the face amount of
a Bankers' Acceptance, which would otherwise be accepted by a C$
Lender, would not be C$100,000 or a whole multiple thereof, such face
amount shall be increased or reduced by the Canadian Administrative
Agent in its sole and unfettered discretion to the nearest whole
multiple of C$100,000.
(8) Acceptance of Bankers' Acceptances. Each Draft to be
accepted by a C$ Lender shall be accepted at such C$ Lender's Canadian
Lending Office.
(9) Purchase of Bankers' Acceptances. Each C$ Lender shall be
required to purchase (subject to the commercial availability of a
resale market in the case of Bankers' Acceptances with a term of
approximately 30, 60, 90 or 180 days, as the case may be) from the
Canadian Borrower on such Borrowing Date, at the Applicable BA Discount
Rate, the Bankers' Acceptances accepted by it on such Borrowing Date
and to
<PAGE> 58
53
provide to the Canadian Administrative Agent the BA Discount Proceeds
thereof not later than 12:00 Noon, Toronto time, on such Borrowing Date
for the account of the Canadian Borrower. The Acceptance Fee payable by
the Canadian Borrower to such C$ Lender under subsection 2.17(e) in
respect of each Bankers' Acceptance accepted and purchased by such C$
Lender from the Canadian Borrower shall be set off against the BA
Discount Proceeds payable by such C$ Lender under this subsection
2.17(b)(9). Not later than 2:00 P.M., Toronto time, on such Borrowing
Date the Canadian Administrative Agent shall make such BA Discount
Proceeds available to the Canadian Borrower by crediting the account of
the Canadian Borrower on the books of the Canadian Administrative
Office with the aggregate of the amounts made available to the Canadian
Administrative Agent by the C$ Lenders and in like funds as received by
the Canadian Administrative Agent.
(10) Sale of Bankers' Acceptances. Each C$ Lender may at any
time and from time to time hold, sell, rediscount or otherwise dispose
of any or all Bankers' Acceptances accepted and purchased by it.
(11) Waiver of Presentment and Other Conditions. To the extent
permitted by applicable law, the Canadian Borrower waives presentment
for payment and any other defense to payment of any amounts due to a C$
Lender in respect of a Bankers' Acceptance accepted by it pursuant to
this Agreement which might exist solely by reason of such Bankers'
Acceptance being held, at the maturity thereof, by such C$ Lender in
its own right, and the Canadian Borrower agrees not to claim any days
of grace if such C$ Lender as holder sues the Canadian Borrower on the
Bankers' Acceptances for payment of the amount payable by the Canadian
Borrower thereunder.
(c) The Canadian Borrower shall reimburse the C$ Lender for,
and there shall become due and payable at 10:00 a.m., Toronto time, on the
maturity date for each Bankers' Acceptance, an amount in Canadian Dollars in
same day funds equal to the face amount of such Bankers' Acceptance. The
Canadian Borrower shall make each such reimbursement payment (i) by causing any
proceeds of Refunding Bankers' Acceptances issued in accordance with subsection
2.17(d) or conversion of such Bankers' Acceptance effected in accordance with
subsection 4.4(c) to be applied in reduction of such reimbursement payment; and
(ii) by depositing the amount of such reimbursement payment (or any portion
thereof remaining unpaid after any application referred to in clause (i)) to the
relevant payment account. The Canadian Borrower's payment in accordance with
this subsection shall satisfy its obligations under any Bankers' Acceptance to
which it relates, and the C$ Lender which has accepted such Bankers' Acceptance
shall thereafter be solely responsible for the payment of such Bankers'
Acceptance.
<PAGE> 59
54
(d) The Canadian Borrower shall give irrevocable written
notice (or such other method of notification as may be agreed upon between the
Canadian Administrative Agent and the Canadian Borrower) to the Canadian
Administrative Agent at or before 10:00 A.M., Toronto time, one Business Day
prior to the maturity date of each Bankers' Acceptance followed by written
confirmation electronically transmitted to the Canadian Administrative Agent on
the same day, of the Canadian Borrower's intention to issue a Bankers'
Acceptance on such maturity date (a "Refunding Bankers' Acceptance") to provide
for the payment of such maturing Bankers' Acceptance (it being understood that
payments by the Canadian Borrower and fundings by the C$ Lenders in respect of
each maturing Bankers' Acceptance and the related Refunding Bankers' Acceptance
shall be made on a net basis reflecting the difference between the face amount
of such maturing Bankers' Acceptance and the BA Discount Proceeds (net of the
applicable Acceptance Fee) of such Refunding Bankers' Acceptance). If the
Canadian Borrower fails to give such notice or does not deposit the amount of
reimbursement payment in accordance with subsection 2.17(c)(ii), the Canadian
Borrower shall be deemed to have requested that such maturing Bankers'
Acceptances be repaid with the proceeds of C$ Prime Loans (without any
requirement to give notice with respect thereto), commencing on the maturity
date of such maturing Bankers' Acceptances.
(e) An Acceptance Fee shall be payable by the Canadian
Borrower to each C$ Lender in advance (in the manner specified in subsection
2.17(b)(9)) upon the issuance of a Bankers' Acceptance to be accepted by such C$
Lender calculated at the rate per annum equal to the Applicable Margin, such
Acceptance Fee to be calculated on the face amount of such Bankers' Acceptance
and to be computed on the basis of the number of days in the term of such
Bankers' Acceptance.
(f) Upon the occurrence of any Event of Default which is
continuing, and in addition to any other rights or remedies of any C$ Lender and
the Canadian Administrative Agent hereunder, any C$ Lender or the Canadian
Administrative Agent (or such alternate arrangement as may be agreed upon by the
Canadian Borrower and such C$ Lender or the Canadian Administrative Agent, as
applicable) shall be entitled to deposit and retain in an account to be
maintained by the Canadian Administrative Agent (bearing interest at the
Canadian Administrative Agent's rates as may be applicable in respect of other
deposits of similar amounts for similar terms), for the ratable benefit of the
C$ Lenders, amounts which are received by such C$ Lender or the Canadian
Administrative Agent from the Canadian Borrower hereunder or as proceeds of the
exercise of any rights or remedies of any C$ Lender or the Canadian
Administrative Agent hereunder against the Canadian Borrower, to the extent such
amounts may be required to satisfy any contingent or unmatured obligations or
liabilities of the Canadian Borrower to the C$ Lenders or the Canadian
Administrative Agent, or any of them hereunder.
<PAGE> 60
55
2.18 Circumstances Making Bankers' Acceptances Unavailable.
(a) If the Canadian Administrative Agent determines in good faith, which
determination shall be final, conclusive and binding upon the Canadian Borrower
absent manifest error, and notifies the Canadian Borrower that, by reason of
circumstances affecting the money market, there is no market for Bankers'
Acceptances, then
(i) the right of the Canadian Borrower to request a borrowing
by way of Bankers' Acceptance shall be suspended until the Canadian
Administrative Agent determines that the circumstances causing such
suspension no longer exist and the Canadian Administrative Agent so
notifies the Canadian Borrower; and
(ii) any notice relating to a borrowing by way of Bankers'
Acceptance which is outstanding at such time shall be deemed to be a
notice requesting a borrowing by way of C$ Prime Loan (all as if it
were a notice given pursuant to subsection 2.5).
(b) The Canadian Administrative Agent shall promptly notify
the Canadian Borrower and the C$ Lenders of the suspension of the Canadian
Borrower's right to request a borrowing by way of Bankers' Acceptance and of the
termination of such suspension.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitments. (a) Subject to the terms and conditions
hereof, the US Issuing Lender, in reliance on the agreements of the other US$
Lenders set forth in subsection 3.4(a), agrees to issue letters of credit ("US
Letters of Credit") for the account of the Company on any Business Day during
the US Revolving Credit Commitment Period in such form as may be approved from
time to time by the US Issuing Lender; provided that the US Issuing Lender shall
have no obligation to issue any US Letter of Credit if, after giving effect to
such issuance, (i) the US L/C Obligations would exceed the US L/C Commitment or
(ii) the Available US Revolving Credit Commitment would be less than zero. On
the Closing Date all letters of credit then outstanding on such date under the
Existing Credit Agreement shall automatically be deemed to be US Letters of
Credit.
(b) Subject to the terms and conditions hereof, the Canadian
Issuing Lender, in reliance on the agreements of the other C$ Lenders set forth
in subsection 3.4(b), agrees to issue letters of credit ("Canadian Letters of
Credit"; together with the US Letters of Credit, the "Letters of Credit") for
the account of the Canadian Borrower on any Business Day during the Canadian
Revolving Credit Commitment Period in such form as may be approved from time to
time by the Canadian Issuing Lender; provided that the Canadian Issuing Lender
shall
<PAGE> 61
56
have no obligation to issue any Canadian Letter of Credit if, after giving
effect to such issuance, (i) the Canadian L/C Obligations would exceed the
Canadian L/C Commitment or (ii) the Available Canadian Revolving Credit
Commitment would be less than zero.
(c) Each Letter of Credit shall (i) in the case of the
Company, be denominated in US Dollars and shall be a stand-by letter of credit
issued to finance the working capital and business needs of the Company and its
Subsidiaries (if any) in the ordinary course of business, and, in the case of
the Canadian Borrower, be denominated in C$ and shall be a stand-by letter of
credit issued to finance the working capital and business needs of the Canadian
Borrower and its Subsidiaries in the ordinary course of business and (ii) expire
no later than the earlier of (x) the one year anniversary of its issuance and
(y) the US Revolving Credit Commitment Termination Date, in the case of US
Letters of Credit, or the Canadian Revolving Credit Commitment Termination Date,
in the case of Canadian Letters of Credit; provided that so long as no Event of
Default has occurred and is continuing, any Letter of Credit that expires prior
to the US Revolving Credit Commitment Termination Date or the Canadian Revolving
Credit Commitment Termination Date, as applicable, may be renewed at the request
of the applicable Borrower for a term of up to one year (or, if shorter, for a
term expiring on the US Revolving Credit Commitment Termination Date, in the
case of US Letters of Credit, or the Canadian Revolving Credit Commitment
Termination Date, in the case of Canadian Letters of Credit).
(d) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York, in the case of US Letters of Credit, and the laws of the Province of
Ontario and the laws of Canada applicable thereto, in the case of Canadian
Letters of Credit.
(e) Neither Issuing Lender shall at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause such Issuing Lender or any L/C Participant to exceed any limits imposed
by, any applicable Requirement of Law.
3.2 Procedure for Issuance of Letters of Credit. (a) The
Company may from time to time request that the US Issuing Lender issue a US
Letter of Credit by delivering to the US Issuing Lender at its address for
notices specified herein an Application therefor, completed to the reasonable
satisfaction of the US Issuing Lender, and such other certificates, documents
and other papers and information as the US Issuing Lender may reasonably
request. Upon receipt of any Application, the US Issuing Lender will process
such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the US Letter of Credit requested
thereby (but in no event shall the US Issuing Lender be required to issue
<PAGE> 62
57
any US Letter of Credit earlier than three Business Days after its receipt of
the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such US
Letter of Credit to the beneficiary thereof or as otherwise may be agreed by the
US Issuing Lender and the Company. The US Issuing Lender shall furnish a copy of
such US Letter of Credit to the Company promptly following the issuance thereof.
(b) The Canadian Borrower may from time to time request that
the Canadian Issuing Lender issue a Canadian Letter of Credit by delivering to
the Canadian Issuing Lender at its address for notices specified herein an
Application therefor, completed to the reasonable satisfaction of the Canadian
Issuing Lender, and such other certificates, documents and other papers and
information as the Canadian Issuing Lender may reasonably request. Upon receipt
of any Application, the Canadian Issuing Lender will process such Application
and the certificates, documents and other papers and information delivered to it
in connection therewith in accordance with its customary procedures and shall
promptly issue the Canadian Letter of Credit requested thereby (but in no event
shall the Canadian Issuing Lender be required to issue any Canadian Letter of
Credit earlier than three Business Days after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Canadian Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by the Canadian
Issuing Lender and the Canadian Borrower. The Canadian Issuing Lender shall
furnish a copy of such Canadian Letter of Credit to the Canadian Borrower
promptly following the issuance thereof.
3.3 Fees, Commissions and Other Charges. (a) The Company shall
pay to the US Administrative Agent, for the account of the US Issuing Lender and
the US L/C Participants, a letter of credit fee with respect to each US Letter
of Credit, computed for the period from and including the date of issuance of
such US Letter of Credit to the expiration date of such US Letter of Credit,
computed at a rate per annum equal to the Applicable Margin then in effect for
Eurodollar Loans that are US Revolving Credit Loans calculated on the basis of
the actual number of days elapsed over a 360-day year, of the aggregate face
amount of US Letters of Credit outstanding, payable in arrears on each L/C Fee
Payment Date and on the US Revolving Credit Commitment Termination Date. Such
fee shall be payable to the US Administrative Agent to be shared ratably among
the US Revolving Credit Lenders in accordance with their respective US Revolving
Credit Commitment Percentages. In addition, the Company shall pay to the US
Issuing Lender, for its own account a fee equal to 0.25% per annum of the
aggregate face amount of outstanding US Letters of Credit, payable quarterly in
arrears on each L/C Fee Payment Date and on the US Revolving Credit Commitment
Termination Date and calculated on the basis of the actual number of days
elapsed over a 360-day year.
<PAGE> 63
58
(b) The Canadian Borrower shall pay to the Canadian
Administrative Agent, for the account of the Canadian Issuing Lender and the
Canadian L/C Participants, a letter of credit fee with respect to each Canadian
Letter of Credit, computed for the period from and including the date of
issuance of such Canadian Letter of Credit to the expiration date of such
Canadian Letter of Credit, computed at a rate per annum equal to the Applicable
Margin then in effect for Bankers' Acceptances that are Canadian Revolving
Credit Loans calculated on the basis of the actual number of days elapsed over a
365-day year, of the aggregate face amount of Canadian Letters of Credit
outstanding, payable annually in advance on the date of issuance of each
Canadian Letter of Credit and on each anniversary thereof to occur thereafter on
which a Canadian Letter of Credit shall remain outstanding. Such fee shall be
payable to the Canadian Administrative Agent to be shared ratably among the
Canadian Revolving Credit Lenders in accordance with their respective Canadian
Revolving Credit Commitment Percentages. In addition, the Canadian Borrower
shall pay to the Canadian Issuing Lender, for its own account, a fee equal to
0.25% per annum of the aggregate face amount of outstanding Canadian Letters of
Credit, payable quarterly in advance on the date of issuance of each Canadian
Letter of Credit and on each L/C Fee Payment Date to occur thereafter on which a
Canadian Letter of Credit shall remain outstanding and calculated on the basis
of the actual number of days elapsed over a 365-day year.
(c) In addition to the foregoing fees and commissions, each
Borrower shall pay or reimburse the US Issuing Lender, in the case of the
Company, and the Canadian Issuing Lender, in the case of the Canadian Borrower,
for such normal and customary costs and expenses as are incurred or charged by
such Issuing Lender in issuing, effecting payment under, amending or otherwise
administering any Letter of Credit.
(d) Each Administrative Agent shall, promptly following its
receipt thereof, distribute to the applicable Issuing Lender and the applicable
L/C Participants all fees and commissions received by such Administrative Agent
for their respective accounts pursuant to this subsection.
3.4 L/C Participations. (a) The US Issuing Lender irrevocably
agrees to grant and hereby grants to each US L/C Participant, and, to induce the
US Issuing Lender to issue US Letters of Credit hereunder, each US L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the US Issuing Lender, on the terms and conditions hereinafter
stated, for such US L/C Participant's own account and risk an undivided interest
equal to such US L/C Participant's US Revolving Credit Commitment Percentage in
the US Issuing Lender's obligations and rights under each US Letter of Credit
issued hereunder and the amount of each draft paid by the US Issuing Lender
thereunder. Each US L/C Participant unconditionally and irrevocably agrees with
the US Issuing Lender that, if a
<PAGE> 64
59
draft is paid under any US Letter of Credit for which the US Issuing Lender is
not reimbursed in full by the Company in accordance with the terms of this
Agreement, such US L/C Participant shall pay to the US Issuing Lender upon
demand at the US Issuing Lender's address for notices specified herein an amount
equal to such US L/C Participant's US Revolving Credit Commitment Percentage of
the amount of such draft, or any part thereof, which is not so reimbursed;
provided that, if such demand is made prior to 12:00 Noon, New York City time,
on a Business Day, such US L/C Participant shall make such payment to the US
Issuing Lender prior to the end of such Business Day and otherwise such US L/C
Participant shall make such payment on the next succeeding Business Day.
(b) The Canadian Issuing Lender irrevocably agrees to grant
and hereby grants to each Canadian L/C Participant, and, to induce the Canadian
Issuing Lender to issue Canadian Letters of Credit hereunder, each Canadian L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the Canadian Issuing Lender, on the terms and conditions
hereinafter stated, for such Canadian L/C Participant's own account and risk an
undivided interest equal to such Canadian L/C Participant's Canadian Revolving
Credit Commitment Percentage in the Canadian Issuing Lender's obligations and
rights under each Canadian Letter of Credit issued hereunder and the amount of
each draft paid by the Canadian Issuing Lender thereunder. Each Canadian L/C
Participant unconditionally and irrevocably agrees with the Canadian Issuing
Lender that, if a draft is paid under any Canadian Letter of Credit for which
the Canadian Issuing Lender is not reimbursed in full by the Canadian Borrower
in accordance with the terms of this Agreement, such Canadian L/C Participant
shall pay to the Canadian Issuing Lender upon demand at the Canadian Issuing
Lender's address for notices specified herein an amount equal to such Canadian
L/C Participant's Canadian Revolving Credit Commitment Percentage of the amount
of such draft, or any part thereof, which is not so reimbursed; provided that,
if such demand is made prior to 12:00 Noon, Toronto time, on a Business Day,
such Canadian L/C Participant shall make such payment to the Canadian Issuing
Lender prior to the end of such Business Day and otherwise such Canadian L/C
Participant shall make such payment on the next succeeding Business Day.
(c) If any amount required to be paid by any L/C Participant
to any Issuing Lender pursuant to subsection 3.4(a) or 3.4(b) in respect of any
unreimbursed portion of any payment made by such Issuing Lender under any Letter
of Credit is paid to such Issuing Lender within three Business Days after the
date such payment is due, such L/C Participant shall pay to such Issuing Lender
on demand an amount equal to the product of (i) such amount, times (ii) the
daily average Federal Funds Rate, in the case of US Letters of Credit, and the
then effective CDOR Rate, in the case of Canadian Letters of Credit, as quoted
by such Issuing Lender, during the period from and including the date such
payment is required to the date on which such payment is immediately available
to such Issuing Lender, times (iii)
<PAGE> 65
EXHIBIT B-1
================================================================================
US GUARANTEE AND COLLATERAL AGREEMENT
made by
OUTDOOR SYSTEMS, INC.
and certain of its Subsidiaries
in favor of
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY,
as US Administrative Agent
Dated as of August ___, 1996
================================================================================
<PAGE> 66
FORM OF
US GUARANTEE AND COLLATERAL AGREEMENT
US GUARANTEE AND COLLATERAL AGREEMENT, dated as of August __,
1996, made by each of the signatories hereto (together with any other entity
that may become a party hereto as provided herein, the "Grantors"), in favor of
CANADIAN IMPERIAL BANK OF COMMERCE, New York Agency, as administrative agent (in
such capacity, the "US Administrative Agent") for the banks and other financial
institutions (the "Lenders") from time to time parties to the Third Amended and
Restated Credit Agreement, dated as of August __, 1996 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"), among Outdoor
Systems, Inc., a Delaware corporation (the "Company"), 3284085 Canada Inc., a
Canadian corporation (such corporation, and, upon the consummation thereof, the
corporation resulting from the amalgamation of 3284085 Canada Inc. and Mediacom,
Inc., the "Canadian Borrower"; together with the Company, the "Borrowers"), the
Lenders, the US Administrative Agent and Canadian Imperial Bank of Commerce, as
Canadian Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrowers upon the terms
and subject to the conditions set forth therein;
WHEREAS, each Borrower is a member of an affiliated group of
companies that includes each other Grantor;
WHEREAS, each Borrower and the other Grantors are engaged in
related businesses, and each such Grantor will derive substantial direct and
indirect benefit from the making of the extensions of credit under the Credit
Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrowers under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the US Administrative Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the US Administrative Agent and the Lenders to enter into the Credit Agreement
and to induce the Lenders to make their respective extensions of credit to the
Borrowers thereunder, each Grantor hereby agrees with the US Administrative
Agent, for the ratable benefit of the Lenders, as follows:
<PAGE> 67
2
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement, and the following terms which are defined in the
Uniform Commercial Code in effect in the State of New York on the date hereof
are used herein as so defined: Accounts, Chattel Paper, Documents, Equipment,
Farm Products, Instruments and Inventory.
(b) The following terms shall have the following meanings:
"Agreement": this US Guarantee and Collateral Agreement, as
the same may be amended, supplemented or otherwise modified from time
to time.
"Canadian Borrower Obligations": the collective reference to
the unpaid principal of and interest on the C$ Loans (including
obligations with respect to Bankers' Acceptances purchased and accepted
and outstanding), the Canadian Tranche C Term Loans and the Canadian
L/C Reimbursement Obligations and all other obligations and liabilities
of the Canadian Borrower (including, without limitation, interest
accruing at the then applicable rate provided in the Credit Agreement
after the maturity of the C$ Loans (including obligations with respect
to Bankers' Acceptances purchased and accepted and outstanding), the
Canadian Tranche C Term Loans and the Canadian L/C Reimbursement
Obligations and interest accruing at the then applicable rate provided
in the Credit Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like
proceeding, relating to the Canadian Borrower, whether or not a claim
for post-filing or post-petition interest is allowed in such
proceeding) to either Administrative Agent, any C$ Lender or any US$
Lender with respect to the Canadian Tranche C Term Loans (or, in the
case of any Hedging Agreement referred to below, any Affiliate of any
Lender), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, the Credit Agreement, this
Agreement, the other Loan Documents, any Canadian Letter of Credit or
any Hedging Agreement entered into by the Canadian Borrower with any
Lender (or any Affiliate of any Lender) or any other document made,
delivered or given in connection therewith, in each case whether on
account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise with respect to the foregoing
(including, without limitation, all fees and disbursements of counsel
to either Administrative Agent or to the Lenders that are required to
be paid by the Canadian Borrower pursuant to the terms of any of the
foregoing agreements).
"Code": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Collateral": as defined in Section 3.
<PAGE> 68
3
"Collateral Account": any collateral account established by
the US Administrative Agent as provided in Section 6.1 or 6.4.
"Company Obligations": the collective reference to the unpaid
principal of and interest on the US$ Loans (other than any unpaid
principal of or an interest on any Canadian Tranche C Term Loans) and
US L/C Reimbursement Obligations and all other obligations and
liabilities of the Company (including, without limitation, interest
accruing at the then applicable rate provided in the Credit Agreement
after the maturity of the US$ Loans (other than the Canadian Tranche C
Term Loans) and US L/C Reimbursement Obligations and interest accruing
at the then applicable rate provided in the Credit Agreement after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Company,
whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding) to either Administrative Agent or any US$
Lender (or, in the case of any Hedging Agreement referred to below, any
Affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the
Credit Agreement, this Agreement (including, without limitation,
pursuant to the guarantee by the Company of the Canadian Borrower
Obligations provided for in Section 2 hereof), the other Loan
Documents, any US Letter of Credit or any Hedging Agreement entered
into by the Company with any Lender (or any Affiliate of any Lender) or
any other document made, delivered or given in connection therewith, in
each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all reasonable fees and disbursements
of counsel to either Administrative Agent or to the Lenders that are
required to be paid by the Company pursuant to the terms of any of the
foregoing agreements).
"Contracts": all contracts and agreements to which any Grantor
is a party, as the same may be amended, supplemented or otherwise
modified from time to time, including, without limitation, (i) all
rights of any Grantor to receive moneys due and to become due to it
thereunder or in connection therewith, (ii) all rights of any Grantor
to damages arising thereunder and (iii) all rights of any Grantor to
perform and to exercise all remedies thereunder.
"Copyrights": (i) all copyrights, whether published or
unpublished (including, without limitation, those listed in Schedule
6), all registration and recordings thereof, and all applications in
connection therewith, including, without limitation, all registrations,
recordings and applications in the United States Copyright Office, and
(ii) all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor
as licensor or licensee (including, without limitation, those listed in
Schedule 6), granting any right
<PAGE> 69
4
under any Copyright, including, without limitation, the grant of rights
to manufacture, distribute, exploit and sell materials derived from any
Copyright.
"General Intangibles": all "general intangibles" as such term
is defined in Section 9-106 of the Uniform Commercial Code in effect in
the State of New York on the date hereof and, in any event, shall
include, without limitation, with respect to any Grantor, all
Contracts, agreements, instruments and indentures in any form, and
portions thereof, to which such Grantor is a party or under which such
Grantor has any right, title or interest or to which such Grantor or
any property of such Grantor is subject, as the same may from time to
time be amended, supplemented or otherwise modified, including, without
limitation, (i) all rights of such Grantor to receive moneys due and to
become due to it thereunder or in connection therewith, (ii) all rights
of such Grantor to damages arising thereunder and (iii) all rights of
such Grantor to perform and to exercise all remedies thereunder, in
each case to the extent the grant by such Grantor of a security
interest pursuant to this Agreement in its right, title and interest in
such contract, agreement, instrument or indenture is not prohibited by
such contract, agreement, instrument or indenture without the consent
of any other party thereto, would not give any other party to such
contract, agreement, instrument or indenture the right to terminate its
obligations thereunder, or is permitted with consent if all necessary
consents to such grant of a security interest have been obtained from
the other parties thereto (it being understood that the foregoing shall
not be deemed to obligate such Grantor to obtain such consents);
provided, that the foregoing limitation shall not affect, limit,
restrict or impair the grant by such Grantor of a security interest
pursuant to this Agreement in any Receivable or any money or other
amounts due or to become due under any such Contract, agreement,
instrument or indenture.
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) (x) with respect to the Company, the
Canadian Borrower Obligations and (y) with respect to any other
Guarantor, the Company Obligations and the Canadian Borrower
Obligations and (ii) all obligations and liabilities of such Guarantor
which may arise under or in connection with this Agreement or any other
Loan Document to which such Guarantor is a party, in each case whether
on account of guarantee obligations, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without
limitation, all reasonable fees and disbursements of counsel to either
Administrative Agent or to the Lenders that are required to be paid by
such Guarantor pursuant to the terms of this Agreement or any other
Loan Document).
"Guarantors": the collective reference to each Grantor.
"Hedge Agreements": as to any Person, all interest rate
swaps, caps or collar agreements or similar arrangements entered into
by such Person providing for protection against fluctuations in
interest rates or currency exchange rates or the exchange of nominal
interest obligations, either generally or under specific
<PAGE> 70
5
contingencies.
"Intellectual Property": the collective reference to the
Copyrights, the Copyright Licenses, the Patents, the Patent Licenses,
the Trademarks and the Trademark Licenses.
"Intercompany Note": any promissory note evidencing loans made
by any Grantor to any of its Subsidiaries.
"Issuers": the collective reference to the Persons identified
on Schedule 2 as the issuers of the Pledged Securities.
"Obligations": (i) in the case of the Company, its Guarantor
Obligations and the Company Obligations, and (ii) in the case of each
Guarantor, other than the Company, its Guarantor Obligations.
"Patents": (i) all letters patent of the United States or any
other country, all reissues and extensions thereof and all goodwill
associated therewith, including, without limitation, any of the
foregoing referred to in Schedule 6, and (ii) all applications for
letters patent of the United States or any other country and all
divisions, continuations and continuations-in-part thereof, including,
without limitation, any of the foregoing referred to in Schedule 6.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered by a Patent, including,
without limitation, any of the foregoing referred to in Schedule 6.
"Pledged Notes": all promissory notes listed on Schedule 2,
all Intercompany Notes at any time issued to any Pledgor and all other
promissory notes issued to or held by any Grantor (other than
promissory notes issued in connection with extensions of trade credit
by any Grantor in the ordinary course of business).
"Pledged Securities": the collective reference to the Pledged
Notes and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on
Schedule 2, together with any other shares, stock certificates, options
or rights of any nature whatsoever in respect of the Capital Stock of
any Issuer that may be issued or granted to, or held by, any Grantor
while this Agreement is in effect.
"Pledgor": each Grantor owning Pledged Securities.
<PAGE> 71
6
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New
York on the date hereof and, in any event, shall include, without
limitation, all dividends or other income from the Pledged Securities,
collections thereon or distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or
for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).
"Reimbursement Obligation": the obligations of (i) the Company
to reimburse the US Issuing Lender and (ii) the Canadian Borrower to
reimburse the Canadian Issuing Lender, each pursuant to subsection
3.5(a) of the Credit Agreement for amounts drawn under Letters of
Credit.
"Securities Act": the Securities Act of 1933, as amended.
"Trademarks": (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and all goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any
of the foregoing referred to in Schedule 6, and (ii) all renewals
thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred
to in Schedule 6.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
<PAGE> 72
7
SECTION 2. GUARANTEE
2.1 Guarantee. (a) (i) The Company hereby, unconditionally and
irrevocably, guarantees to the US Administrative Agent and the Canadian
Administrative Agent, for the benefit of the C$ Lenders and the US$ Lenders
(with respect to Canadian Tranche C Term Loans), and their respective
successors, indorsees, transferees and assigns, the prompt and complete payment
and performance by the Canadian Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Canadian Borrower Obligations,
and (ii) each of the Guarantors other than the Company (x) hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the US Administrative
Agent, for the benefit of the US$ Lenders and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Company when due (whether at the stated maturity, by
acceleration or otherwise) of the Company Obligations and (y) hereby, jointly
and severally, unconditionally and irrevocably, guarantees to the US
Administrative Agent and the Canadian Administrative Agent, for the benefit of
the C$ Lenders and the US$ Lenders (with respect to Canadian Tranche C Term
Loans), and their respective successors, indorsees, transferees and assignees,
the prompt and complete payment and performance by the Canadian Borrower when
due (whether at stated maturity, by acceleration or otherwise) of the Canadian
Borrower Obligations.
(b) Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor (other than
the Company) hereunder and under the other Loan Documents shall in no event
exceed the amount which can be guaranteed by such Guarantor under applicable
federal and state laws relating to the insolvency of debtors (after giving
effect to the right of contribution established in Section 2.2).
(c) Each Guarantor agrees that the Company Obligations or the
Canadian Borrower Obligations, as the case may be, may at any time and from time
to time exceed the amount of the liability of such Guarantor hereunder without
impairing the guarantee contained in this Section 2 or affecting the rights and
remedies of the US Administrative Agent or any Lender hereunder.
(d) The guarantee contained in this Section 2 shall remain in
full force and effect until all the Company Obligations, the Canadian Borrower
Obligations and the obligations of each Guarantor under the guarantee contained
in this Section 2 shall have been satisfied by payment in full, no Bankers'
Acceptance shall be outstanding, no Letter of Credit shall be outstanding and
the Commitments shall be terminated, notwithstanding that from time to time
during the term of the Credit Agreement either Borrower may be free from any
Company Obligations or Canadian Borrower Obligations, as the case may be.
(e) No payment made by any Borrower, any of the Guarantors,
any other
<PAGE> 73
8
guarantor or any other Person or received or collected by the US Administrative
Agent or any Lender from any Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Company Obligations or the Canadian Borrower
Obligations, as the case may be, shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such Guarantor
in respect of the Company Obligations or the Canadian Borrower Obligations or
any payment received or collected from such Guarantor in respect of the Company
Obligations or Canadian Borrower Obligations, as the case may be), remain liable
for the Company Obligations and/or the Canadian Borrower Obligations, as the
case may be, up to the maximum liability of such Guarantor hereunder until the
Company Obligations and the Canadian Borrower Obligations are paid in full, no
Bankers' Acceptance shall be outstanding, no Letter of Credit shall be
outstanding and the Commitments are terminated.
2.2 Right of Contribution. Each Guarantor (other than the
Company) hereby agrees that to the extent that a Guarantor (other than the
Company) shall have paid more than its proportionate share of any payment made
hereunder, such Guarantor shall be entitled to seek and receive contribution
from and against any other Guarantor hereunder which has not paid its
proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the US Administrative Agent, the US$ Lenders or C$ Lenders, as
the case may be, and each Guarantor shall remain liable to the US Administrative
Agent and the US$ Lenders or C$ Lenders, as the case may be, for the full amount
guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agents or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agents or any US$ Lender
or C$ Lender, as the case may be, against the Company or the Canadian Borrower,
as the case may be, or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agents or any US$ Lender
or C$ Lender, as the case may be, for the payment of the Company Obligations or
the Canadian Borrower Obligations, as the case may be, nor shall any Guarantor
seek or be entitled to seek any contribution or reimbursement from the relevant
Borrower or any other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Administrative Agents and the US$
Lenders or C$ Lender, as the case may be, by the relevant Borrower on account of
the Company Obligations or the Canadian Borrower Obligations, as the case may
be, are paid in full, no Bankers' Acceptance shall be outstanding, no Letter of
Credit shall be outstanding and the Commitments are terminated. If any amount
shall be paid to any Guarantor on account of such subrogation rights at any time
when all of the Company Obligations or the Canadian Borrower Obligations, as the
case may be, shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the US
<PAGE> 74
9
Administrative Agent and the US$ Lenders or the C$ Lenders, as the case may be,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the US Administrative Agent in the exact
form received by such Guarantor (duly indorsed by such Guarantor to the US
Administrative Agent, if required), to be applied against the Company
Obligations or the Canadian Borrower Obligations, as the case may be, whether
matured or unmatured, in such order as the US Administrative Agent may
determine.
2.4 Amendments, etc. with respect to the Guarantor
Obligations. Each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Guarantor and without notice
to or further assent by any Guarantor, any demand for payment of any of the
Company Obligations or the Canadian Borrower Obligations, as the case may be,
made by the US Administrative Agent or any Lender may be rescinded by the US
Administrative Agent or such Lender and any of the Company Obligations or the
Canadian Borrower Obligations, as the case may be, continued, and the Company
Obligations or the Canadian Borrower Obligations, as the case may be, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the US
Administrative Agent or any Lender, and the Credit Agreement and the other Loan
Documents and any other documents executed and delivered in connection therewith
may be amended, modified, supplemented or terminated, in whole or in part, as
the US Administrative Agent (or the Majority Lenders, as the case may be) may
deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by the US Administrative Agent or any Lender
for the payment of the Company Obligations or the Canadian Borrower Obligations,
as the case may be, may be sold, exchanged, waived, surrendered or released.
Neither the US Administrative Agent nor any Lender shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Company Obligations or the Canadian Borrower Obligations, as the case
may be, or for the guarantee contained in this Section 2 or any property subject
thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Company Obligations or the Canadian Borrower Obligations, as the case may
be, and notice of or proof of reliance by the US Administrative Agent or any
Lender upon the guarantee contained in this Section 2 or acceptance of the
guarantee contained in this Section 2; the Company Obligations or the Canadian
Borrower Obligations, as the case may be, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee contained in this Section 2;
and all dealings between either Borrower and any of the Guarantors, on the one
hand, and the Administrative Agents and the Lenders, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon either Borrower or any of the Guarantors with respect to the Company
<PAGE> 75
10
Obligations or the Canadian Borrower Obligations, as the case may be. Each
Guarantor understands and agrees that the guarantee contained in this Section 2
shall be construed as a continuing, absolute and unconditional guarantee of
payment without regard to (a) the validity or enforceability of the Credit
Agreement or any other Loan Document, any of the Company Obligations or the
Canadian Borrower Obligations, as the case may be, or any other collateral
security therefor or guarantee or right of offset with respect thereto at any
time or from time to time held by the Administrative Agents or any Lender, (b)
any defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by either
Borrower against the Administrative Agents or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of either
Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of either Borrower for the Company
Obligations or the Canadian Borrower Obligations, as the case may be, or of such
Guarantor under the guarantee contained in this Section 2, in bankruptcy or in
any other instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Guarantor, the Administrative Agents
or any Lender may, but shall be under no obligation to, make a similar demand on
or otherwise pursue such rights and remedies as it may have against either
Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Company Obligations or the Canadian Borrower
Obligations, as the case may be, or any right of offset with respect thereto,
and any failure by the Administrative Agents or any Lender to make any such
demand, to pursue such other rights or remedies or to collect any payments from
either Borrower, any other Guarantor or any other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of either Borrower, any other Guarantor or any other Person or
any such collateral security, guarantee or right of offset, shall not relieve
any Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agents or any Lender against any Guarantor.
For the purposes hereof "demand" shall include the commencement and continuance
of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Company Obligations or the
Canadian Borrower Obligations, as the case may be, is rescinded or must
otherwise be restored or returned by the Administrative Agents or any Lender
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
either Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for,
either Borrower or any Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the US Administrative Agent without set-off or
counterclaim in Dollars or C$'s in the case of loans originally denominated in
C$'s at the office of the US Administrative Agent located at 425 Lexington
Avenue, New York, New York 10017.
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SECTION 3. GRANT OF SECURITY INTEREST
3.1 Grant of Security Interest. Each Grantor hereby assigns
and transfers to the US Administrative Agent, and hereby grants to the US
Administrative Agent, for the ratable benefit of the Lenders, a security
interest in, all of the following property now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest (collectively, the
"Collateral"), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of such Grantor's Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Pledged Securities;
(k) all books and records pertaining to the Collateral; and
(l) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing.
3.2 Acknowledgment. Each Grantor, the US Administrative Agent
and the Lenders hereby acknowledge that (i) value has been given; (ii) the
Grantor has rights in the Pledged Securities; (iii) they have not agreed to
postpone the time of attachment of the pledge; and (iv) each Grantor has
received a duplicate original copy of this agreement.
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SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the US Administrative Agent and the Lenders to enter
into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the applicable Borrowers thereunder, each Grantor hereby
represents and warrants to the US Administrative Agent and each Lender that:
4.1 Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in Section 5 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and the US Administrative Agent and each Lender
shall be entitled to rely on each of them as if they were fully set forth
herein, provided that each reference in each such representation and warranty to
the Borrower's knowledge shall, for the purposes of this Section 4.1, be deemed
to be a reference to such Guarantor's knowledge.
4.2 Title; No Other Liens. Except for the security interest
granted to the US Administrative Agent for the ratable benefit of the Lenders
pursuant to this Agreement and the other Liens permitted to exist on the
Collateral by the Credit Agreement, such Grantor owns each item of the
Collateral free and clear of any and all Liens or claims of others. No financing
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except such as have
been filed in favor of the US Administrative Agent, for the ratable benefit of
the Lenders, pursuant to this Agreement or as are permitted by the Credit
Agreement.
4.3 Perfected First Priority Liens. The security interests
granted pursuant to this Agreement (a) upon completion of the filings and other
actions specified on Schedule 3 (which, in the case of all filings and other
documents referred to on said Schedule, have been delivered to the US
Administrative Agent in completed and duly executed form) will constitute valid
perfected security interests in all of the Collateral in favor of the US
Administrative Agent, for the ratable benefit of the Lenders, as collateral
security for such Grantor's Obligations, enforceable in accordance with the
terms hereof against all creditors of such Grantor and any Persons purporting to
purchase any Collateral from such Grantor and (b) are prior to all other Liens
on the Collateral in existence on the date hereof except for unrecorded Liens
permitted by the Credit Agreement which have priority over the Liens on the
Collateral by operation of law.
4.4 Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified on Schedule 4.
4.5 Inventory and Equipment. On the date hereof, the Inventory
and the Equipment (other than mobile goods) are kept at the locations listed on
Schedule 5.
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4.6 Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
4.7 Pledged Securities. (a) The shares of Pledged Stock
pledged by such Grantor hereunder constitute all the issued and outstanding
shares of all classes of the Capital Stock of each Issuer owned by such Grantor,
other than in the case of the Canadian Borrower, in which case the Pledged Stock
constitute 65% of the issued and outstanding shares of all classes of Capital
Stock of such Issuer.
(b) All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner, and in
the case of the Pledged Stock of the Canadian Borrower the beneficial owner, of,
and has good and marketable title to, the Pledged Securities pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except the security interest created by this Agreement.
4.8 Receivables. (a) No amount payable to such Grantor under
or in connection with any Receivable is evidenced by any Instrument or Chattel
Paper which has not been delivered to the US Administrative Agent.
(b) None of the obligors on any Receivables is a Governmental
Authority.
(c) The amounts represented by such Grantor to the Lenders
from time to time as owing to such Grantor in respect of the Receivables will at
such times be accurate.
4.9 Contracts. (a) No consent of any party (other than such
Grantor) to any Contract is required, or purports to be required, in connection
with the execution, delivery and performance of this Agreement, except such
consents that have been obtained and are in full force and effect.
(b) Each Contract is in full force and effect and constitutes
a valid and legally enforceable obligation of the parties thereto, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
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proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
(c) No consent or authorization of, filing with or other act
by or in respect of any Governmental Authority is required in connection with
the execution, delivery, performance, validity or enforceability of any of the
Contracts by any party thereto other than those which have been duly obtained,
made or performed, are in full force and effect and do not subject the scope of
any such Contract to any material adverse limitation, either specific or general
in nature.
(d) Neither such Grantor nor (to the best of such Grantor's
knowledge) any of the other parties to the Contracts is in default in the
performance or observance of any of the terms thereof.
(e) To the best of such Grantor's knowledge, the right, title
and interest of such Grantor in, to and under the Contracts are not subject to
any defenses, offsets, counterclaims or claims.
(f) Such Grantor has delivered to the US Administrative Agent
a complete and correct copy of each Contract, including all amendments,
supplements and other modifications thereto.
(g) No amount payable to such Grantor under or in connection
with any Contract is evidenced by any Instrument or Chattel Paper which has not
been delivered to the US Administrative Agent.
(h) None of the parties to any Contract is a Governmental
Authority.
4.10 Intellectual Property. (a) Schedule 6 lists all
Intellectual Property owned by such Grantor in its own name on the date hereof.
(b) To the best of such Grantor's knowledge, each Copyright,
Patent and Trademark is on the date hereof valid, subsisting, unexpired,
enforceable and has not been abandoned.
(c) Except as set forth in Schedule 6, none of the Copyrights,
Patents or Trademarks is on the date hereof the subject of any licensing or
franchise agreement.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of any
Copyright, Patent or Trademark in any respect that could reasonably be expected
to have a Material Adverse Effect.
(e) No action or proceeding is pending on the date hereof (i)
seeking to limit, cancel or question the validity of any Copyright, Patent or
Trademark, or (ii) which, if
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15
adversely determined, would have a material adverse effect on the value of any
Patent or Trademark.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the US Administrative
Agent and the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full, no Bankers' Acceptance shall be
outstanding, no Letter of Credit shall be outstanding and the Commitments shall
have terminated:
5.1 Covenants in Credit Agreement. In the case of each
Guarantor, such Guarantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that no Default or Event of Default is caused by the failure to take such
action or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
5.2 Delivery of Instruments and Chattel Paper. If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any Instrument or Chattel Paper, such Instrument or Chattel Paper
shall be immediately delivered to the US Administrative Agent, duly indorsed in
a manner satisfactory to the US Administrative Agent, to be held as Collateral
pursuant to this Agreement.
5.3 Maintenance of Insurance. (a) Such Grantor will maintain,
with financially sound and reputable companies, insurance policies (i) insuring
the Inventory, Equipment and Vehicles against loss by fire, explosion, theft and
such other casualties as may be reasonably satisfactory to the US Administrative
Agent and (ii) to the extent requested by the US Administrative Agent, insuring
such Grantor against liability for personal injury and property damage relating
to such Inventory, and Equipment, such policies to be in such form and amounts
and having such coverage as is customary for similar companies in similar
businesses.
(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the US Administrative Agent of
written notice thereof, (ii) name the US Administrative Agent as insured party
or loss payee, (iii) if reasonably requested by the US Administrative Agent,
include a breach of warranty clause and (iv) be reasonably satisfactory in all
other respects to the US Administrative Agent.
(c) Each of the Borrowers shall deliver to the US
Administrative Agent and the Lenders a report of a reputable insurance broker
with respect to such insurance during the month of _________ in each calendar
year and such supplemental reports with respect thereto as the US Administrative
Agent may from time to time reasonably request.
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5.4 Payment of Obligations. Such Grantor will pay and
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all taxes, assessments and governmental charges
or levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all claims of any kind (including, without
limitation, claims for labor, materials and supplies) against or with respect to
the Collateral, except that no such charge need be paid if the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of such Grantor and such proceedings could not reasonably
be expected to result in the sale, forfeiture or loss of any material portion of
the Collateral or any interest therein.
5.5 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the US Administrative Agent
and the Lenders from time to time statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as the US Administrative Agent may reasonably request, all in
reasonable detail.
(c) At any time and from time to time, upon the written
request of the US Administrative Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly execute and deliver such further instruments
and documents and take such further actions as the US Administrative Agent may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation statements under
the Uniform Commercial Code (or other similar laws) in effect in any
jurisdiction with respect to the security interests created hereby.
5.6 Changes in Locations, Name, etc. Such Grantor will not,
except upon 15 days' prior written notice to the US Administrative Agent and
delivery to the US Administrative Agent of (a) all additional executed financing
statements and other documents reasonably requested by the US Administrative
Agent to maintain the validity, perfection and priority of the security
interests provided for herein and (b) if applicable, a written supplement to
Schedule 5 showing any additional location at which Inventory or Equipment shall
be kept:
(i) permit any of the Inventory or Equipment to be kept at a
location other than those listed on Schedule 5;
(ii) change the location of its chief executive office or sole
place of business from that referred to in Section 4.4; or
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(iii) change its name, identity or corporate structure to such
an extent that any financing statement filed by the US Administrative
Agent in connection with this Agreement would become misleading.
5.7 Notices. Such Grantor will advise the US Administrative
Agent and the Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or
Liens permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the US Administrative Agent to exercise any of
its remedies hereunder; and
(b) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate value
of the Collateral or on the security interests created hereby.
5.8 Pledged Securities. (a) If such Grantor shall become
entitled to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any consolidation, subdivision, reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights in respect of the Capital Stock of any Issuer,
whether in addition to, in substitution of, as a conversion of, or in exchange
for, any shares of the Pledged Stock, or otherwise in respect thereof, such
Grantor shall accept the same as the agent of the US Administrative Agent and
the Lenders, hold the same in trust for the US Administrative Agent and deliver
the same forthwith to the US Administrative Agent in the exact form received,
duly indorsed by such Grantor to the US Administrative Agent, if required,
together with an undated stock power covering such certificate duly executed in
blank by such Grantor and with, if the US Administrative Agent so requests,
signature guaranteed, to be held by the US Administrative Agent, subject to the
terms hereof, as additional collateral security for the Obligations. Any sums
paid upon or in respect of the Pledged Securities upon the liquidation or
dissolution of any Issuer shall be paid over to the US Administrative Agent to
be held by it hereunder as additional collateral security for the Obligations,
and in case any distribution of capital shall be made on or in respect of the
Pledged Securities or any property shall be distributed upon or with respect to
the Pledged Securities pursuant to the recapitalization or reclassification of
the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the US Administrative Agent, be delivered to the US
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Securities shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the US Administrative Agent, hold such money or property in trust for the
Lenders, segregated from other funds of such Grantor, as additional collateral
security for the Obligations.
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(b) Without the prior written consent of the US Administrative
Agent, such Grantor will not (i) vote to enable, or take any other action to
permit, any Issuer to issue any stock or other equity securities of any nature
or to issue any other securities convertible into or granting the right to
purchase or exchange for any stock or other equity securities of any nature of
any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Pledged Securities or Proceeds thereof
(except pursuant to a transaction expressly permitted by the Credit Agreement),
(iii) create, incur or permit to exist any Lien or option in favor of, or any
claim of any Person with respect to, any of the Pledged Securities or Proceeds
thereof, or any interest therein, except for the security interests created by
this Agreement or (iv) enter into any agreement or undertaking restricting the
right or ability of such Grantor or the US Administrative Agent to sell, assign
or transfer any of the Pledged Securities or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Pledged Securities issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the US Administrative
Agent promptly in writing of the occurrence of any of the events described in
Section 5.8(a) with respect to the Pledged Securities issued by it and (iii) the
terms of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with
respect to all actions that may be required of it pursuant to Section 6.3(c) or
6.7 with respect to the Pledged Securities issued by it.
5.9 Receivables. (a) Other than in the ordinary course of
business consistent with its past practice, such Grantor will not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle
any Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.
(b) Such Grantor will deliver to the US Administrative Agent a
copy of each material demand, notice or document received by it that questions
or calls into doubt the validity or enforceability of more than 5% of the
aggregate amount of the then outstanding Receivables.
5.10 Contracts. (a) Such Grantor will perform and comply in
all material respects with all its obligations under the Contracts.
(b) Such Grantor will not amend, modify, terminate or waive
any provision of any Contract in any manner which could reasonably be expected
to materially adversely affect the value of such Contract as Collateral.
(c) Such Grantor will exercise promptly and diligently each
and every material right which it may have under each Contract (other than any
right of termination).
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(d) Such Grantor will deliver to the US Administrative Agent a
copy of each material demand, notice or document received by it relating in any
way to any Contract that questions the validity or enforceability of such
Contract.
5.11 Intellectual Property. (a) Such Grantor (either itself or
through licensees) will (i) continue to use each material Trademark on each and
every trademark class of goods applicable to its current line as reflected in
its current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii)
maintain as in the past the quality of products and services offered under such
Trademark, (iii) employ such Trademark with the appropriate notice of
registration, (iv) not adopt or use any mark which is confusingly similar or a
colorable imitation of such Trademark unless the US Administrative Agent, for
the ratable benefit of the Lenders, shall obtain a perfected security interest
in such mark pursuant to this Agreement, and (v) not (and not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby such Trademark may become invalidated.
(b) Such Grantor will not do any act, or omit to do any act,
whereby any material Patent may become abandoned or dedicated.
(c) Such Grantor (either itself or through licensees) (i) will
employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated. Such
Grantor will not (either itself or through licensees) do any act whereby any
material portion of the Copyrights may become injected into the public domain.
(d) Such Grantor will notify the US Administrative Agent and
the Lenders immediately if it knows, or has reason to know, that any application
or registration relating to any material Patent or Trademark may become
abandoned or dedicated, or of any adverse determination or development
(including, without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office
or any court or tribunal in any country) regarding such Grantor's ownership of
any material Patent or Trademark or its right to register the same or to keep
and maintain the same.
(e) Whenever such Grantor, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any Patent or Trademark with the United States Patent and
Trademark Office or any similar office or agency in any other country or any
political subdivision thereof, such Grantor shall report such filing to the US
Administrative Agent and the Lenders within five Business Days after the last
day of the fiscal quarter in which such filing occurs. Upon request of the US
Administrative Agent, such Grantor shall execute and deliver any and all
agreements, instruments, documents, and papers as the US Administrative Agent
may reasonably request to evidence the US Administrative Agent's and the
Lenders' security interest in any Copyright, Patent or Trademark and the
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goodwill and general intangibles of such Grantor relating thereto or represented
thereby.
(f) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, or any similar office or agency in any other country or
any political subdivision thereof, to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of the
material Patents and Trademarks, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.
(g) In the event that any material Patent or Trademark is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Patent or Trademark and (ii) if such Patent or
Trademark is of material economic value, promptly notify the US Administrative
Agent and the Lenders after it learns thereof and sue for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) After the
occurrence and during the continuance of an Event of Default, the US
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the US Administrative Agent may require in connection with such test
verifications. At any time and from time to time, upon the US Administrative
Agent's request and at the expense of the relevant Grantor, such Grantor shall
cause independent public accountants or others satisfactory to the US
Administrative Agent to furnish to the US Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables, in each case, unless an Event of Default has occurred and is
continuing, in form consistent with the form of such reports prepared by such
Grantor in the normal conduct of its business.
(b) The US Administrative Agent hereby authorizes each Grantor
to collect such Grantor's Receivables, subject to the US Administrative Agent's
direction and control, and the US Administrative Agent may curtail or terminate
said authority at any time after the occurrence and during the continuance of an
Event of Default. If required by the US Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, any payments
of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in
any event, within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the US Administrative Agent if
required, in a Collateral Account maintained under the sole dominion and control
of the US Administrative Agent, subject to withdrawal by the US Administrative
Agent for the account of the Lenders
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only as provided in Section , and (ii) until so turned over, shall be held by
such Grantor in trust for the US Administrative Agent and the Lenders,
segregated from other funds of such Grantor. Each such deposit of Proceeds of
Receivables shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.
(c) At the US Administrative Agent's request after the
occurrence and during the continuance of an Event of Default, each Grantor shall
deliver to the US Administrative Agent all original and other documents
evidencing, and relating to, the agreements and transactions which gave rise to
the Receivables, including, without limitation, all original orders, invoices
and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a)
At any time after the occurrence and during the continuance of an Event of
Default, the US Administrative Agent in its own name or in the name of others
may at any time communicate with obligors under the Receivables and parties to
the Contracts to verify with them to the US Administrative Agent's satisfaction
the existence, amount and terms of any Receivables or Contracts.
(b) Upon the request of the US Administrative Agent at any
time after the occurrence and during the continuance of an Event of Default,
each Grantor shall notify obligors on the Receivables and parties to the
Contracts that the Receivables and the Contracts have been assigned to the US
Administrative Agent for the ratable benefit of the Lenders and that payments in
respect thereof shall be made directly to the US Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables and Contracts to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto. Neither the US Administrative Agent nor any Lender shall
have any obligation or liability under any Receivable (or any agreement giving
rise thereto) or Contract by reason of or arising out of this Agreement or the
receipt by the US Administrative Agent or any Lender of any payment relating
thereto, nor shall the US Administrative Agent or any Lender be obligated in any
manner to perform any of the obligations of any Grantor under or pursuant to any
Receivable (or any agreement giving rise thereto) or Contract, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the US Administrative Agent shall have given
notice to the relevant Grantor of the US Administrative Agent's intent to
exercise its corresponding rights pursuant to Section 6.3(b), each Grantor shall
be permitted to receive all cash dividends paid in respect of the
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Pledged Stock and all payments made in respect of the Pledged Notes, in each
case paid in the normal course of business of the relevant Issuer and consistent
with past practice, to the extent permitted in the Credit Agreement, and to
exercise all voting and corporate rights with respect to the Pledged Securities;
provided, however, that no vote shall be cast or corporate right exercised or
other action taken which, in the US Administrative Agent's reasonable judgment,
would impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
(b) If an Event of Default shall occur and be continuing and
the US Administrative Agent shall give notice of its intent to exercise such
rights to the relevant Grantor or Grantors, (i) the US Administrative Agent
shall have the right to receive any and all cash dividends, payments or other
Proceeds paid in respect of the Pledged Securities and make application thereof
to the Obligations in such order as the US Administrative Agent may determine,
and (ii) the Grantor shall do all things necessary (including causing its
nominees on the board of directors of the Issuers to approve any required stock
transfer) to ensure that any or all of the Pledged Securities shall be
registered in the name of the US Administrative Agent or its nominee, and the US
Administrative Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Pledged Securities at any meeting
of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and
all rights of conversion, exchange, subscription and any other rights,
privileges or options pertaining to such Pledged Securities as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Securities upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of any Issuer, or upon the exercise by any Grantor or
the US Administrative Agent of any right, privilege or option pertaining to such
Pledged Securities, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Securities with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the US Administrative Agent may determine), all without liability
except to account for property actually received by it, but the US
Administrative Agent shall have no duty to any Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer
of any Pledged Securities pledged by such Grantor hereunder to (i) comply with
any instruction received by it from the US Administrative Agent in writing that
(x) states that an Event of Default has occurred and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Securities directly to the US Administrative Agent.
6.4 Proceeds to be Turned Over To US Administrative Agent. In
addition to the rights of the US Administrative Agent and the Lenders specified
in Section 6.1 with
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respect to payments of Receivables, if an Event of Default shall occur and be
continuing, all Proceeds received by any Grantor consisting of cash, checks and
other near-cash items shall be held by such Grantor in trust for the US
Administrative Agent and the Lenders, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the US Administrative Agent in the exact form received by such Grantor (duly
indorsed by such Grantor to the US Administrative Agent, if required). All
Proceeds received by the US Administrative Agent hereunder shall be held by the
US Administrative Agent in a Collateral Account maintained under its sole
dominion and control. All Proceeds while held by the US Administrative Agent in
a Collateral Account (or by such Grantor in trust for the US Administrative
Agent and the Lenders) shall continue to be held as collateral security for all
the Obligations and shall not constitute payment thereof until applied as
provided in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be
agreed upon by the Borrowers and the US Administrative Agent, or, if an Event of
Default shall have occurred and be continuing, at any time at the US
Administrative Agent's election, the US Administrative Agent may apply all or
any part of Proceeds held in any Collateral Account in payment of the
Obligations in such order as the US Administrative Agent may elect, and any part
of such funds which the US Administrative Agent elects not so to apply and deems
not required as collateral security for the Obligations shall be paid over from
time to time by the US Administrative Agent to the Borrowers or to whomsoever
may be lawfully entitled to receive the same. Any balance of such Proceeds
remaining after the Obligations shall have been paid in full, no Letters of
Credit shall be outstanding and the Commitments shall have terminated shall be
paid over to the Borrowers or to whomsoever may be lawfully entitled to receive
the same.
6.6 Code and Other Remedies. If an Event of Default shall
occur and be continuing, the US Administrative Agent, on behalf of the Lenders,
may exercise, in addition to all other rights and remedies granted to them in
this Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the Code or any other applicable law. Without limiting the generality of the
foregoing, the US Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do any
of the foregoing), in one or more parcels at public or private sale or sales, at
any exchange, broker's board or office of the US Administrative Agent or any
Lender or elsewhere upon such terms and conditions as it may deem advisable and
at such prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. The US Administrative Agent or any Lender
shall have the right upon any such public sale or sales, and, to the extent
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permitted by law, upon any such private sale or sales, to purchase the whole
or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived or
released to the maximum extent not prohibited or expressly invalidated by
applicable law. Each Grantor further agrees, at the US Administrative Agent's
request, to assemble the Collateral and make it available to the US
Administrative Agent at places which the US Administrative Agent shall
reasonably select, whether at such Grantor's premises or elsewhere. The US
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.6, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the US Administrative Agent and the Lenders hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the
payment in whole or in part of the Obligations, in such order as the US
Administrative Agent may elect, and only after such application and after the
payment by the US Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-504(1)(c) of the
Code, need the US Administrative Agent account for the surplus, if any, to any
Grantor. To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands it may acquire against the US Administrative Agent
or any Lender arising out of the exercise by them of any rights hereunder. If
any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition.
6.7 Registration Rights. (a) If the US Administrative Agent
shall determine to exercise its right to sell any or all of the Pledged Stock
pursuant to Section 6.6, and if in the opinion of the US Administrative Agent it
is necessary or advisable to have the Pledged Stock, or that portion thereof to
be sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the US Administrative Agent, reasonably necessary or
advisable to register the Pledged Stock, or that portion thereof to be sold,
under the provisions of the Securities Act, (ii) use its best efforts to cause
the registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
US Administrative Agent, are reasonably necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. Each
Grantor agrees to cause the such Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the US
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.
(b) Each Grantor recognizes that the US Administrative Agent
may be unable
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25
to effect a public sale of any or all the Pledged Stock, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The US
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the US Administrative Agent
and the Lenders, that the US Administrative Agent and the Lenders have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 6.7 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Credit Agreement.
6.8 Waiver; Deficiency. Each Grantor waives and agrees not to
assert any rights or privileges which it may acquire under Section 9-112 of the
Code. Each Grantor shall remain liable for any deficiency if the proceeds of any
sale or other disposition of the Collateral are insufficient to pay its
Obligations and the reasonable fees and disbursements of any attorneys employed
by the US Administrative Agent or any Lender to collect such deficiency.
SECTION 7. THE US ADMINISTRATIVE AGENT
7.1 The US Administrative Agent's Appointment as
Attorney-in-Fact, etc. (a) Each Grantor hereby irrevocably constitutes and
appoints the US Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in
the name of such Grantor or in its own name, for the purpose of carrying out the
terms of this Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the generality
of the foregoing, each Grantor hereby gives
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26
the US Administrative Agent the power and right, on behalf of such Grantor,
without notice to or assent by such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under
any Receivable or Contract or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of
law or equity or otherwise deemed appropriate by the US Administrative
Agent for the purpose of collecting any and all such moneys due under
any Receivable or Contract or with respect to any other Collateral
whenever payable;
(ii) in the case of any Copyright, Patent or Trademark,
execute and deliver any and all agreements, instruments, documents and
papers as the US Administrative Agent may reasonably request to
evidence the US Administrative Agent's and the Lenders' security
interest in such Copyright, Patent or Trademark and the goodwill and
general intangibles of such Grantor relating thereto or represented
thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in
Section 6.6 or 6.7, any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become
due thereunder directly to the US Administrative Agent or as the US
Administrative Agent shall direct; (2) ask or demand for, collect,
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of any Collateral; (3) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (4) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any
portion thereof and to enforce any other right in respect of any
Collateral; (5) defend any suit, action or proceeding brought against
such Grantor with respect to any Collateral; (6) settle, compromise or
adjust any such suit, action or proceeding and, in connection
therewith, to give such discharges or releases as the US Administrative
Agent may deem appropriate; (7) assign any Copyright, Patent or
Trademark (along with the goodwill of the business to which any such
Copyright, Patent or Trademark pertains), throughout the world for such
term or terms, on such conditions, and in such manner, as the US
Administrative Agent shall in its sole discretion determine; and (8)
generally, sell, transfer, pledge and
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27
make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the US Administrative
Agent were the absolute owner thereof for all purposes, and do, at the
US Administrative Agent's option and such Grantor's expense, at any
time, or from time to time, all acts and things which the US
Administrative Agent deems necessary to protect, preserve or realize
upon the Collateral and the US Administrative Agent's and the Lenders'
security interests therein and to effect the intent of this Agreement,
all as fully and effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the US
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the US Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the US Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due ABR Loans under the Credit Agreement,
from the date of payment by the US Administrative Agent to the date reimbursed
by the relevant Grantor, shall be payable by such Grantor to the US
Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2 Duty of US Administrative Agent. The US Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Code or otherwise, shall be to deal with it in the same manner as the US
Administrative Agent deals with similar property for its own account. Neither
the US Administrative Agent, any Lender nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the US Administrative Agent and the Lenders hereunder are solely to
protect the US Administrative Agent's and the Lenders' interests in the
Collateral and shall not impose any duty upon the US Administrative Agent or any
Lender to exercise any such powers. The US Administrative Agent and the Lenders
shall be accountable only for amounts that they
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actually receive as a result of the exercise of such powers, and neither they
nor any of their officers, directors, employees or agents shall be responsible
to any Grantor for any act or failure to act hereunder, except for their own
gross negligence or willful misconduct.
7.3 Execution of Financing Statements. Pursuant to Section
9-402 of the Code and any other applicable law, each Grantor authorizes the US
Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the US
Administrative Agent reasonably determines appropriate to perfect the security
interests of the US Administrative Agent under this Agreement. A photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement or other filing or recording document or instrument for filing or
recording in any jurisdiction.
7.4 Authority of US Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the US Administrative Agent
under this Agreement with respect to any action taken by the US Administrative
Agent or the exercise or non-exercise by the US Administrative Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the US
Administrative Agent and the Lenders, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the US Administrative Agent and the Grantors, the US
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting, and
no Grantor shall be under any obligation, or entitlement, to make any inquiry
respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by each affected Grantor and the US
Administrative Agent, provided that any provision of this Agreement imposing
obligations on any Grantor may be waived by the US Administrative Agent in a
written instrument executed by the US Administrative Agent.
8.2 Notices. All notices, requests and demands to or upon the
US Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in subsection 11.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the US Administrative Agent nor any Lender shall by any act (except by a
written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right
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29
or remedy hereunder or to have acquiesced in any Default or Event of Default. No
failure to exercise, nor any delay in exercising, on the part of the US
Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A
waiver by the US Administrative Agent or any Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the US Administrative Agent or such Lender would otherwise have on
any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay or reimburse each Lender and the US Administrative Agent for all
its costs and expenses incurred in collecting against such Guarantor under the
guarantee contained in Section 2 or otherwise enforcing or preserving any rights
under this Agreement and the other Loan Documents to which such Guarantor is a
party, including, without limitation, the reasonable fees and disbursements of
counsel (including the allocated fees and expenses of in-house counsel) to each
Lender and of counsel to the US Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the US
Administrative Agent and the Lenders harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the US
Administrative Agent and the Lenders harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement (collectively, the "indemnified liabilities") to the extent the
Borrowers would be required to do so pursuant to Section 11.5 of the Credit
Agreement.
(d) The agreements in this Section 8.4 shall survive repayment
of the Obligations and all other amounts payable under the Credit Agreement and
the other Loan Documents.
8.5 Amendment and Restatement; Update of Schedules. (a) The
undersigned parties to the Security Agreement as defined in the Existing Credit
Agreement agree that such Security Agreement is hereby amended and restated in
its entirety by this Agreement.
(b) Each Grantor agrees that prior to the consummation of the
Acquisition it will provide such information as is necessary in the
determination of the US Administrative Agent in order to include in the
Schedules hereto information related to the Collateral and
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30
appropriately addressed in such Schedules, and upon such consummation such
Schedules shall be deemed automatically to be amended to include such applicable
information provided by the Grantors and determined by the US Administrative
Agent to be appropriate for inclusion therein. On the date of such consummation,
all representations and warranties by each Grantor shall be deemed to be
confirmed, reaffirmed and restated as of such date giving effect to such
amendments to the Schedules hereto.
8.6 Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of the US Administrative Agent and the Lenders and their successors and assigns;
provided that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the US
Administrative Agent.
8.7 Set-Off. Each Guarantor hereby irrevocably authorizes the
Administrative Agents and each Lender at any time and from time to time while an
Event of Default or a Default pursuant to subsection 9(a) of the Credit
Agreement shall have occurred and be continuing, without notice to such
Guarantor, any other Guarantor or any of the Borrowers, any such notice being
expressly waived by each Guarantor and by each of the Borrowers, to set-off and
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the
Administrative Agents or such Lender to or for the credit or the account of such
Guarantor, or any part thereof in such amounts as the Administrative Agents or
such Lender may elect, against and on account of the obligations and liabilities
of such Guarantor to the Administrative Agents or such Lender hereunder and
claims of every nature and description of the Administrative Agents or such
Lender against such Guarantor, in any currency, whether arising hereunder, under
the Credit Agreement, any other Loan Document or otherwise, as the
Administrative Agents or such Lender may elect, whether or not the
Administrative Agents or any Lender has made any demand for payment and although
such obligations, liabilities and claims may be contingent or unmatured. The
relevant Administrative Agent and each Lender shall notify such Guarantor
promptly of any such set-off and the application made by such Administrative
Agent or such Lender of the proceeds thereof, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of the Administrative Agents and each Lender under this Section 8.6 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Administrative Agents or such Lender may have.
8.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.
8.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of
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31
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
8.10 Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
8.11 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the US Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the US Administrative Agent or
any Lender relative to subject matter hereof not expressly set forth or referred
to herein or in the other Loan Documents.
8.12 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.13 Submission To Jurisdiction; Waivers. Each Guarantor
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any
judgement in respect thereof, to the non-exclusive general jurisdiction
of the Courts of the State of New York, the courts of the United States
of America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Guarantor at its address referred to in Section 8.2 or
at such other address of which the US Administrative Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
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(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
8.14 Acknowledgements. Each Guarantor hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents
to which it is a party;
(b) neither the US Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Guarantor arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Guarantors, on the one hand, and the
US Administrative Agent and Lenders, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Guarantors and the
Lenders.
8.15 WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
8.16 Additional Grantors. Each Subsidiary of the Borrower that
is required to become a party to this Agreement pursuant to Section 7.10(b) of
the Credit Agreement shall become a Grantor for all purposes of this Agreement
upon execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Annex 1 hereto.
8.17 Releases. (a) At such time as the Loans, the
Reimbursement Obligations and the other Obligations shall have been paid in
full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created hereby, and
this Agreement and all obligations (other than those expressly stated to survive
such termination) of the US Administrative Agent and each Grantor hereunder
shall terminate, all without delivery of any instrument or performance of any
act by any party, and all rights to the Collateral shall revert to the Grantors.
At the request and sole expense of any Grantor following any such termination,
the US Administrative Agent shall deliver to such Grantor any Collateral held by
the US Administrative Agent hereunder, and execute and deliver to such Grantor
such documents as such Grantor shall reasonably request to evidence such
termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of
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33
by any Grantor in a transaction permitted by the Credit Agreement, then the US
Administrative Agent, at the request and sole expense of such Grantor, shall
execute and deliver to such Grantor all releases or other documents reasonably
necessary or desirable for the release of the Liens created hereby on such
Collateral. At the request and sole expense of a Borrower, a Guarantor shall be
released from its obligations hereunder in the event that all the Capital Stock
of such Guarantor shall be sold, transferred or otherwise disposed of in a
transaction permitted by the Credit Agreement; provided that such Borrower shall
have delivered to the US Administrative Agent, at least ten Business Days prior
to the date of the proposed release, a written request for release identifying
the relevant Guarantor and the terms of the sale or other disposition in
reasonable detail, including the price thereof and any expenses in connection
therewith, together with a certification by such Borrower stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents.
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
[NAME OF GRANTOR]
By:
-------------------------------------
Title:
<PAGE> 99
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
<PAGE> 100
Schedule 2
DESCRIPTION OF PLEDGED SECURITIES
Pledged Stock:
<TABLE>
<S> <C> <C> <C>
Stock Certificate
Issuer Class of Stock No. No. of Shares
- ----------------------------------------- -------------------- ------------------------ --------------------
</TABLE>
Pledged Notes:
<TABLE>
<S> <C> <C>
Issuer Payee Principal Amount
- ----------------------------------------- ---------------------- ----------------------
</TABLE>
<PAGE> 101
Schedule 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
[List each office where a financing statement is to be filed]
Patent and Trademark Filings
[List all filings]
Actions with respect to Pledged Stock
Other Actions
[Describe other actions to be taken]
<PAGE> 102
Schedule 4
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Grantor Location
------- --------
<PAGE> 103
Schedule 5
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Locations
------- ---------
<PAGE> 104
Schedule 6
COPYRIGHTS AND COPYRIGHT LICENSES
PATENTS AND PATENT LICENSES
TRADEMARKS AND TRADEMARK LICENSES
<PAGE> 105
Annex 1 to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of August __, 199_, made by
______________________________, a ______________ corporation (the "Additional
Grantor"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY, as
administrative agent (in such capacity, the "US Administrative Agent") for the
banks and other financial institutions (the "Lenders") parties to the Credit
Agreement referred to below. All capitalized terms not defined herein shall have
the meaning ascribed to them in such Credit Agreement.
W I T N E S S E T H :
WHEREAS, Outdoor Systems, Inc. (the "Company"), 3284085 Canada
Inc., a Canadian corporation (such corporation, and, upon the consummation
thereof, the corporation resulting from the amalgamation of 3284085 Canada Inc.
and Mediacom, Inc., the "Canadian Borrower"; together with the Company, the
"Borrowers"), the Lenders, the US Administrative Agent and Canadian Imperial
Bank of Commerce, as Canadian Administrative Agent, have entered into the Third
Amended and Restated Credit Agreement, dated as of August __, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Company
and certain of its Affiliates (other than the Additional Grantor) have entered
into the US Guarantee and Collateral Agreement, dated as of August __, 1996 (as
amended, supplemented or otherwise modified from time to time, the "US Guarantee
and Collateral Agreement") in favor of the US Administrative Agent for the
benefit of the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor
to become a party to the US Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the US Guarantee
and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and
delivering this Assumption Agreement, the Additional Grantor, as provided in
Section 8.15 of the US Guarantee and Collateral Agreement, hereby becomes a
party to the US Guarantee and Collateral Agreement as a Grantor thereunder with
the same force and effect as if originally named therein as a Grantor and,
without limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Grantor thereunder. The information set
<PAGE> 106
2
forth in Annex 1-A hereto is hereby added to the information set forth in
Schedules ____________* to the US Guarantee and Collateral Agreement. The
Additional Grantor hereby represents and warrants that each of the
representations and warranties contained in Section 3 of the US Guarantee and
Collateral Agreement is true and correct on and as the date hereof (after giving
effect to this Assumption Agreement) as if made on and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By: ----------------------
Name:
Title:
- --------------
* Refer to each Schedule which needs to be supplemented.
<PAGE> 1
EXHIBIT 99.5
===============================================================================
OUTDOOR SYSTEMS, INC.
AND
UNITED STATES TRUST COMPANY OF NEW YORK, Trustee
First Supplemental Indenture
Dated as of August 22, 1996
--------------
$115,000,000
10 3/4% SENIOR NOTES DUE 2003
===============================================================================
Supplemental to Indenture
Dated as of August 15, 1993
<PAGE> 2
FIRST SUPPLEMENTAL INDENTURE
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of August 22, 1996, is entered into
between OUTDOOR SYSTEMS, INC., a Delaware corporation (the "Issuer"), and UNITED
STATES TRUST COMPANY OF NEW YORK, a New York corporation (the "Trustee"):
W I T N E S S E T H:
WHEREAS, the Issuer and the Trustee entered into an Indenture dated as
of August 15, 1993 (the "Original Indenture"); and
WHEREAS, pursuant to Section 7.2 of the Original Indenture, with the
consent of the holders of not less than a majority in aggregate principal amount
of the Securities outstanding, the Issuer and the Trustee may enter into
supplemental indentures for the purpose of changing in any manner or eliminating
any of the provisions of the Original Indenture or of modifying in any manner
the rights of the holders of the Securities with certain exceptions; and
WHEREAS, the Issuer has requested that the Trustee enter into this
First Supplemental Indenture for the purpose of deleting certain of the Issuer's
covenants under Article III of the Original Indenture, and the Issuer has filed
with the Trustee evidence of the consent to the amendments set forth in this
First Supplemental Indenture by the holders of at least a majority in aggregate
principal amount of the Securities; and
WHEREAS, all capitalized terms used herein and not otherwise defined
shall have the meanings given to such terms in the Original Indenture;
NOW, THEREFORE, in consideration of the premises, the Issuer and the
Trustee mutually covenant and agree for the equal and proportionate benefit of
the respective holders from time to time of the Securities as follows:
ARTICLE I
AMENDMENTS
Section 1.1 Amendment to Section 1.1. of the Original Indenture.
Section 1.1 of the Original Indenture is hereby amended as follows:
(a) The terms "Acquired Indebtedness", "Acquisition Indebtedness",
"Available Cash Flow", "Cash Flow Leverage Ratio", "Consolidated Interest
Expense", "Consolidated Net Income", "Consolidated Tax Expense", "Exchangeable
Preferred Stock", "Incentive Units", "Investments", "Inter-Borrower Agreement",
"Increasing Rate Notes", "Junior Exchange Note", "Junior Reduction Note",
"Permitted Dividend Encumbrances", "Permitted Indebtedness", "Permitted
Investments", "Permitted Liens", "Permitted Payment", "Put-Call Agreement",
"Refinancing Indebtedness",
1
<PAGE> 3
"Restricted Investment", "Restricted Payment", "Security Agreement Pledges",
"Services Agreement", and "Subrogation Note" and the definitions for such terms
are hereby deleted in their entirety from Section 1.1 of the Original Indenture.
(b) The term "Asset Sale" is hereby amended by deleting the words
"permitted to be engaged in by the Issuer or its Restricted Subsidiaries
pursuant to Section 3.19 hereof" from subpart (iii) thereof and in replacement
therefor adding the words "of Outdoor advertising".
Section 1.2 Amendment to Article III of the Original Indenture. Article
III of the Original Indenture is hereby amended as follows:
(a) The title and text to Sections 3.8, 3.9, 3.10, 3.12, 3.13, 3.14,
3.15, and 3.19 of the Original Indenture are hereby deleted in their entirety,
together with any references thereto in the Indenture and the deleted language
in each of such Sections is hereby replaced with the word "[RESERVED]".
(b) Section 3.18 of the Original Indenture is hereby amended by
deleting the first sentence thereof and revising the second sentence to read in
its entirety as follows:
"The Issuer may designate any Unrestricted Subsidiary as a
Restricted Subsidiary so long as, at the time of such designation and after
giving effect thereto, no Default or Event of Default shall occur as a
consequence thereof."
Section 1.3 Amendment to Section 8.1 of the Original Indenture.
Section 8.1 of the Original Indenture is hereby amended by deleting
subparagraph (d) therefrom.
ARTICLE II
MISCELLANEOUS
Section 2.1 Ratification. Except as hereby expressly provided, the
Original Indenture, as amended by this First Supplemental Indenture, is in all
respects ratified and confirmed and all of its terms, provisions and conditions
shall be and remain in full force and effect.
Section 2.2 Headings. The Article headings in this First Supplemental
Indenture are for convenience only and shall not effect the construction hereof.
Section 2.3 Counterparts. This First Supplemental Indenture may be
executed in any number of counterparts, each of which shall be deemed an
original, and such counterparts shall together constitute but one and the same
instrument.
Section 2.4 Governing Law. This First Supplemental Indenture shall be
construed in accordance with and governed by the laws of the State of New York.
2
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
OUTDOOR SYSTEMS, INC.
By:/s/ WILLIAM S. LEVINE
-----------------------------
Name: William S. Levine
Title: Chairman of the Board
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:/s/ CYNTHIA CHANEY
-----------------------------
Name: Cynthia Chaney
Title: Assistant Vice President
3
<PAGE> 5
VERIFICATION
STATE OF NEW YORK
COUNTY OF NEW YORK
On the 16th day of August, 1996, before me personally came
_____________________________, to me known, who being by me duly sworn, did
depose and say that he is _____________________ of Outdoor Systems, Inc., a
Delaware corporation, and that he signed his name thereto on behalf of such
corporation.
/s/ AVROHOM J. KESS
--------------------------------
Notary Public in and for the
State of New York
My Commission Expires: April 15, 1998
4
<PAGE> 6
VERIFICATION
STATE OF NEW YORK
COUNTY OF NEW YORK
On the 19th day of August, 1996, before me personally came Cynthia
Chaney, to me known, who being by me duly sworn, did depose and say that she is
Assistant Vice President of United States Trust Company of New York, as Trustee,
a New York corporation, and that he signed his name thereto on behalf of such
corporation.
/s/ CHRISTOPHER GRELL
------------------------------------
Notary Public in and for the
State of New York
My Commission Expires: June 15, 1997
5
