BOWATER INCORPORATED
-----------------------------
BRIDGE CREDIT AGREEMENT
Dated as of July 2, 2001
------------------------------
THE CHASE MANHATTAN BANK,
as Administrative Agent
================================================================================
J.P. MORGAN SECURITIES INC.,
as Co-Advisor, Co-Arranger and Co-Bookrunner
GOLDMAN SACHS CREDIT PARTNERS, L.P.,
as Co-Advisor, Co-Arranger and Co-Bookrunner
================================================================================
2
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is attached but is inserted for convenience of reference only.
Page
Section 1. Definitions and Accounting Matters....................................................................1 - -----------------------------------------------
1.01 Certain Defined Terms..............................................................................1
----------------------------
1.02 Accounting Terms and Determinations...............................................................12
------------------------------------------
1.03 Types of Loans....................................................................................13
---------------------
Section 2. Commitments, Loans and Prepayments...................................................................13 - -----------------------------------------------
2.01 Loans.............................................................................................13
------------
2.02 Borrowings of Loans...............................................................................13
--------------------------
2.03 [Reserved]........................................................................................13
-----------------
2.04 Changes of Commitments............................................................................13
-----------------------------
2.05 Facility Fee......................................................................................14
-------------------
2.06 Lending Offices...................................................................................14
----------------------
2.07 Several Obligations; Remedies Independent.........................................................14
------------------------------------------------
2.08 Loan Accounts; Promissory Notes...................................................................14
--------------------------------------
2.09 Optional Prepayments and Conversions or Continuations of Loans....................................15
---------------------------------------------------------------------
2.10 Mandatory Prepayments.............................................................................15
----------------------------
Section 3. Payments of Principal and Interest...................................................................16 - -----------------------------------------------
3.01 Repayment of Loans................................................................................16
-------------------------
3.02 Interest..........................................................................................16
---------------
Section 4. Payments; Pro Rata Treatment; Computations; Etc......................................................17 - ------------------------------------------------------------
4.01 Payments..........................................................................................17
---------------
4.02 Pro Rata Treatment................................................................................17
-------------------------
4.03 Computations......................................................................................18
-------------------
4.04 Minimum Amounts...................................................................................18
----------------------
4.05 Certain Notices...................................................................................18
----------------------
4.06 Non-Receipt of Funds by the Administrative Agent..................................................19
-------------------------------------------------------
4.07 Sharing of Payments, Etc..........................................................................20
-------------------------------
Section 5. Yield Protection, Etc................................................................................21 - ----------------------------------
5.01 Additional Costs..................................................................................21
-----------------------
5.02 Limitation on Types of Loans......................................................................24
-----------------------------------
5.03 Illegality........................................................................................24
-----------------
5.04 Treatment of Affected Loans.......................................................................24
----------------------------------
3
5.05 Compensation......................................................................................25
-------------------
5.06 U.S. Taxes........................................................................................26
-----------------
Section 6. [Reserved]...........................................................................................27 - -----------------------
Section 7. Conditions Precedent.................................................................................27 - ---------------------------------
7.01 Conditions........................................................................................27
-----------------
7.02 Additional Conditions.............................................................................29
----------------------------
Section 8. Representations and Warranties.......................................................................29 - -------------------------------------------
8.01 Corporate Existence...............................................................................29
--------------------------
8.02 Financial Condition...............................................................................30
--------------------------
8.03 Litigation........................................................................................31
-----------------
8.04 No Breach.........................................................................................31
----------------
8.05 Action............................................................................................31
-------------
8.06 Approvals.........................................................................................32
----------------
8.07 Use of Credit.....................................................................................32
--------------------
8.08 ERISA; Canadian Plans.............................................................................32
----------------------------
8.09 Taxes.............................................................................................32
------------
8.10 Investment Company Act............................................................................33
-----------------------------
8.11 Public Utility Holding Company Act................................................................33
-----------------------------------------
8.12 Material Agreements and Liens.....................................................................33
------------------------------------
8.13 Environmental Matters.............................................................................34
----------------------------
8.14 Subsidiaries, Etc.................................................................................34
------------------------
8.15 True and Complete Disclosure......................................................................34
-----------------------------------
8.16 Alliance Arrangement Agreement; Management Proxy Circular; Etc....................................35
---------------------------------------------------------------------
Section 9. Covenants of the Borrower............................................................................35 - --------------------------------------
9.01 Financial Statements, Etc.........................................................................35
--------------------------------
9.02 Litigation........................................................................................38
-----------------
9.03 Existence, Etc....................................................................................38
---------------------
9.04 Insurance.........................................................................................39
----------------
9.05 Prohibition of Fundamental Changes................................................................39
-----------------------------------------
9.06 Limitation on Liens...............................................................................40
--------------------------
9.07 Consolidated Net Worth............................................................................42
-----------------------------
9.08 Total Debt to Total Capital Ratio.................................................................42
----------------------------------------
9.09 Transactions with Affiliates......................................................................42
-----------------------------------
9.10 Use of Proceeds...................................................................................43
----------------------
9.11 Indebtedness......................................................................................43
-------------------
9.12 Restrictive Agreements............................................................................44
-----------------------------
9.13 Limitation on Lines of Business...................................................................44
--------------------------------------
9.14 Debt Incurrence...................................................................................44
----------------------
Section 10. Events of Default...................................................................................44 - -------------------------------
(ii) 4 Section 11. The Administrative Agent............................................................................47 - --------------------------------------
11.01 Appointment, Powers and Immunities...............................................................47
------------------------------------------
11.02 Reliance by Administrative Agent.................................................................48
----------------------------------------
11.03 Defaults.........................................................................................48
----------------
11.04 Rights as a Bank.................................................................................48
------------------------
11.05 Indemnification..................................................................................49
-----------------------
11.06 Non-Reliance on Administrative Agent and Other Banks.............................................49
------------------------------------------------------------
11.07 Failure to Act...................................................................................49
----------------------
11.08 Resignation or Removal of Administrative Agent...................................................50
------------------------------------------------------
Section 12. Miscellaneous.......................................................................................50 - ---------------------------
12.01 Waiver...........................................................................................50
--------------
12.02 Notices..........................................................................................50
---------------
12.03 Expenses, Etc....................................................................................51
---------------------
12.04 Amendments, Etc..................................................................................52
-----------------------
12.05 Successors and Assigns...........................................................................53
------------------------------
12.06 Assignments and Participations...................................................................53
--------------------------------------
12.07 Survival.........................................................................................55
----------------
12.08 Captions.........................................................................................55
----------------
12.09 Counterparts.....................................................................................55
--------------------
12.10 Governing Law; Submission to Jurisdiction........................................................55
-------------------------------------------------
12.11 Waiver of Jury Trial.............................................................................55
----------------------------
12.12 No Immunity......................................................................................56
-------------------
12.13 Judgment Currency................................................................................56
-------------------------
12.14 Use of English Language..........................................................................56
-------------------------------
12.15 Treatment of Certain Information.................................................................57
----------------------------------------
SCHEDULE I Commitments SCHEDULE II Material Agreements and Liens SCHEDULE III Subsidiaries SCHEDULE IV Litigation SCHEDULE V Permitted Dispositions
EXHIBIT A Form of Assignment and Acceptance EXHIBIT B Form of Opinion of Counsel to the Borrower EXHIBIT C Form of Opinion of Special New York Counsel to Chase EXHIBIT D Form of Confidentiality Agreement
(iii) 5
BRIDGE CREDIT AGREEMENT dated as of July 2, 2001, among: BOWATER INCORPORATED, a corporation duly organized and validly existing under the laws of the State of Delaware (the "Borrower"); each of the lenders that is a signatory hereto identified under the caption "BANKS" on the signature pages hereto or that, pursuant to Section 12.06(b) hereof, shall become a "Bank" hereunder (individually, a "Bank" and, collectively, the "Banks"); and THE CHASE MANHATTAN BANK, as administrative agent for the Banks (in such capacity, together with its successors in such capacity, the "Administrative Agent").
The Borrower has requested that the Banks make loans to it in an aggregate principal amount not exceeding $500,000,000 to finance the Alliance Arrangement (as hereinafter defined), to refinance existing indebtedness of the Borrower and its Subsidiaries (as so defined), and to pay fees and expenses relating thereto, and for the general corporate purposes of the Borrower and its Subsidiaries. The Banks are prepared to make such loans upon the terms and conditions hereof. Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms.
As used herein, the following terms shall have the following meanings (all terms defined in this Section 1.01 or in other provisions of this Agreement in the singular to have the same meanings when used in the plural and vice versa):
"Administrative Questionnaire" shall mean an Administrative Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" shall mean any Person that directly or indirectly controls, or is under common control with, or is controlled by, the Borrower and, if such Person is an individual, any member of the immediate family (including parents, spouse, children and siblings) of such individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust. As used in this definition, "control" (including, with its correlative meanings, "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise); provided that, in any event, any Person that owns directly or indirectly securities having 10% or more of the voting power for the election of directors or other governing body of a corporation or 10% or more of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person. Notwithstanding the foregoing, (a) no individual shall be an Affiliate solely by reason of his or her being a director, officer or employee of the Borrower or any of its Subsidiaries and (b) none of the Subsidiaries of the Borrower shall be Affiliates.
"Alliance" shall mean Alliance Forest Products Inc., a corporation existing under the laws of Canada.
Bridge Credit Agreement
----------------------- 6
-2-
"Alliance Arrangement" shall mean the arrangement in respect of Alliance and its shareholders under the provisions of Section 192 of the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended, on the terms and conditions set forth in the Plan of Arrangement under and as defined in the Alliance Arrangement Agreement.
"Alliance Arrangement Agreement" shall mean the Arrangement Agreement dated as of April 1, 2001 between the Borrower and Alliance.
"Applicable Lending Office" shall mean, for each Bank and for each Type of Loan, the "Lending Office" of such Bank (or of an affiliate of such Bank) as such Bank may from time to time specify to the Administrative Agent and the Borrower as the office by which its Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean: (a) with respect to Base Rate Loans, 0.0000% per annum, except that during any Level V Period the rate shall be 0.2500%; and (b) with respect to Eurodollar Loans, the rate for such Loan for each rating level period set forth in the schedule below:
Rating Eurodollar Loans
Level I Period 0.5650%
Level II Period 0.6700%
Level III Period 0.7750%
Level IV Period 0.8750%
Level V Period 1.3000%
Notwithstanding the foregoing, the Applicable Margin for Eurodollar Loans shall be increased by 0.2000% per annum for each rating level period from and after January 1, 2002. Any change in the Applicable Margin for any Loan by reason of a change in the Standard & Poor's Rating or the Moody's Rating shall become effective on the date two Business Days after the announcement or publication by the respective rating agencies of a change in such rating or, in the absence of such announcement or publication, two Business Days after the effective date of such changed rating.
"Arranger" shall mean J.P. Morgan Securities Inc.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978, as amended from time to time, presently codified as Title 11 of the United States Code.
"Base Rate" shall mean, for any day, a rate per annum equal to the higher of (a) the Federal Funds Rate for such day plus 1/2 of 1% and (b) the Prime Rate for such day. Each change in any interest rate provided for herein based upon the Base Rate resulting from a change in the Base Rate shall take effect at the time of such change in the Base Rate.
Bridge Credit Agreement
----------------------- 7
-3-
"Base Rate Loans" shall mean Loans that bear interest at rates based upon the Base Rate.
"Business Day" shall mean (a) any day on which commercial banks are not authorized or required to close in New York City and (b) if such day relates to a borrowing of, a payment or prepayment of principal of or interest on, a Conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice by the Borrower with respect to any such borrowing, payment, prepayment, Conversion or Interest Period, any day on which dealings in Dollar deposits are carried out in the London interbank market.
"Canadian Plan" shall mean any plan, program, practice, arrangement or policy, whether registered or unregistered, written or unwritten, funded or unfunded, insured or uninsured, that is maintained, administered or contributed to by the Borrower or any of its Subsidiaries (or under which the Borrower or any Subsidiary has or may have any obligation) in respect of employees or former employees in Canada (or their spouses, beneficiaries or dependents), and relating to: pensions, supplemental pensions, retirement or retirement savings, profit sharing or deferred profit sharing, deferred or incentive compensation, bonuses, death benefits, life or disability insurance, medical or dental insurance or benefits or other similar employee benefits.
"Capital Lease Obligations" shall mean, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP (including Statement of Financial Accounting Standards No. 13 of the Financial Accounting Standards Board), and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP (including such Statement No. 13).
"Casualty Event" shall mean, with respect to any Property of any Person, any loss of or damage to, or any condemnation or other taking of, such Property for which such Person or any of its Subsidiaries receives insurance proceeds, or proceeds of a condemnation award or other compensation.
"Chase" shall mean The Chase Manhattan Bank.
"Closing Date" shall mean the date on which this Agreement shall have been executed and delivered by all parties hereto.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.
"Commitment" shall mean, for each Bank, the obligation of such Bank to make Loans on the Effective Date in an aggregate amount up to but not exceeding (a) in the case of a Bank that is a party to this Agreement on the date hereof, the amount set opposite the name of such Bank on Schedule I hereto under the caption "Commitment" or (b) in the case of any other Bank, the aggregate amount of the
Bridge Credit Agreement
----------------------- 8
-4-
Commitments of other Banks acquired by it pursuant to Section 12.06(b) hereof (in each case, as the same may be reduced from time to time pursuant to Section 2.04 hereof or increased or reduced pursuant to said Section 12.06(b)). The original aggregate principal amount of the Commitments is $500,000,000.
"Consolidated Subsidiary" shall mean, for any Person, each Subsidiary of such Person (whether now existing or hereafter created or acquired) the financial statements of which shall be (or should have been) consolidated with the financial statements of such Person in accordance with GAAP.
"Consolidated Net Worth" shall mean, as at any date, the sum, for the Borrower and its Consolidated Subsidiaries (determined on a consolidated basis without duplication in accordance with GAAP), of the following:
(a) the amount of common stock, plus
(b) the amount of any Preferred Stock, plus
(c) the amount of additional paid-in capital and retained earnings
(or, in the case of an additional paid-in capital or retained earnings
deficit, minus the amount of such deficit), plus
(d) equity adjustments from foreign currency translations (or, in the
case of negative adjustments, minus the amount of such adjustments), it
being understood that such adjustments are to be recharacterized in
accordance with FASB Statement No. 130 as accumulated other comprehensive
income (or deficit), minus
(e) the unpaid principal amount of the loan to the Borrower's Employee
Stock Ownership Plan (ESOP), minus
(f) the cost of treasury stock.
"Continue", "Continuation" and "Continued" shall refer to the continuation pursuant to Section 2.09 hereof of a Eurodollar Loan from one Interest Period to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a conversion pursuant to Section 2.09 hereof of one Type of Loans into another Type of Loans, which may be accompanied by the transfer by a Bank (at its sole discretion) of a Loan from one Applicable Lending Office to ...
*End of Preview*
Click the 'Add to Cart' button to download the complete and formatted agreement.