-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ko+qQ1k2kGRhoERCjj5g0Mmo0c3UhkJ8ZAJ48hRCjZp8ly5jBG7rvwV1mK8K3Ehz cNiKhoBO88/r3cE6wW6LQw== 0000950152-01-501456.txt : 20010504 0000950152-01-501456.hdr.sgml : 20010504 ACCESSION NUMBER: 0000950152-01-501456 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20010228 FILED AS OF DATE: 20010503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN GREETINGS CORP CENTRAL INDEX KEY: 0000005133 STANDARD INDUSTRIAL CLASSIFICATION: GREETING CARDS [2771] IRS NUMBER: 340065325 STATE OF INCORPORATION: OH FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 001-13859 FILM NUMBER: 1621362 BUSINESS ADDRESS: STREET 1: ONE AMERICAN ROAD CITY: CLEVELAND STATE: OH ZIP: 44144 BUSINESS PHONE: 2162527300 MAIL ADDRESS: STREET 1: ONE AMERICAN ROAD CITY: CLEVELAND STATE: OH ZIP: 44144 10-K405 1 l85631ae10-k405.txt AMERICAN GREETINGS CORPORATION 10-K405 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Commission File Ended February 28, 2001 Number 1-13859 ----------------- ------- AMERICAN GREETINGS CORPORATION ----------------------------------------------- (Exact name of registrant as specified in Charter) OHIO 34-0065325 - ------------------------------ ------------------ (State of incorporation) (I.R.S. Employer Identification No.) One American Road , Cleveland, Ohio 44144 - -------------------------------------- ---------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (216) 252-7300 ----------------- Securities registered pursuant to Section 12 (b) of the Act: Class A Common Shares, Par Value $1.00 Securities registered pursuant to Section 12 (g) of the Act: Class B Common Shares, Par Value $1.00 Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ] 2 State the aggregate market value of the voting stock held by non-affiliates of the Registrant as of April 23, 2001 - $673,069,222 Number of shares outstanding as of April 23, 2001: CLASS A COMMON - 58,864,613 CLASS B COMMON - 4,628,809 DOCUMENTS INCORPORATED BY REFERENCE Portions of the Proxy Statement to be filed with the Securities and Exchange Commission on May 15, 2001 with respect to the 2001 Annual Meeting of Shareholders called for June 22, 2001, are incorporated by reference into Part III. PART I Item 1. Business American Greetings Corporation and its subsidiaries operate predominantly in a single industry: the design, manufacture and sale of everyday and seasonal greeting cards and other social expression products. Greeting cards, gift wrap, paper party goods, candles, balloons, stationery and giftware are manufactured and /or sold in the United States by American Greetings Corporation, Gibson Greetings, Inc., Plus Mark, Inc., Carlton Cards Retail, Inc., CPS Corporation of Delaware Inc., M&D Balloons, Inc., and Quality Greeting Card Distributing Company; in Canada by Carlton Cards Limited; in the United Kingdom by Carlton Cards Limited, Camden Graphics Group, Hanson White Ltd., Gibson Greetings International Limited, The Ink Group Publishers Ltd. (U.K.) and Carlton Cards Ltd. (Ireland); in France by Carlton Cards (France) SNC; in Mexico by Carlton Mexico, S.A. de C.V. ; in Australia by John Sands (Australia) Ltd. and The Ink Group PTY Ltd.; in New Zealand by John Sands (N.Z.) Ltd. and The Ink Group NZ Ltd.; in South Africa by S.A. Greetings Corporation (PTY) Ltd.; and in Singapore, Hong Kong, China, and Malaysia by Memory Lane SDN BHD (85% owned). AmericanGreetings.com, Inc. (89% owned) markets e-mail greetings, personalized greeting cards and other social expression products through the Corporation's websites www.americangreetings.com, www.egreetings.com, and www.beatgreets.com; co-branded websites and on-line services. AmericanGreetings.com also provides design and verse content which is included in various CD-Rom software products for use on personal computers. AmericanGreetings.com also operates eAgents, an electronic newsletter that consolidates and delivers personalized content from top Internet sites to subscribers. Magnivision, Inc. produces and sells non-prescription reading glasses and eyeware accessories, and Learning Horizons distributes supplemental educational products. Design licensing and character licensing are done by AGC, Inc. and Those Characters From Cleveland, Inc., respectively. AG Industries, Inc. manufactures custom display fixtures for the Corporation's products and products of others. (Although other subsidiaries of American Greetings Corporation exist, they are either inactive, of minor importance or of a holding company nature.) 2 3 Many of the Corporation's products are manufactured at common production facilities and marketed by a common sales force. Marketing and manufacturing functions in the United States and Canada are combined; dual priced cards are produced in the United States and distributed in both countries. Information concerning sales by major product classifications is included in Part II, Item 7. Additionally, information by geographic area is included in Note N to the Consolidated Financial Statements included in Part II, Item 8. The Corporation's products are primarily sold in about 125,000 retail outlets worldwide. In addition, the Corporation licenses its designs to various foreign licensees, so that in total, the Corporation's products and designs are available in more than 70 nations around the world. The greeting card and gift wrap industry is intensely competitive. Competitive factors include quality, design, customer service and terms, which may include payments and other concessions to retail customers under long-term agreements. These agreements are discussed in greater detail below. There are an estimated 2,000 companies in this industry in the United States. The Corporation's principal competitor is Hallmark Cards, Incorporated. On March 9, 2000, the Corporation completed its acquisition of Gibson Greetings, Inc. ("Gibson"). Gibson had been the Corporation's other principal competitor. Based upon its general familiarity with the greeting card and gift wrap industry and limited information as to its competitors, the Corporation believes that it is the second largest company in the industry and the largest publicly owned company in the industry. The Corporation's unit sales of greeting cards increased 14% in 2001, primarily due to the Gibson acquisition, after decreasing 3% in 2000. Excluding acquisitions, 2001 total unit sales would have decreased 4%. Production of the Corporation's products is generally on a level basis throughout the year. Everyday inventories remain relatively constant throughout the year, while seasonal inventories peak in advance of each major holiday season, including Christmas, Valentine's Day, Easter, Mother's Day, Father's Day and Graduation. Payments for seasonal shipments are generally received during the month in which the major holiday occurs, or shortly thereafter. Extended payment terms may also be offered in response to competitive situations with individual customers. The Corporation and many of its competitors sell seasonal greeting cards with the right of return. Beginning in fiscal 2002, the Corporation will implement scan-based trading with certain retailers; see Item 7 for further discussion of this initiative. During the fiscal year, the Corporation experienced no difficulty in obtaining raw materials from suppliers. 3 4 At February 28, 2001, the Corporation employed approximately 11,700 full-time employees and approximately 27,000 part-time employees which, when jointly considered, equate to approximately 25,200 full-time equivalent employees. Approximately 3,000 of the Corporation's hourly plant employees are unionized, of which approximately 2,400 are covered by the following collective bargaining agreements:
Union Plant Location Contract Expiration Date - ----------------------------------- --------------------------- ------------------------ International Brotherhood Bardstown, Kentucky 4/15/03 of Teamsters Corbin, Kentucky 12/01/02 Shelbyville, Kentucky 10/31/01 Kalamazoo, Michigan 4/30/05 Union of Needle Trades, Greeneville, Tennessee 10/20/02 Industrial, & Textile Employees (Plus Mark) Firemen Oilers Berea, Kentucky 3/31/03 Laborers' International Henderson, Kentucky 12/17/04
Other locations with unions are Cleveland, Ohio, the United Kingdom, Mexico, Australia, New Zealand, and South Africa. The Corporation's headquarters and other manufacturing locations are not unionized. Labor relations at each location have generally been satisfactory. The Corporation has a number of patents and registered trademarks which are used in connection with its products. The Corporation's designs and verses are protected by copyright. Although the licensing of copyrighted designs and trademarks produces additional revenue, in the opinion of the Corporation, the Corporation's operations are not dependent upon any individual patent, trademark, copyright or intellectual property license. The collective value of the Corporation's copyrights and trademarks is substantial and the Corporation follows an aggressive policy of protecting its patents, copyrights and trademarks. In fiscal 2001, the Corporation's major channel of distribution continues to be mass retail (which is comprised of mass merchandisers, chain drug stores and supermarkets), where it is the social expression industry leader. Other major channels of distribution include card and gift shops, department stores, military post exchanges, variety stores and combo stores (stores combining food, general merchandise and drug items). Sales to the Corporation's five largest customers, which include mass merchandisers and major drug stores, accounted for approximately 28.7% of net sales in fiscal 2001. Sales to retail customers are made through 27 sales offices in the United States, Canada, the United Kingdom, Australia, New Zealand, France, Mexico, South Africa and Malaysia. Sales to one customer accounted for 10% of net sales in both Fiscal 2000 and 2001. The Corporation has agreements with various customers for the supply of greeting cards and related products. Contracts are separately negotiated to meet competitive situations; therefore, while some aspects of the agreements may be the same or similar, important contractual terms often vary from contract to contract. Under the agreements, customers typically receive allowances, discounts and/or advances in consideration for the Corporation being allowed to supply customers' stores for a stated term and/or specify a minimum sales volume commitment. 4 5 Some of these competitive agreements have been negotiated with customers covering a period following that covered by current agreements and requiring the Corporation to make advances prior to the start of such future period. The Corporation views the use of such agreements as advantageous in developing and maintaining business with retail customers. Although risk is inherent in the granting of advances, payments and credits, the Corporation subjects such customers to its normal credit review. Losses attributable to these agreements have historically not been material. Advances, payments and credits made under these agreements are accounted for as deferred costs. The current and long-term portions of such deferred costs, including future payment commitments, are disclosed in Note H to the Consolidated Financial Statements included in Part II, Item 8. Note H also discusses the amortization policy. The Corporation believes that these agreements represent a common practice within the industry. Since Hallmark Cards, the Corporation's principal competitor, is a non-public company, public disclosure of its practices has been limited. In November 2000, the Corporation announced it would undertake three initiatives in 2002: the reorganization of the core greeting card business, the implementation of scan-based trading with certain retailers, and changes in certain contractual relationships with strategic partners associated with AmericanGreetings.com. See Item 7 for further discussion of these initiatives. The operations of the Corporation, like those of other companies in our industry, are subject to various federal, state and local environmental laws and regulation. These laws and regulations may give rise to claims, uncertainties or possible loss contingencies for future environmental remediation liabilities and costs. The Corporation has implemented various programs designed to protect the environment and comply with applicable environmental laws and regulations. The costs associated with these compliance and remediation efforts have not and are not expected to have a material adverse effect on the financial condition, cash flows, or operating results of the Corporation. 5 6 Item 2. Properties As of February 28, 2001, the Corporation owns or leases approximately 18.1 million square feet of plant, warehouse, store and office space, of which approximately 4.9 million square feet are leased. Space needs in the United States have been met primarily through long-term leases of properties constructed and financed by community development corporations and municipalities. The following table summarizes the principal plants and materially important physical properties of the Corporation:
Expiration Approximate Square Date of Feet Occupied Material Principal Location Owned Leased Leases Activity - ----------------- ------------- -------------- -------------- --------- Cleveland, 1,700,000 International headquarters; Ohio general offices of U.S. Greeting Card Division, Plus Mark, Inc., AG Industries, Inc., Carlton Cards Retail, Inc., Learning Horizons, Inc., AmericanGreetings.com, and AGC, Inc.; creation and design of greeting cards, gift wrap, paper party goods, candles, balloons, stationery and giftware Bardstown, 413,500 Cutting, folding, finishing, and Kentucky packaging of greeting cards Corbin, 1,010,000 Printing of greeting cards, Kentucky gift wrapping and paper party goods and manufacture of other related products Danville, 1,374,000 2001 Distribution of everyday greeting Kentucky cards and related products Harrisburg, 417,000 2006 Warehousing for seasonal Arkansas greeting cards and related products Lafayette, 194,000 Manufacture of envelopes Tennessee for greeting cards and packaging of cards McCrory, 771,000 2004 Order filling and shipping of Arkansas everyday and seasonal products
6 7
Expiration Approximate Square Date of Feet Occupied Material Principal Location Owned Leased Leases Activity - -------- ----- ------ ------ -------- Osceola, 2,800,800 Cutting, folding, finishing and Arkansas packaging of seasonal greeting cards and warehousing; distribution of seasonal products Ripley, 165,000 Seasonal card printing and Tennessee forms Philadelphia, 120,000 2003 Hand finishing of greeting cards Mississippi Kalamazoo, 602,500 Manufacturing and distribution Michigan of party supplies Shelbyville, 250,000 2002 Warehousing for Carlton Kentucky Cards Retail, Inc. and distribution for Learning Horizons, Inc. Forest City, 498,000 415,000 2001 Manufacture of the North Carolina Corporation's display fixtures and other custom display fixtures by AG Industries, Inc. Greeneville, 1,410,000 102,000 Printing and packaging of Tennessee seasonal wrapping items (4 locations) and order filling and shipping for Plus Mark, Inc. Franklin, 2,960,200 Manufacture of gift wrap Tennessee and related items for CPS/Plus Mark, Inc. Henderson, 500,000 Manufacture of gift wrap Kentucky and related items for CPS/Plus Mark, Inc. Cincinnati, 356,000 2001 Warehouse and distribution of Ohio thru gift wrap and related items for 2004 CPS/Plus Mark, Inc. Ft. Lauderdale / 323,000 2001 General offices of Magnivision, Miami Inc.; manufacture, order filling Florida and shipping of non-prescription (4 locations) reading glasses
7 8
Expiration Approximate Square Date of Feet Occupied Material Principal Location Owned Leased Leases Activity - -------- ----- ------ ------ -------- Monteno, 104,500 2001 General offices and manufacture Illinois of balloons and related items (3 locations) for M&D Industries Toronto, 87,000 2003 General offices of Carlton Ontario, Cards (Canada) Limited; Canada (2 locations) Clayton, 208,000 General offices of John Sands Victoria, (Australia) Ltd.; manufacture of Australia greeting cards and related products Alexandria, 40,000 2003 General offices, production Australia and distribution for The Ink Group Auckland, 80,000 General offices of John New Zealand Sands (New Zealand) Ltd. Dewsbury, 417,000 95,500 2001 General offices of England and Carlton Cards (UK) Limited; (5 locations) 2014 manufacture of greeting cards and related products Corby, 85,000 Distribution of greeting cards England and related products for Carlton Cards (UK) Limited Mexico City, 60,000 General offices of Carlton Mexico Mexico, S.A. de C.V. and distribution of greeting cards and related products Paris, 93,000 2001 General offices of Carlton France and Cards (France) SNC; 2003 distribution of greeting cards and related products Roodepoort, 105,500 2001 General offices of South Africa thru S.A. Greetings Corporation; 2005 manufacture and distribution of greeting cards and related products
8 9
Expiration Approximate Square Date of Feet Occupied Material Principal Location Owned Leased Leases Activity - ----------------- --------------------------------- --------------- --------- London, 31,000 2001 General offices of Camden England and Graphics; publishing and (3 locations) 2011 distribution of greeting cards Croydon, 42,000 107,500 2001 General offices of Hanson England thru White; manufacturer and (8 locations) 2011 distributor of greeting cards and related products Stafford Park, 29,000 50,000 2004 General office and warehouse England for Gibson Greetings (2 locations) International Ezakheni, 140,000 33,500 2001 Manufacture and distribution Phoenix, thru of greeting cards and South Africa 2003 related products Kajang 7,000 2001 General office of Memory Selangor Lane Malaysia Malaysia
9 10 Item 3. Legal Proceedings 1. Hallmark Cards, Inc. v. American Greetings Corporation and Americangreetings.com, Inc., Case No. 00-0538-CV-W-1, U.S. District Court, Western District of Missouri. This matter was previously disclosed in Form 10-Q for the period ending August 31, 2000. In this case, which was filed in June 2000, Hallmark alleged infringement of three patents relating to an electronic system for the management, selection and delivery of cards. Hallmark voluntarily dismissed its Complaint on January 19, 2001. 2. In re: Underground Storage Tank Release Report, U.S. EPA Facility ID# TN 1-300153, Tennessee Department of Environment & Conservation (TDEC) v. Plus Mark. This matter was previously disclosed in Form 10-K for the period ending February 29, 2000. There has been no change since the last report. In January 2000, Plus Mark, a wholly owned subsidiary of American Greetings Corporation, received a request from U.S. EPA in connection with the excavation of eight underground storage tanks at Plus Mark's Afton, TN facility to perform initial site characterization for both soil and groundwater. After Plus Mark submitted the initial test results, U.S. EPA concluded that no further action was required regarding soil, but that further site characterization was required for groundwater. U.S. EPA transferred the matter to TDEC for administration. No remedy has been determined, but costs are not expected to be material. 3. In re: Tennessee Dept. of Environment and Conservation (TDEC) v. Cleo. Tennessee State Superfund Site - Carl Wright Site, Henry County, TN This matter was previously disclosed in Form 10-K for the period ending February 29, 2000. There has been no change since the last report. In May 1998, TDEC informed Gibson Greetings, now a wholly owned subsidiary of American Greetings Corporation, that Cleo, a former subsidiary of Gibson Greetings, may be a potentially responsible party for the costs incurred by the State of Tennessee in remediating the Carl Wright Site. TDEC notified Gibson Greetings that storage drums recovered from the Site during clean up bore "Cleo Wrap" labels. Gibson had agreed to indemnify Cleo and its shareholder, CSS, against various environmental liabilities, in connection with the sale of Cleo to CSS. Gibson's share of the estimated clean up cost is not expected to be material. 4. In re: Chemical Recovery Systems Site, Elyria, Ohio. In March 2001, the United States Environmental Protection Agency sent to the Corporation a General Notice of Potential Liability and Request for Information under CERCLA. The Notice stated the U.S. EPA's intent to conduct a remedial investigation/feasibility study at the Chemical Recovery Systems Site in Elyria, Ohio. The Corporation is undertaking a review of its records. The alleged shipments to this Site occurred in 1978. The Corporation's share of estimated clean-up costs is not expected to be material. 10 11 Item 4. Submission of Matters to Vote of Security Holders None Executive Officers of the Registrant - ------------------------------------ The following is a list of the Corporation's executive officers, their ages as of April 30, 2001, their positions and offices, and number of years in executive office:
Years as Name Age Executive Officer Current Position and Office - ---- --- ----------------- --------------------------- Morry Weiss 61 29 Chairman and Chief Executive Officer James C. Spira 58 1 President and Chief Operating Officer Jeffrey M. Weiss 37 3 Executive Vice President Michael B. Birkholm 49 4 Senior Vice President Mary Ann Corrigan-Davis 47 4 Senior Vice President David R. Beittel 53 - Senior Vice President Jon Groetzinger, Jr. 52 13 Senior Vice President, General Counsel and Secretary William R. Mason 56 19 Senior Vice President William S. Meyer 54 13 Senior Vice President, Chief Financial Officer Patricia A. Papesh 53 6 Senior Vice President Patricia L. Ripple 45 5 Senior Vice President Erwin Weiss 52 11 Senior Vice President Zev Weiss 34 - Senior Vice President George A. Wenz 56 3 Senior Vice President Thomas T. Zinn, Sr. 52 3 Senior Vice President Dale A. Cable 53 9 Vice President, Treasurer Joseph B. Cipollone 42 - Vice President, Corporate Controller
Morry Weiss and Erwin Weiss are brothers. Jeffrey M. Weiss and Zev Weiss are the sons of Morry Weiss. The Board of Directors annually elects all executive officers; however, executive officers are subject to removal, with or without cause, at any time. All of the executive officers listed above have served in the capacity shown or similar capacities with the Corporation (or major subsidiary) over the past five years, with the following exceptions: 11 12 James C. Spira was a management consultant with several firms. He has served on the Board of Directors of the Corporation since 1998. He was appointed Vice Chairman of the Corporation in June 2000 and President and Chief Operating Officer of the Corporation in March 2001. Jeffrey M. Weiss was Vice President, Materials Management of the Corporation's U.S. Greeting Card Division from October 1996 until May 1997; Vice President, Product Management of the Corporation's U.S. Greeting Card Division from May 1997 until January 1998; and Senior Vice President from January 1998 until becoming Executive Vice President in March 2000. David R. Beittel was Vice President, Creative Visual Design of the Corporation's Carlton Cards Retail, Inc. unit from August 1993 until April 1995; Executive Director, Product Management of the Corporation from April 1995 until January 1997; and Vice President, Creative of the Corporation from January 1997 until becoming Senior Vice President in April 2001. Michael B. Birkholm was Plant Manager at Osceola, Arkansas from September 1992 until June 1994; and Vice President, Manufacturing from June 1994 until becoming Senior Vice President in March 1998. Joseph B. Cipollone was Director, Corporate Financial Planning of the Corporation from July 1994 until December 1997; and Executive Director, International Finance of the Corporation from December 1997 until becoming Vice President and Corporate Controller in April 2001. Mary Ann Corrigan-Davis was President of Carlton Cards Retail, Inc. from December 1992 until January 1996, and Group Managing Director of the John Sands Group from January 1996 until becoming Senior Vice President in May 1997. Patricia L. Ripple was Director, Tax and Financial Reporting of the Corporation from November 1991 until April 1993; Executive Director, Tax and Financial Reporting of the Corporation from April 1993 until September 1996; and Vice President and Corporate Controller from September 1996 until becoming Senior Vice President in March 2001. Zev Weiss was Regional Sales Director for the Corporation's Carlton Cards Retail, Inc., unit from July 1994 to May 1995; Regional Sales Manager for the Corporation's U.S. Greeting Card Division from May 1995 to May 1997; Executive Director of National Accounts for the Corporation's U.S. Greeting Card Division from May 1997 until March 2000; and Vice President, Strategic Business Units from March 2000 until becoming Senior Vice President in March 2001. George A. Wenz was Vice President, National Accounts from October 1984 until becoming Senior Vice President in June 1997. Thomas T. Zinn, Sr. was a Principal with Ernst & Young LLP before joining the Corporation January 1995 as Vice President, Information Services. He became Senior Vice President in March 1998. 12 13 PART II Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters (a) Market Information - ---------------------- The Corporation's Class A Common Shares are listed on the New York Stock Exchange under the symbol AM. The high and low share prices, as reported in the New York Stock Exchange listing, for the years ended February 28, 2001 and February 29, 2000:
2001 2000 -------------------------------------- -------------------------------------- High Low High Low ---------------- ----------------- ---------------- ----------------- 1st Quarter.................. $ 19-9/16 $ 15-5/16 $ 28-13/16 $ 22-5/16 2nd Quarter................. 24-1/16 16-7/8 32-3/8 27-3/16 3rd Quarter.................. 20.13 8.94 28-1/2 23-1/16 4th Quarter.................. 13.91 8.19 25-11/16 17-1/4
National City Bank, Cleveland, Ohio, is the Corporation's registrar and transfer agent. There is no public market for the Class B Common Shares of the Corporation. Pursuant to the Corporation's Amended Articles of Incorporation, a holder of Class B Common Shares may not transfer such Class B Common Shares (except to permitted transferees, a group that generally includes members of the holder's extended family, family trusts and charities) unless such holder first offers such shares to the Corporation for purchase at the most recent closing price for the Corporation's Class A Common Shares. If the Corporation does not purchase such Class B Common Shares, the holder must convert such shares, on a share for share basis, into Class A Common Shares prior to any transfer. (b) Shareholders ---------------- At February 28, 2001, there were approximately 28,800 holders of Class A Common Shares and 202 holders of Class B Common Shares of record and individual participants in security position listings. (c) Cash Dividends - -------------------
Dividends per share declared in 2001 2000 ------------------- ---------- ---------- 2nd Quarter (paid September 8, 2000 and September 10, 1999) $.21 $ .20 3rd Quarter (paid December 8, 2000 and December 10, 1999) .21 .20 3rd Quarter (paid March 9, 2001) .10 - 4th Quarter (paid March 10, 2000) - .20 4th Quarter (to be paid June 8, 2001 and paid June 10, 2000) .10 .20 ---------- ---------- $.62 $ .80
13 14 Item 6. Selected Financial Data Years ended February 28 or 29 Thousands of dollars except per share amounts
Summary of Operations 2001 2000 1999 1998 1997 - --------------------- -------------- ------------- ------------- ------------- ------------- Net sales ............................................. $ 2,518,814 $ 2,175,236 $ 2,205,706 $ 2,198,765 $ 2,161,089 Gross profit .......................................... 1,519,543 1,365,889 1,448,626 1,408,077 1,355,965 Non-recurring charge (gain) ........................... -- 38,873 13,925 (22,125) -- Interest expense ...................................... 55,387 34,255 29,326 22,992 30,749 Income (loss) before cumulative effect of accounting change ........................................... (92,673) 89,999 180,222 190,084 167,095 Cumulative effect of accounting change, net of tax .... (21,141) -- -- -- -- Net (loss) income ..................................... (113,814) 89,999 180,222 190,084 167,095 Earnings (loss) per share: Before cumulative effect of accounting change .... (1.46) 1.37 2.56 2.58 2.23 Cumulative effect of accounting change, net of tax (0.33) -- -- -- -- Earnings (loss) per share ........................ (1.79) 1.37 2.56 2.58 2.23 Earnings (loss) per share - assuming dilution .... (1.79) 1.37 2.53 2.55 2.22 Cash dividends declared per share* .................... .62 .80 .94 .71 .67 Fiscal year end market price per share ................ 13.06 17.25 23.69 45.63 31.00 Average number of shares outstanding .................. 63,646,405 65,591,798 70,345,980 73,708,100 74,818,960 Financial Position - ------------------ Accounts receivable ................................... $ 387,534 $ 430,825 $ 390,740 $ 373,594 $ 375,324 Inventories ........................................... 365,221 249,433 251,289 271,205 303,611 Working capital ....................................... 94,455 518,196 728,144 506,029 562,148 Total assets .......................................... 2,712,074 2,517,983 2,419,328 2,161,464 2,135,120 Property, plant and equipment additions ............... 74,382 50,753 60,950 67,898 92,895 Long-term debt ........................................ 380,124 442,102 463,246 148,800 219,639 Shareholders' equity .................................. 1,047,190 1,252,411 1,346,611 1,345,217 1,361,655 Shareholders' equity per share ........................ 16.49 19.41 19.49 18.90 18.16 Net return on average shareholders' equity before cumulative effect of accounting changes ... (8.1)% 6.9% 13.4% 14.0% 12.9% Return on net sales before income taxes and cumulative effect of accounting changes .......... 3.9% 6.5% 12.8% 13.3% 11.8%
* See quarterly results of operations for detailed table. 14 15 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. OVERVIEW During 2001, the Corporation experienced declines in net income due to market pressures and two special charges. Market pressures included unit decline in the United States everyday card market as a result of continued pressure to reduce retailer inventories, increased competition from lower-priced cards and general retail sales weakness. In addition, charges related to an equity investment write-down and potential tax assessments were recorded. The Corporation, as announced during the third quarter, has responded by initiating a restructure strategy focusing on process improvements that is expected to improve efficiency and reduce costs by rationalizing brands, products and facilities, and resetting the organizational structure. Details of the restructuring effort were announced in March 2001, and the Corporation expects to record a restructure charge during Fiscal 2002 as part of this initiative. The Corporation completed the acquisition of Gibson Greetings Inc. (Gibson), the No. 3 greeting card company in the industry, early in 2001. The Corporation focused its efforts throughout 2001 on integrating that business which is substantially complete as of February 2001. The Corporation has begun to realize significant operating synergies and cost reductions from the Gibson transaction which will be accretive to earnings in 2002. During the third quarter, the Corporation completed the acquisition of CPS Corporation (CPS), a leading supplier of gift wrap and decorative packaging, headquartered in Franklin, Tennessee. This acquisition expands the Corporation's seasonal boxed card, gift wrap, and decorative packaging product offering, adds new customers and channels of distribution, and includes two state-of-the-art manufacturing and distribution facilities in Tennessee and Kentucky. CPS became part of Plus Mark, the promotional giftwrap and Christmas boxed card unit of the Corporation. CONSOLIDATED RESULTS OF OPERATIONS REVENUE Net sales rose 15.8% to a record $2.5 billion in 2001 driven primarily by the acquisition of the Gibson and CPS business units, which contributed $263 million and $89 million, respectively. Excluding acquisitions, net sales decreased 1.0% compared to 2000 due primarily to soft everyday card sales in the U.S. market and weakening of certain foreign currencies against the U. S. dollar. Increased sales of promotional gift wrap, calendars and party goods in the U.S. as well as stronger sales in Canada helped offset the U.S. everyday greeting card performance. In 2000, net sales decreased 1.4% compared to 1999 primarily due to initiatives to lower retailers' inventories. Net sales of everyday cards increased 8.9% in 2001 due primarily to the favorable impact of the Gibson acquisition. Excluding Gibson, everyday card net sales decreased 4.9% principally due to softness in the United States and Australasia greeting card markets. The decrease in 2000 reflects lower sales in the United States as a result of initiatives to lower retailers' inventory partially offset by strong sales gains in the United Kingdom primarily due to increased market share. Unit sales of everyday greeting cards increased approximately 13% compared to 2000. However, excluding the Gibson acquisition, unit sales of everyday greeting cards decreased approximately 2%. Net seasonal card sales improved 17% during 2001 as a result of the Gibson acquisition but decreased 3.5% compared to 2000 when excluding Gibson. The Corporation continued to implement initiatives to improve sell-through of seasonal card sales; however, these efforts were 15 16 hampered by a slowing retail environment. In 2000, net seasonal card sales decreased 2.6% as the Corporation reduced seasonal card shipments to improve seasonal sales productivity. Primarily fueled by the CPS acquisition, sales of non-card products increased 24% in 2001. Significant sales increases were also realized in both calendars and party goods. Sales of calendars increased more than 150% in 2001 due to increased distribution while increased core growth drove party goods sales to an increase of 13% over 2000. Sales of non-card products increased in 2000 due to the acquisition of Contempo Colours, Inc. and to higher seasonal promotional gift wrap sales. The contribution of each major product category as a percent of net sales for the past three years is:
2001 2000 1999 ------------ ----------- ------------ Everyday Greeting Cards 42% 45% 48% Seasonal Greeting Cards 20% 20% 20% Gift Wrapping and Wrap Accessories 16% 14% 14% All Other Products 22% 21% 18%
The All Other Products classification includes giftware, party goods, non-prescription reading glasses, candles, balloons, calendars, custom display fixtures, stationery, ornaments, educational products and stickers. EXPENSES AND PROFIT MARGINS Margins continued to decrease in 2001 due primarily to a changing product mix. While acquisitions have increased sales to record levels, these business units typically have higher cost of product than the core greeting card business. Additionally, the Corporation's investment and losses in its Internet subsidiary, AmericanGreetings.com, have unfavorably impacted margins. Material, labor and other production costs were 39.7% of net sales, up from 37.2% in 2000 and 34.3% in 1999. The key driver of this increase is a sales shift to increased sales of higher cost product due primarily to the CPS acquisition and to lower sales of higher margin everyday greeting cards. The increase in 2000 compared to 1999 reflects increased sales of lower margin products, $7.8 million of unfavorable manufacturing variances and a $7.7 million write-down of inventory related to the integration of the Canadian and domestic operations. Selling, distribution and marketing expenses were 42.4% of net sales in 2001, flat to prior year but up from 40.5% in 1999. In 2001, increased order fulfillment costs had an unfavorable impact of 60 basis points which was offset by lower expenditures for national advertising of $10 million. The increase in 2000 over 1999 primarily reflects expenses associated with Internet agreements for AmericanGreetings.com, Inc. and higher freight costs relating to strong seasonal promotional gift wrap sales. Competitive costs in 2001 increased only 2.8% compared to 2000. Deferred costs and the Corporation's method of accounting for them are described in Note H to the Consolidated Financial Statements. Administrative and general expenses increased $53.1 million in 2001. Almost all of the increase is related to the acquired companies which reflected spending levels prior to integration savings. Administrative and general expenses decreased $1.1 million in 2000 from 1999 due to reduced employee benefit costs partially offset by additional costs associated with AmericanGreetings.com, Inc. 16 17 Other expense - net was $16.8 million in 2001, $3.7 million in 2000 and $1.3 million in 1999. Included in other expense - net for 2001, is a $32.5 million non-cash charge recorded in the fourth quarter relating to the write down of the Corporation's 19.6% investment in Egreetings Network, Inc. (Egreetings) shares acquired as part of the Gibson transaction. Partially offsetting this charge is an $8.4 million gain on the sale of a Canadian building. Also favorably impacting 2001 are savings of approximately $8.6 million of Year 2000 remediation costs incurred in the prior year. Interest expense amounted to $55.4 million in 2001, compared to $34.3 million in 2000 and $29.3 million in 1999. Higher borrowing levels to fund the Corporation's acquisition of Gibson and CPS, as well as the common stock repurchase program were the primary drivers of the increase in interest expense. These initiatives were funded by free cash flow and additional borrowings in 2001 and 2000. As a result, debt less cash increased to $707.3 million at the end of 2001 compared to $490.8 million at the end of 2000. During the fourth quarter of 2001, the Corporation recorded a charge of approximately $143 million for potential tax exposure for the fiscal years ended 1992 through 1999 relating to the Corporation's corporate-owned life insurance programs (COLI). This exposure was previously discussed in periodic filings with the Securities and Exchange Commission and represents the effect of proposed adjustments by the Internal Revenue Service (IRS) for the disallowance of certain deductions related to these insurance programs. In February 2001, a federal tax decision unfavorable to another corporation with COLI issues was published. The Corporation plans to vigorously contest the proposed adjustments or any subsequent assessments and feels it can distinguish certain of its COLI plans from those addressed in previous litigation. Additionally, the Corporation recorded the write-down of its investment in Egreetings shares and established a valuation allowance equal to the full tax benefit of the write-down. The 2000 and 1999 effective tax rates were 36.0%. The rate for 2000 includes a 2.1 percentage point benefit for utilization of a foreign net operating loss carryforward while the rate for 1999 reflected tax benefits of the corporate-owned life insurance. Those benefits were reduced due to the phase out of the Federal income tax deduction for interest on loans associated with these policies. The deduction for this interest expense was entirely eliminated as of January 1, 1999. See Note O to the Consolidated Financial Statements for details of the differences between taxes at the Federal statutory rate and actual tax expense. In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB 101), which among other guidance, clarifies the Staff's views on various revenue recognition and reporting matters. As a result, effective March 1, 2000, the Corporation adopted a change in its method of accounting for certain shipments of seasonal product, which carry implied acceptance provisions. Under the new accounting method adopted retroactive to March 1, 2000, the Corporation now recognizes revenue on these seasonal shipments at the approximate date the merchandise is received by the customer and not upon shipment from the distribution facility. Customer receipt is a more preferable method of recording revenue due to the large volumes of seasonal product shipment activity and the time required to achieve customer requested delivery dates. The cumulative effect of the change on prior years resulted in a one-time non-cash reduction to the Corporation's earnings of $21.1 million (net of tax of $12.6 million) or approximately $0.33 per share. Had this change been adopted effective March 1, 1999, fiscal 2000 net sales and earnings before the cumulative effect of this accounting change would not have been materially impacted. 17 18 RESTRUCTURING ACTIVITIES AND SPECIAL CHARGES Fiscal 2000 - Fourth Quarter During the fourth quarter, the Corporation recorded a $6.1 million ($4.8 million net of tax, or earnings per share of $0.08) restructure charge related to various foreign operations. The primary component of this charge was for the rationalization of various warehouse, distribution and manufacturing facilities in the United Kingdom in order to increase operating efficiency and lower fixed expenses. Additional initiatives include, to a lesser extent, the integration of Mexican manufacturing in the United States and the realignment of various business functions in Australia. The restructure charge included $5.2 million for costs of severing employees, $0.6 million for lease exit costs, $0.3 million for the write off of assets no longer in use and other restructure costs. In total, approximately 336 positions will be eliminated comprised of 304 hourly and 32 salaried employees. As of February, 2001, 114 hourly and 33 salaried employees have been severed. All activities are expected to be completed by the end of the first quarter in fiscal 2002 and the Corporation anticipates annual cost savings to be approximately $4.0 million. Fiscal 2000 - Second Quarter In connection with the Corporation's initiative to streamline its international operations, the Corporation recorded a $40.4 million ($24.2 million net of tax, or earnings per share of $0.36) special charge during the second quarter of Fiscal 2000 relating primarily to the consolidation of the Canadian manufacturing and distribution in the United States. Included in this special charge is a $32.7 million restructure charge primarily for exit costs associated with the closure of certain Canadian facilities and to a lesser extent, costs to exit certain minor United Kingdom businesses. The remaining $7.7 million of the special charge was recorded in material, labor and other production costs for the write-down of Canadian inventory to net realizable value. The restructure charge of $32.7 million includes $25.8 million of severance, pension and personnel related items, $4.6 million of facility shut-down costs, $1.5 million of lease exit costs and $0.8 million related to other restructure costs. As of February 2001, 712 Canadian employees have been terminated as a result of the Corporation's realignment of its manufacturing and distribution operations. All initiatives associated with the Canadian restructuring have been substantially completed and the Corporation anticipates annual aggregate cost savings to be approximately $12 million. The largest remaining restructuring activity relates to the Canadian Division pension plans. The Corporation has taken the necessary actions to settle the pension liabilities, and pending the appropriate Canadian regulatory approval, the remaining pension plan assets will be distributed to satisfy those obligations. This is expected to be completed by December 2001. Fiscal 1999 During the third quarter of fiscal 1999, the Corporation recorded a restructure charge of $13.9 million ($8.3 million net of tax, or earnings per share of $0.12) which reflected management's efforts to optimize the Corporation's cost structure and to provide for operational streamlining initiatives. This restructure charge consisted of approximately $8.6 million of personnel-related charges associated with the termination of 228 employees; $4.6 million of exit costs associated with discontinuing the kiosk business; $0.4 million of costs associated with carrying vacated office space until lease expiration or sublease; and approximately $0.3 million of other restructure costs. All initiatives associated with this restructuring have been substantially completed at February 29, 2000. 18 19 The following table summarizes the provisions, payments and remaining reserves associated with the restructure charges recorded in 1999 through 2001.
Facility Kiosk Lease Termination Shut-Down Exit Exit Other Benefits Costs Costs Costs Costs Total ---------------- -------------- ----------- ---------- -------- ------------ (Thousands of dollars) Provision in 1999 $8,644 $4,618 $663 $13,925 Cash expenditures (5,019) (5,019) Non-cash charges (3,362) (3,362) ---------------- ----------- -------- ------------ Balance 2/28/99 3,625 1,256 663 5,544 Provision in 2000 31,018 $4,634 $2,108 1,113 38,873 Activity relating - ----------------- to 1999 Provision: - ------------------ Cash expenditures (3,645) (620) (469) (4,734) Non-cash charges (588) (588) Change in estimate 162 (162) Activity relating to - -------------------- 2000 Provision: - --------------- Cash expenditures (1,646) (454) (930) (3,030) Non-cash charges (4,358) (99) (162) (519) (5,138) ---------------- -------------- ----------- ---------- -------- ------------ Balance 2/29/00 25,156 4,081 48 1,016 626 30,927 Activity relating to - -------------------- 1999 Provision: - --------------- Cash expenditures (222) (222) Activity relating to - -------------------- 2000 Provision: - --------------- Cash expenditures (19,152) (514) (13) (12) (22) (19,713) Non-cash charges (2,334) (342) (2,676) Change in estimate 45 (35) (10) Impact of foreign currency exchange rate changes (419) (85) (70) (17) (591) ---------------- -------------- ----------- ---------- -------- ------------ Balance 2/28/01 $5,408 $1,148 $-- $934 $235 $7,725 ================ ============== =========== ========== ======== ============
Included in accounts payable and accrued liabilities at February 28, 2001 is $7.7 million related to severance and other exit costs for those actions not completed. The Corporation believes the remaining accrued restructure liability is adequate for its remaining cash and non-cash obligations. 19 20 NET INCOME AND EARNINGS PER SHARE The net loss of $113.8 million or $1.79 per share for 2001 includes non-cash charges of $143 million or $2.26 per share for disputed deductions with the IRS relating to the Corporation's COLI programs and $32.5 million or $0.51 per share for the write-down of the Corporation's 19.6% investment in Egreetings shares. Also included is a charge of $21.1 million or $0.33 per share for the cumulative effect of accounting changes relating to the recording of certain seasonal shipments. Excluding these charges, adjusted net income for 2001 was $83.5 million or $1.31 per share. This compares to net income, excluding the impact of non-recurring items for restructuring efforts, of $119 million or $1.81 per share in 2000 and $188.6 million or $2.68 per share in 1999. Assuming dilution, earnings per share excluding the non-recurring items discussed above were $1.31 in 2001, $1.81 in 2000, $2.65 in 1999. SEGMENT INFORMATION The Corporation is organized and managed according to a number of factors, including product categories, geographic locations and channels of distribution. The Social Expression Products segment primarily designs, manufactures and sells greeting cards and other products through various channels of distribution with mass retailers as the primary channel and is managed by geographic location. As permitted under Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information," certain operating divisions have been aggregated into the Social Expression Products segment. These operating divisions have similar economic characteristics, products, production processes, types of customers and distribution methods. AmericanGreetings.com is a web-based provider of greetings and other social communication content to consumers and web-based businesses. SOCIAL EXPRESSION PRODUCTS SEGMENT Net sales in 2001 increased 14.2% from the prior year due primarily to the acquisition of Gibson, which contributed $263 million of net sales. Excluding the impact of the Gibson acquisition, net sales decreased 1.7%. The primary driver of this sales decline was lower sales of everyday greeting card product in the United States partially offset by strong accessory product sales in the United States, primarily party products, and increased sales in Canada. Net sales in 2000 decreased 5.2% due primarily to reduced everyday card shipments in the United States partially offset by significant growth in the UK market. Total segment greeting card unit sales increased approximately 14% in 2001, however excluding Gibson unit sales declined approximately 4%. Total unit sales of all greeting cards decreased approximately 3% in 2000. Segment earnings, net of intersegment items, decreased 12.6% in 2001 reflecting the earnings impact of lower sales in the United States of high margin everyday greeting card product. Partially offsetting this decrease was improved performance from the Canadian Division due primarily to benefits relating to the integration of manufacturing in the United States. Segment earnings, net of intersegment items, decreased 28.1% in 2000 reflecting the decrease in high margin everyday card sales in the United States partially offset by the strength of the UK market. 20 21 AMERICANGREETINGS.COM, INC. SEGMENT Net sales improved 70% in 2001 driven by increased advertising revenue resulting from new advertising sales initiatives and higher traffic. AmericanGreetings.com more than doubled its website traffic in 2001 as a result of moving to a new business model as a relationship service provider which includes providing free electronic greetings. Net sales almost doubled in 2000 due to significant increases in subscription revenue and to increased advertising revenue resulting from new online distribution agreements with key Internet service providers. The segment loss for 2001 reflects increased partner share costs associated with various Internet distribution agreements and the Corporation's continued investment in technology and content for expanded Internet services and increased volume growth. The segment loss in 2000 reflects the increased costs associated with the amortization of payments relating to various Internet distribution agreements and increased advertising expenditures. LIQUIDITY AND CAPITAL RESOURCES Cash flow before acquisitions, divestitures and financing in 2001 was $91.8 million and remained relatively strong compared to $96.8 million in 2000. In 1999, cash flow before acquisitions, divestitures and financing was $179.3 million. Cash flow provided by operating activities for 2001 was $108.9 million, a decrease of $58.7 million from 2000, due primarily to lower net income. Accounts receivable, net of the effect of acquisitions, generated $29.2 million of cash in 2001, compared to a use of $35.9 million in 2000 and $10.5 million in 1999. The primary components of the accounts receivable performance in 2001 were increased cash collections and the impact of the shift in the recognition of Mother's Day shipments from the fourth quarter to the first quarter which decreased accounts receivable by $44.4 million. Net accounts receivable as a percent of net sales decreased to 15.4% in 2001 compared to 19.8% in 2000 and 17.7% in 1999. Inventories as a percent of material, labor and other production costs increased to 36.5% after improving to 30.8% in 2000 from 33.2% in 1999. Inventories, net of the effect of acquisitions, used $46.6 million of cash in 2001 compared to a source of $11.7 million and $17.8 million in 2000 and 1999, respectively. Key components of this increase are increased inventory levels attributable to everyday accessory products of $18.6 million and an increase of $13.9 million of seasonal inventory, primarily Mother's Day, that will now ship in Fiscal 2002. In 2000, the Corporation realized a $19.3 million inventory reduction in both Canada and the United States relating to the integration of Canadian manufacturing and distribution in the United States and to other production efficiencies. In 2001, Deferred costs - net, representing payments under agreements with certain retailers (net of related amortization), reflected amortization in excess of payments of $4.1 million compared to net cash payments of $5.6 million in 2000 and $65.6 million in 1999. Payments are made in connection with both new and existing agreements and reflect the fluctuations resulting from various contract payment and renewal dates. However, the deferred costs which result from the payments are less volatile as they are amortized over the effective period of the agreement. Total commitments under the agreements are capitalized as deferred costs when the agreements are consummated, and any future payment commitments are recorded as liabilities at that time. Future payment commitments 21 22 under existing agreements at the end of 2001 were $230.8 million with $119.8 million due within the next year. See Note H to the Consolidated Financial Statements for further discussion of deferred costs related to certain customer agreements. Accounts payable and other liabilities increased $87.9 million compared to a decrease of $24.9 million in 2000. In 1999, accounts payable and other liabilities increased $13.8 million. The activity in 2001 reflects an increase in income taxes payable of $143 million for the recording of the COLI tax exposure partially offset by $19.7 million of cash payments associated with the Corporation's restructuring activities and approximately $28 million of cash payments for integration costs associated with acquisitions. The change in 2000 compared to 1999 reflects lower income tax accruals and employee profit sharing liability. Investing activities included $139 million of cash (net of $10.1 million of acquired cash) in 2001 to purchase Gibson, in addition to the $30 million escrow payment made in 2000. Additionally, 2001 reflects the $31 million cash portion of the CPS acquisition made during the second quarter. In 2000, investing activities included $35.5 million for the acquisition of Contempo Colours, Inc. and the Gibson escrow payment. Capital expenditures were $74.4 million in 2001 up from $50.8 million in 2000 and $61.0 million in 1999. The increase was largely due to approximately $14 million of investments in facilities and manufacturing equipment in the United Kingdom in order to increase operating efficiency and enable facility rationalization. In addition, 2001 capital expenditures included $7.3 million for the expansion of the Kalamazoo facility (party goods) and $4.5 million related to the Gibson acquisition. The decrease in 2000 reflects lower capitalized system projects as the Corporation focused its efforts on Year 2000 remediation. Capital expenditures are expected to be approximately $50 million in 2002. Investing activities other than capital expenditures and acquisitions provided $56.4 million of cash in 2001 compared to a use of $20.9 million in 2000. The cash provided in 2001 reflects $20.3 million of cash proceeds from the sale of a Canadian building and the settlement of a $15 million supply agreement loan. The use of cash in 2000 reflects a supply agreement loan to a customer and lower cash distributions received from the Corporation's investment in corporate owned life insurance. During 2001, the Corporation repurchased 1.0 million Class A shares at an average price of $20.56 per share or $21 million bringing the total shares purchased under this program to 4.5 million at an average cost of $27.70. Additionally, the Corporation repurchased 1.2 million shares, relating to the acquisition of CPS, at an average price of $20.36 per share or $24.4 million. In total 2.2 million shares were repurchased during 2001 at an average price of $20.46 or approximately $45 million. During 2000, a total of 4.6 million shares were repurchased at an average price of $28.25 per share or approximately $130 million. Net cash provided from financing activities was $78.8 million primarily as a result of an increase in short-term borrowings to fund the Gibson and CPS acquisitions; however, the Corporation will continue to evaluate long term financing options. A total of $52.7 million in dividends was paid during 2001 compared to $51.2 million in 2000. The Corporation has reduced its quarterly dividend from 21 cents per share to 10 cents per share, beginning with the dividend payable in March 2001. In 2000, net cash used in financing activities was $114.4 million primarily related to the Corporation's stock repurchase program and dividend payments. Debt as a percent of total capitalization in 2001 increased to 42% compared to 30.6% in 2000. 22 23 The Corporation's operating cash flow and existing credit facilities are expected to meet currently anticipated funding requirements. The seasonal nature of the business results in peak working capital requirements which are financed through short term borrowings. See Note I to the Consolidated Financial Statements for further discussion of the Corporation's credit facilities. MARKET RISK The Corporation's market risk is impacted from changes in interest rates and foreign currency exchange rates. The Corporation manages interest rate exposure through a mix of fixed and floating rate debt. A portion of the Corporation's debt has a fixed rate, limiting its exposure to fluctuations in interest rates. To date, risks associated with interest rate movements have not been significant and are not expected to be so in the near term. Approximately 17% of the Corporation's 2001 revenues were generated from operations outside the United States. Operations in Australasia, Canada, France, Malaysia, Mexico, South Africa, and the United Kingdom, are denominated in currencies other than U.S. dollars. Each of these operations conducts substantially all of its business in its local currency and is not subject to material operational risks associated with fluctuations in exchange rates. While intercompany balances with the parent company are denominated in U.S. dollars, the Corporation's multi-currency credit facility provides the foreign operations the ability to satisfy these balances and reduce exchange risk. Additionally, the Corporation's net income was not materially impacted by the translation of the foreign operations' currencies into U.S. dollars. Exposure to exchange rate fluctuations historically have not been significant, however, no assurance can be given that future results will not be adversely affected by significant changes in foreign currency exchange rates. NEW ACCOUNTING PRONOUNCEMENTS The Financial Accounting Standards Board (FASB) has issued Statement of Financial Accounting Standards (SFAS) 133, "Accounting for Derivative Instruments and Hedging Activities." This statement, along with its amendments SFAS No. 137 and SFAS No. 138, will become effective for the Corporation for 2002. The Corporation has evaluated the effects of these Statements on its accounting and reporting policies, and the adoption of the Statements will not have a material impact on the Corporation's consolidated financial statements. FACTORS THAT MAY AFFECT FUTURE RESULTS In November 2000, the Corporation announced it would undertake a review of its operations focusing on process improvements that is expected to improve efficiency and reduce costs. Additionally, the Corporation will undertake two other initiatives, all of which will take place in 2002 and result in the following one-time pre-tax charges: - - The reorganization of the core greeting card business will result in a pre-tax charge of approximately $200 million to $220 million. The implementation of the new business structure will result in expected ongoing pre-tax cost savings of about $90 million beginning in 2003. Included in the restructuring are a brand rationalization process, product line size reduction program, the consolidation of six to nine facilities, and a headcount reduction of approximately 1,500 associates, or about 13% of the full-time workforce. The Corporation expects the reorganization to begin in the first quarter of 2002 and conclude by the end of 2002. - - The implementation of scan-based trading with certain retailers will result in a pre-tax charge of $80 million to $90 million. This new initiative is part of the Corporation's new business model and should ultimately result in a reduction of working capital, maximize retail productivity and throughput, reduce costs and continue to enhance retailer relationships. 23 24 - - Anticipated in 2002, positive changes in certain contractual relationships with strategic partners associated with the Corporation's Internet business will result in a pre-tax, non-cash charge of $18 million. These forthcoming contractual changes, coupled with recent acquisitions and organic growth should allow AmericanGreetings.com to achieve its goal of reaching profitability during the fourth calendar quarter of 2001. The Corporation expects the pre-tax cost of these three initiatives to be about $300 million to $330 million. Combined, these efforts are expected to use about $110 million to $120 million in after-tax cash, with the majority of the cash usage coming in 2002. The Corporation has maintained a strong customer base in a wide variety of channels of distribution through its investment in deferred costs related to agreements with certain retailers and other competitive arrangements. The agreements have lessened the impact to the Corporation from loss of business due to the retailer consolidations which continued, to a lesser extent, in 2000. These agreements have been a strategic element of the Corporation's growth and the financial condition of the retail customers is continually evaluated and monitored to reduce risk. The statements contained in this document that are not historical facts are forward-looking statements. Actual results may differ materially from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties, including but not limited to retail bankruptcies and consolidations, successful integration of acquisitions, a weak retail environment, consumer acceptance of products as priced and marketed, the impact of technology on core product sales and competitive terms of sale offered to customers. Risks pertaining specifically to the Corporation's electronic marketing business include the ability of AmericanGreetings.com to attract strategic partners as investors, the viability of online advertising as a revenue generator, and the public's acceptance of online greetings and other social expression products. 24 25 Item 7A. Quantitative and Qualitative Disclosures About Market Risk DERIVATIVE FINANCIAL INSTRUMENTS - The Corporation does not hold or issue derivative financial instruments for trading purposes. INTEREST RATE EXPOSURE - Based on the Corporation's overall interest rate exposure as of and during the year ended February 28, 2001, a hypothetical 10% movement in interest rates would not materially affect the Corporation's results of operations. FOREIGN CURRENCY EXPOSURE - The Corporation's international operations expose it to translation risk when the local currency financial statements are translated into U.S. dollars. As currency exchange rates fluctuate, translation of the statements of income of international subsidiaries to U.S. dollars could affect comparability of results between years. The earnings of the Corporation were not materially affected by exchange rate fluctuations for the years ended February 28 or 29, 2001, 2000, or 1999. At February 28, 2001, a hypothetical 10% movement in foreign exchange rates would not have a material effect on the Corporation's results of operations. See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations", for a discussion of the Corporation's exposure to foreign currency translation risk. 25 26 Item 8. Financial Statements and Supplementary Data CONSOLIDATED STATEMENT OF OPERATIONS Years ended February 28 or 29, 2001, 2000 and 1999 Thousands of dollars except per share amounts
2001 2000 1999 ------------ ------------ ------------ Net sales $ 2,518,814 $ 2,175,236 $ 2,205,706 Costs and expenses: Material, labor and other production costs 999,271 809,347 757,080 Selling, distribution and marketing 1,068,543 921,392 894,323 Administrative and general 280,202 227,075 228,183 Non-recurring items -- 38,873 13,925 Interest 55,387 34,255 29,326 Other expense - net 16,778 3,670 1,272 ------------ ------------ ------------ 2,420,181 2,034,612 1,924,109 ------------ ------------ ------------ Income before income taxes and cumulative effect of accounting change 98,633 140,624 281,597 Income taxes 191,306 50,625 101,375 ------------ ------------ ------------ (Loss) income before cumulative effect of accounting change (92,673) 89,999 180,222 Cumulative effect of accounting change, net of tax (21,141) -- -- ------------ ------------ ------------ Net (loss) income $ (113,814) $ 89,999 $ 180,222 ============ ============ ============ (Loss) earnings per share: Before cumulative effect of accounting change $ (1.46) $ 1.37 $ 2.56 Cumulative effect of accounting change, net of tax (.33) -- -- ------------ ------------ ------------ (Loss) earnings per share $ (1.79) $ 1.37 $ 2.56 ============ ============ ============ (Loss) earnings per share - assuming dilution $ (1.79) $ 1.37 $ 2.53 ============ ============ ============ Average number of shares outstanding 63,646,405 65,591,798 70,345,980
See notes to consolidated financial statements. 26 27 CONSOLIDATED STATEMENT OF FINANCIAL POSITION February 28, 2001 and February 29, 2000 Thousands of dollars
ASSETS 2001 2000 ------------ ------------ CURRENT ASSETS Cash and cash equivalents $ 51,691 $ 61,010 Trade accounts receivable, less allowances of $184,799 and $136,037 respectively (principally for sales returns) 387,534 430,825 Inventories 365,221 249,433 Deferred and refundable income taxes 190,241 99,709 Prepaid expenses and other 211,049 259,707 ------------ ------------ Total current assets 1,205,736 1,100,684 GOODWILL - NET 229,802 149,437 OTHER ASSETS 799,348 820,447 PROPERTY, PLANT AND EQUIPMENT - NET 477,188 447,415 ------------ ------------ $ 2,712,074 $ 2,517,983 ============ ============
27 28
LIABILITIES AND SHAREHOLDERS' EQUITY 2001 2000 ------------ ------------ CURRENT LIABILITIES Debt due within one year $ 378,904 $ 109,694 Accounts payable and accrued liabilities 304,063 213,180 Accrued compensation and benefits 89,936 84,456 Dividends payable 12,732 25,808 Income taxes 192,936 13,090 Other current liabilities 132,710 136,260 ------------ ------------ Total current liabilities 1,111,281 582,488 LONG-TERM DEBT 380,124 442,102 OTHER LIABILITIES 146,187 195,985 DEFERRED INCOME TAXES 27,292 44,997 SHAREHOLDERS' EQUITY Common shares - par value $1: Class A - 71,739,574 shares issued less 12,879,781 Treasury shares in 2001 and 71,736,804 shares issued less 11,863,921 Treasury shares in 2000 58,860 59,873 Class B - 6,066,096 shares issued less 1,437,283 Treasury shares in 2001 and 6,066,096 shares issued less 1,418,762 Treasury shares in 2000 4,629 4,647 Capital in excess of par value 286,054 304,946 Treasury stock (447,127) (445,758) Accumulated other comprehensive loss (58,179) (27,572) Retained earnings 1,202,953 1,356,275 ------------ ------------ Total shareholders' equity 1,047,190 1,252,411 ------------ ------------ $ 2,712,074 $ 2,517,983 ============ ============
See notes to consolidated financial statements. 28 29 CONSOLIDATED STATEMENT OF CASH FLOWS Years ended February 28 or 29, 2001, 2000 and 1999 Thousands of dollars
2001 2000 1999 ----------- ----------- ----------- OPERATING ACTIVITIES: Net (loss) income $ (113,814) $ 89,999 $ 180,222 Adjustments to reconcile to net cash provided by operating activities: Cumulative effect of accounting change, net of tax 21,141 -- -- Write-down of equity investment 32,554 -- -- Non-recurring items -- 30,704 5,544 Depreciation and amortization 98,057 76,600 74,783 Deferred income taxes 61,227 54,248 (8,940) Changes in operating assets and liabilities, net of effects of acquisitions: Decrease (increase) in trade accounts receivable 29,201 (35,883) (10,450) (Increase) decrease in inventories (46,587) 11,655 17,809 Increase in other current assets (67,292) (57,261) (3,271) Decrease (increase) in deferred costs - net 4,110 (5,640) (65,588) Increase (decrease) in accounts payable and other liabilities 87,256 (689) 24,211 Other - net 3,947 4,786 (3,052) ----------- ----------- ----------- Cash Provided by Operating Activities 109,800 168,519 211,268 INVESTING ACTIVITIES: Business acquisitions (179,993) (65,947) (52,957) Property, plant and equipment additions (74,382) (50,753) (60,950) Proceeds from sale of fixed assets 22,294 1,490 2,522 Investment in corporate-owned life insurance 181 2,746 18,413 Other 33,944 (25,183) 8,040 ----------- ----------- ----------- Cash Used by Investing Activities (197,956) (137,647) (84,932) FINANCING ACTIVITIES: Increase in long-term debt -- 1,076 317,096 Reduction of long-term debt (80,431) (16,397) (22,669) Increase (decrease) in short-term debt 257,541 81,097 (158,657) Sale of stock under benefit plans -- 1,171 18,981 Purchase of treasury shares (45,530) (130,151) (131,745) Dividends to shareholders (52,743) (51,213) (52,410) ----------- ----------- ----------- Cash Provided (Used) by Financing Activities 78,837 (114,417) (29,404) ----------- ----------- ----------- (DECREASE) INCREASE IN CASH AND EQUIVALENTS (9,319) (83,545) 96,932 Cash and Equivalents at Beginning of Year 61,010 144,555 47,623 ----------- ----------- ----------- Cash and Equivalents at End of Year $ 51,691 $ 61,010 $ 144,555 =========== =========== ===========
See notes to consolidated financial statements. 29 30 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY Years ended February 28 or 29, 2001, 2000 and 1999 Thousands of dollars except per share amounts
Common Shares Capital in Shares Deferred -------------------------- Excess of Treasury Held In Compensation Class A Class B Par Value Stock Trust Plans ----------- ----------- ---------- --------- -------- ------------ BALANCE MARCH 1, 1998 $ 66,904 $ 4,278 $290,820 $(200,380) -- -- Net income Other comprehensive income: Foreign currency translation adjustment Unrealized gain on available-for-sale securities (net of tax of $3,360) Comprehensive income Issuance of shares to trust $(20,480) $20,480 Cash dividends - $0.94 per share Exchange of shares 40 (40) Sale of shares under benefit plans, including tax benefits 395 574 13,033 8,403 Purchase of treasury shares (2,906) (162) (128,677) Sale of treasury shares 10 233 162 ----------- ----------- -------- --------- -------- ------- BALANCE FEBRUARY 28, 1999 64,433 4,660 304,086 (320,492) (20,480) 20,480 Net income Other comprehensive loss: Foreign currency translation adjustment Unrealized loss on available-for-sale securities (net of tax of $1,131) Comprehensive income Cash dividends - $0.80 per share Exchange of shares 23 (23) Sale of shares under benefit plans, including tax benefits 20 2 826 122 Purchase of treasury shares (4,603) (6) (125,556) Sale of treasury shares 14 34 168 ----------- ----------- -------- --------- -------- ------- BALANCE FEBRUARY 29, 2000 59,873 4,647 304,946 (445,758) (20,480) 20,480 Net loss Other comprehensive loss: Foreign currency translation adjustment Unrealized loss on available-for-sale securities (net of tax of $129) -- Comprehensive loss Cash dividends - $0.62 per share Exchange of shares 1 (1) Sale of shares under benefit plans, including tax benefits 3 24 Purchase of treasury shares (2,220) (24) (43,287) Sale of treasury shares 3 7 202 Shares issued in acquisition 1,200 (18,916) 41,716 ----------- ----------- -------- --------- -------- ------- BALANCE FEBRUARY 28, 2001 $ 58,860 $ 4,629 $286,054 $(447,127) $(20,480) $20,480 =========== =========== ======== ========= ======== ======= Accumulated Other Comprehensive Retained (Loss) Income Earnings Total -------------- ----------- ----------- BALANCE MARCH 1, 1998 $(23,437) $ 1,207,032 $ 1,345,217 Net income 180,222 180,222 Other comprehensive income: Foreign currency translation adjustment (6,819) (6,819) Unrealized gain on available-for-sale securities (net of tax of $3,360) 6,691 6,691 ------------ Comprehensive income 180,094 Issuance of shares to trust Cash dividends - $0.94 per share (65,935) (65,935) Exchange of shares Sale of shares under benefit plans, including tax benefits (3,830) 18,575 Purchase of treasury shares (131,745) Sale of treasury shares 405 -------- ----------- ----------- BALANCE FEBRUARY 28, 1999 (23,565) 1,317,489 1,346,611 Net income 89,999 89,999 Other comprehensive loss: Foreign currency translation adjustment (1,744) (1,744) Unrealized loss on available-for-sale securities (net of tax of $1,131) (2,263) (2,263) ----------- Comprehensive income 85,992 Cash dividends - $0.80 per share (51,213) (51,213) Exchange of shares Sale of shares under benefit plans, including tax benefits 970 Purchase of treasury shares (130,165) Sale of treasury shares 216 -------- ----------- ----------- BALANCE FEBRUARY 29, 2000 (27,572) 1,356,275 1,252,411 Net loss (113,814) (113,814) Other comprehensive loss: Foreign currency translation adjustment (30,350) (30,350) Unrealized loss on available-for-sale securities (net of tax of $129) (257) (257) ----------- Comprehensive loss (144,421) Cash dividends - $0.62 per share (39,407) (39,407) Exchange of shares Sale of shares under benefit plans, including tax benefits 27 Purchase of treasury shares (45,531) Sale of treasury shares (101) 111 Shares issued in acquisition 24,000 -------- ----------- ----------- BALANCE FEBRUARY 28, 2001 $(58,179) $ 1,202,953 $ 1,047,190 ======== =========== ===========
See notes to consolidated financial statements. 30 31 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended February 28 or 29, 2001, 2000 and 1999 Thousands of dollars except per share amounts NOTE A - SIGNIFICANT ACCOUNTING POLICIES Consolidation: The consolidated financial statements include the accounts of the Corporation and its subsidiaries. All significant intercompany accounts and transactions are eliminated. The Corporation's subsidiary, AmericanGreetings.com, Inc., is consolidated on a two-month lag corresponding with its fiscal year-end of December 31. Reclassifications: Certain amounts in the prior year financial statements have been reclassified to conform with the 2001 presentation. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Cash Equivalents: The Corporation considers all highly liquid instruments purchased with a maturity of less than three months to be cash equivalents. Financial Instruments: The carrying value of the Corporation's financial instruments approximate their fair market values, other than the fair value of the Corporation's publicly-traded debt. See Note I. Concentration of Credit Risks: The Corporation sells primarily to customers in the retail trade, including those in the mass merchandiser, drug store, supermarket and other channels of distribution. These customers are located throughout the United States, Canada, the United Kingdom, Australia, New Zealand, France, Mexico, South Africa, Malaysia, Hong Kong and Singapore. Sales to the Corporation's five largest customers accounted for approximately 29%, 33% and 32% of net sales in 2001, 2000 and 1999, respectively. Sales to one customer accounted for 10% of net sales in 2001 and 2000. The Corporation conducts business based on periodic evaluations of its customers' financial condition and generally does not require collateral. While the competitiveness of the retail industry presents an inherent uncertainty, the Corporation does not believe a significant risk of loss from a concentration of credit exists. Inventories: Finished products, work in process and raw material inventories are carried at the lower of cost or market. The last-in, first-out (LIFO) cost method is used for the majority of the domestic inventories. The foreign subsidiaries principally use the first-in, first-out method. Display material and factory supplies are carried at average cost. 31 32 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE A - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Investment in Life Insurance: The Corporation's investment in corporate-owned life insurance policies is recorded in other assets net of policy loans. The net life insurance expense, including interest expense, is included in administrative and general expenses in the Consolidated Statement of Operations. The related interest expense, which approximates amounts paid, was $26,120, $40,564 and $54,670 in 2001, 2000 and 1999, respectively. Goodwill: Goodwill represents the excess of purchase price over the estimated fair value of net assets acquired and is amortized on a straight-line basis over a period of 40 years for goodwill associated with the social expression product segment and 15 years for goodwill associated with all other businesses. Accumulated amortization of goodwill at February 28, 2001 and February 29, 2000 was $34,708 and $25,908, respectively. Goodwill is reviewed annually for impairment in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of " (SFAS No. 121). Impairment losses are recorded when the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. Translation of Foreign Currencies: Asset and liability accounts are translated into U.S. dollars using exchange rates in effect at the date of the consolidated balance sheet; revenue and expense accounts are translated at average monthly exchange rates. Translation adjustments are reflected as a component of shareholders' equity. For subsidiaries operating in highly inflationary economies, both historical and current exchange rates are used in translating balance sheet accounts, and translation adjustments are included in net income. Property and Depreciation: Property, plant and equipment are carried at cost. Depreciation and amortization of buildings, equipment and fixtures is computed principally by the straight-line method over the useful lives of the various assets. The cost of buildings is depreciated over 25 to 40 years and equipment and fixtures over 3 to 20 years. Property, plant and equipment are reviewed annually for impairment in accordance with SFAS No. 121. Revenue Recognition: Except for seasonal cards, sales are recorded by the Corporation upon shipment of products to non-related retailers and upon the sale of products at Corporation-owned retail locations. Sales of seasonal cards to non-related retailers are recognized at the approximate date the product is received by the customer. Seasonal cards are sold with the right of return on unsold merchandise. The Corporation provides for estimated returns of seasonal cards when those products are shipped to non-related retailers. Accrual rates utilized for establishing estimated returns reserves have approximated actual returns experience. 32 33 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE A - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB 101), which among other guidance clarified the Staff's views on various revenue recognition and reporting matters. As a result, effective March 1, 2000, the Corporation adopted a change in its method of accounting for certain shipments of seasonal product. Under the new accounting method, the Corporation recognizes revenue on these seasonal shipments at the approximate date the merchandise is received by the customer and not upon shipment from the distribution facility. Customer receipt is a more preferable method of recording revenue due to the large volumes of seasonal product shipment activity and the time required to achieve customer-requested delivery dates. The implementation of the change has been accounted for as a change in accounting principle and applied cumulatively as if the change occurred at March 1, 2000. The effect of the change was a one-time non-cash reduction to the Corporation's earnings of $21,141 (net of tax of $12,564) or approximately $0.33 per share, which is included in operations for the year ended February 28, 2001. The Corporation recognized approximately $44,400 in net sales that are included in the cumulative effect adjustment as of March 1, 2000. Had this change been adopted effective March 1, 1999, net sales and earnings before the cumulative effect of this accounting change in 2000 would not have been materially impacted. Shipping and Handling Fees and Costs: The Corporation classifies shipping and handling fees as part of selling, distribution and marketing expenses. Shipping and handling costs were approximately $154,000, $116,900 and $107,000 in 2001, 2000 and 1999, respectively. Advertising Expense: Advertising costs are expensed as incurred. Advertising expense was $61,610, $76,879 and $67,369 in 2001, 2000 and 1999, respectively. Other Expense - Net: In 2001, other expense - net included $32,554 related to the write-down of the Corporation's investment in Egreetings Network, Inc. to $0.85 per share and a gain of $8,400 on the sale of a building in Canada. In 2000, other expense - net included costs to convert the Corporation's computer systems to be Year 2000 compliant. In the years presented, other expense-net also included amortization of goodwill, foreign exchange gains and losses, gains and losses on asset disposals, and royalty and interest income. 33 34 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE A - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Income Taxes: Deferred income taxes are provided for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Stock-Based Compensation: The Corporation has elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and related interpretations in accounting for its employee stock options. Because the exercise price of the Corporation's employee stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized. The Corporation has adopted the disclosure-only provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation". New Pronouncements: In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," was issued. This Statement, which establishes new accounting and reporting standards for derivative financial instruments, along with its amendments SFAS No. 137 and SFAS No. 138, will become effective for the Corporation for 2002. The Corporation has evaluated the effects of these statements on its accounting and reporting policies, and the adoption of the statements will not have a material effect on the Corporation's consolidated financial statements. 34 35 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE B - ACQUISITIONS On March 9, 2000, the Corporation completed its acquisition of Gibson Greetings, Inc. ("Gibson") for a cash price of $10.25 per share. Gibson distributed individual relationship communication products, including greeting cards, gift wrap, party goods and licensed products. E-mail greetings featuring Gibson content are available through Egreetings Network, Inc., in which Gibson held a minority equity interest. The acquisition has been accounted for by the purchase method of accounting, and accordingly, the consolidated statements of operations include the results of Gibson beginning with the first quarter of fiscal 2001. The assets acquired and liabilities assumed were recorded at estimated fair values as determined by the Corporation's management based on information currently available and on current assumptions as to future operations. For financial statement purposes, the excess of cost over net assets acquired is amortized by the straight-line method over 40 years. A summary of the assets acquired and liabilities assumed in the acquisition follows: Estimated fair values: Assets acquired $ 296,086 Liabilities assumed (165,065) Excess of cost over net assets acquired 49,288 -------------- Purchase price 180,309 Less cash acquired 10,147 -------------- Net cash paid (including $30,000 paid in prior fiscal year) $ 170,162 ============== The acquisition of Gibson was primarily financed through short-term borrowings; however, the Corporation will continue to evaluate long-term financing options. As a result of the acquisition of Gibson, the Corporation incurred acquisition integration expenses for the incremental costs to exit and consolidate activities at Gibson locations, to involuntarily terminate Gibson employees, and for other costs to integrate operating locations and other activities of Gibson with the Corporation. Generally accepted accounting principles require that these acquisition integration expenses, which are not associated with the generation of future revenues and have no future economic benefit, be reflected as assumed liabilities in the allocation of the purchase price to the net assets acquired. An additional requirement is that acquisition integration expenses which are associated with the generation of future revenues 35 36 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE B - ACQUISITIONS and have future economic benefit, and those associated with integrating Gibson operations into the Corporation's locations, must be recorded as expense. The components of the acquisition integration liabilities included in the purchase price allocation for Gibson follow:
Original Balance Remaining at Costs Utilized February 28, 2001 ----------------- ----------------- ---------------------------- Facility obligations $ 59,483 $ 5,649 $ 53,834 Workforce reductions 11,405 10,084 1,321 Other 19,363 10,973 8,390 ----------------- ----------------- ---------------------------- $ 90,251 $ 26,706 $ 63,545 ================= ================= ============================
The acquisition integration liabilities are based on the Corporation's integration plan which focuses on distribution facility rationalization. Unaudited pro forma results of operations for the twelve month period ended February 29, 2000, as if the Corporation and Gibson had been combined as of the beginning of that period, follow. Consolidated results for the year ended February 28, 2001, as reported, include the results of Gibson for the entire period. The pro forma results include estimates and assumptions which the Corporation's management believes are reasonable. However, the pro forma results do not include any cost savings or other effects of the planned integration of the Corporation and Gibson, and are not necessarily indicative of the results which would have occurred if the business combination had been in effect on the dates indicated, or which may result in the future. The pro forma results for the twelve months ended February 29, 2000 include a charge recorded by Gibson of approximately $23,000 to write down the inventory and related assets for one of its operations.
Pro forma Twelve months ended February 29, 2000 ----------------------- Net sales $2,521,663 Net income $51,104 Earnings per share and earnings per share assuming dilution $0.78
On July 13, 2000, the Corporation completed its acquisition of CPS Corporation ("CPS"), for a cash price of $31,000 plus 1,200,000 shares of the Corporation's common stock. CPS is a supplier of gift wrap and decorative packaging. 36 37 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE C - NON-RECURRING ITEMS AND SPECIAL CHARGES During the quarter ended February 29, 2000, the Corporation recorded a restructuring charge of $6,126 ($4,849 net of tax, or earnings per share of $0.08) related to various foreign operations. The primary component of this charge was for the rationalization of various warehouse, distribution and manufacturing facilities in the United Kingdom. The balance of the charge is composed of costs associated with the integration of Mexican manufacturing in the United States and the realignment of various business functions in Australia. During the second quarter ended August 31, 1999, the Corporation recorded a restructuring charge of $32,747. The primary components of this charge were costs associated with the shutdown of the Corporation's Canadian manufacturing and distribution operations, including employee severance and benefit termination costs and the costs of closing down the facilities used for those operations. In addition, the Corporation recorded a charge of $7,682 during the period to write down inventory in the Canadian operations. This amount is classified as material, labor and other production costs. The total impact of the restructuring and inventory charges net of tax was $24,224, or $0.36 per share. During the quarter ended November 30, 1998, the Corporation recorded a restructuring charge of $13,925 ($8,342 net of tax, or earnings per share of $0.12). The primary components of this charge were employee severance and termination benefit costs. The balance of the charge is comprised of costs associated with exiting the Corporation's kiosk business and lease exit costs due to the closure of certain sales offices. 37 38 The following table summarizes the provisions, payments and remaining reserves associated with the restructure charges recorded in 1999 through 2001.
Facility Kiosk Termination Shut-Down Exit Lease Exit Other Benefits Costs Costs Costs Costs Total -------- -------- -------- -------- -------- -------- Provision in 1999 $ 8,644 $ 4,618 $ 663 $ 13,925 Cash expenditures (5,019) (5,019) Non-cash charges (3,362) (3,362) -------- -------- -------- -------- Balance February 28, 1999 3,625 1,256 663 5,544 Provision in 2000 31,018 $ 4,634 $ 2,108 1,113 38,873 Activity relating to 1999 - ------------------------- Provision: - ---------- Cash expenditures (3,645) (620) (469) (4,734) Non-cash charges (588) (588) Change in estimate 162 (162) Activity relating to 2000 - ------------------------- Provision: - -------- Cash expenditures (1,646) (454) (930) (3,030) Non-cash charges (4,358) (99) (162) (519) (5,138) -------- -------- -------- -------- -------- -------- Balance February 29, 2000 25,156 4,081 48 1,016 626 30,927 Activity relating to 1999 - ------------------------- Provision: - -------- Cash expenditures (222) (222) Activity relating to 2000 - ------------------------- Provision: - ---------- Cash expenditures (19,152) (514) (13) (12) (22) (19,713) Non-cash charges (2,334) (342) (2,676) Change in estimate 45 (35) (10) Impact of foreign currency exchange rate changes (419) (85) (70) (17) (591) -------- -------- -------- -------- -------- -------- Balance February 28, 2001 $ 5,408 $ 1,148 $ -- $ 934 $ 235 $ 7,725 ======== ======== ======== ======== ======== ========
At February 28, 2001 and February 29, 2000, $7,725 and $30,927, respectively, were included in accounts payable and accrued liabilities representing the portion of the restructuring charges not yet expended. 38 39 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE D - (LOSS) EARNINGS PER SHARE The following table sets forth the computation of (loss) earnings per share and (loss) earnings per share - assuming dilution:
2001 2000 1999 ---------- ---------- ---------- Numerator: Net (loss) income for earnings per share and earnings per share - assuming dilution $ (113,814) $ 89,999 $ 180,222 ========== ========== ========== Denominator (thousands): Denominator for earnings per share - weighted average shares outstanding 63,646 65,592 70,346 Effect of dilutive securities - stock options -- -- 758 ---------- ---------- ---------- Denominator for (loss) earnings per share - assuming dilution - adjusted weighted average shares outstanding 63,646 65,592 71,104 ========== ========== ========== (Loss) earnings per share $ (1.79) $ 1.37 $ 2.56 ========== ========== ========== (Loss) earnings per share - assuming dilution $ (1.79) $ 1.37 $ 2.53 ========== ========== ==========
Certain stock options have been excluded for the years ended February 28, 2001 and February 29, 2000 because they would have been antidilutive. NOTE E - COMPREHENSIVE (LOSS) INCOME Accumulated other comprehensive (loss) income consists of the following components:
Foreign Unrealized Gains Accumulated Currency (Losses) on Other Translation Available-For-Sale Comprehensive Adjustments Securities Loss ----------- ------------------ ------------- Balance at February 28, 1998 $ (23,437) $ (23,437) Other comprehensive (loss) income (6,819) $ 6,691 (128) ---------- ---------- ---------- Balance at February 28, 1999 (30,256) 6,691 (23,565) Other comprehensive loss (1,744) (2,263) (4,007) ---------- ---------- ---------- Balance at February 29, 2000 (32,000) 4,428 (27,572) Other comprehensive loss (30,350) (257) (30,607) ---------- ---------- ---------- Balance at February 28, 2001 $ (62,350) $ 4,171 $ (58,179) ========== ========== ==========
Gross unrealized holding gains on available-for-sale securities as of February 28, 2001 and February 29, 2000 are $6,271 and $6,657, respectively. 39 40 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE F - INVENTORIES
2001 2000 ----------------- --------------- Raw material $ 49,408 $ 38,218 Work in process 33,370 27,099 Finished products 330,664 229,887 ----------------- --------------- 413,442 295,204 Less LIFO reserve 93,111 90,343 ----------------- --------------- 320,331 204,861 Display material and factory supplies 44,890 44,572 ----------------- --------------- $365,221 $249,433 ================= =============== NOTE G - PROPERTY, PLANT AND EQUIPMENT 2001 2000 ----------------- --------------- Land $ 15,085 $ 14,589 Buildings 320,849 307,713 Equipment and fixtures 750,160 696,819 ----------------- --------------- 1,086,094 1,019,121 Less accumulated depreciation 608,906 571,706 ----------------- --------------- $477,188 $ 447,415 ================= ===============
40 41 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE H - DEFERRED COSTS Deferred costs relating to agreements with certain customers are charged to operations on a straight-line basis over the effective period of each agreement, generally three to six years. Deferred costs estimated to be charged to operations during the next year are classified with prepaid expenses and other. Total commitments under the agreements are capitalized as deferred costs and future payment commitments, if any, are recorded as liabilities when the agreements are consummated. At February 28, 2001 and February 29, 2000, deferred costs and future payment commitments are included in the following financial statement captions: 2001 2000 ----------------- --------------- Prepaid expenses and other $ 142,436 $ 200,517 Other assets 717,400 679,214 Other current liabilities (119,770) (118,250) Other liabilities (111,030) (163,865) ----------------- --------------- $ 629,036 $ 597,616 ================= =============== 41 42 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE I - LONG AND SHORT-TERM DEBT On July 27, 1998, the Corporation issued $300,000 of 30-year senior notes with a 6.10% coupon rate under its $600,000 shelf registration with the Securities and Exchange Commission. The majority of the proceeds were used to retire commercial paper and other short-term debt, with the remainder used for other general corporate purposes and short-term investments. The fair value of the Corporation's publicly traded debt, based on quoted market prices, was $214,500 and $267,000 at February 28, 2001 and February 29, 2000, respectively. On August 3, 2000, the Corporation amended its multi-currency credit facility that provides liquidity and working capital financing for the Corporation and its subsidiaries in the United States, Canada, the United Kingdom, Australia, New Zealand and France. The aggregate availability under this facility is approximately $719,000 of which approximately $660,000 is available at February 28, 2001. The United States portion and one-half of the Canadian portion of the facilities, totaling $584,172, mature on August 2, 2001. The balance of the facility matures on August 2, 2005. The United States portion and one half of the Canadian portion of the facility are annually renewable for additional 364-day periods and are convertible to term loans with a maturity of August 2, 2005. A facility fee is due on the aggregate amount of the facility and can vary with the Corporation's debt rating. At February 28, 2001, the facility fee is 0.125% for the non-364 day portion of the facility and 0.100% for the 364-day portion. The borrowings of the Corporation in Canada consist of commercial paper. At February 28, 2001, commercial paper borrowings were $11,065, which are classified as long-term. The commercial paper borrowings are supported by the multi-currency credit facility described above. The Corporation's subsidiary in South Africa has credit agreements permitting borrowings of up to $5,715. At February 28, 2001, the amount outstanding under this foreign revolving credit facility is classified as long-term. All of the Corporation's revolving credit and term loan agreements provide for various borrowing alternatives in their respective currencies with interest rates generally ranging from 5% to 9% for amounts borrowed as of February 28, 2001. At February 28, 2001 and February 29, 2000, debt due within one year consists of the following:
2001 2000 ------------------- ----------------- Current maturities of long-term debt $ 664 $ 1,016 Foreign revolving credit facilities -- 1,263 ------------------- ----------------- Aggregate current maturities 664 2,279 Commercial paper 359,541 101,716 Other short-term debt 18,699 5,699 ------------------- ----------------- $ 378,904 $ 109,694 =================== =================
42 43 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE I - LONG AND SHORT-TERM DEBT (CONTINUED) At February 28, 2001 and February 29, 2000, long-term debt consists of the following:
2001 2000 --------------- --------------- Revolving credit, commercial paper and term loan agreements $ 80,484 $132,524 Notes payable 299,996 311,294 Other 308 563 --------------- --------------- 380,788 444,381 Less current maturities 664 2,279 --------------- --------------- $380,124 $442,102 =============== ===============
Aggregate maturities of long-term debt are as follows: 2002 $ 664 2003 590 2004 381 2005 265 2006 59,245 Thereafter 319,643 -------------- $ 380,788 ============== At February 28, 2001, the Corporation had credit arrangements to support the issuance of letters of credit in the amount of $41,102 with $29,481 of open credits outstanding. Interest paid on short-term and long-term debt was $54,637 in 2001, $34,051 in 2000 and $27,831 in 1999. The weighted average interest rate on short-term borrowings outstanding was 6.0% and 5.4% as of February 28, 2001 and February 29, 2000, respectively. 43 44 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE J - RETIREMENT PLANS The Corporation has a non-contributory profit-sharing plan with a contributory 401(k) provision covering most of its United States employees. Contributions to the profit-sharing plan were $5,175, $11,858, and $22,687 for 2001, 2000 and 1999, respectively. The Corporation matches a portion of 401(k) employee contributions contingent upon meeting specified annual operating results goals. The Corporation's matching contributions were $0, $4,517, and $4,622 for 2001, 2000 and 1999, respectively. The Corporation also has several defined benefit and defined contribution pension plans covering certain employees in foreign countries. The cost of these plans was not material in any of the years presented. In the aggregate, the actuarially computed plan benefit obligation approximates the fair value of the plan assets. The Corporation assumed Gibson's defined contribution plan that provided Gibson employees meeting certain eligibility requirements the ability to defer a portion of their salary subject to certain limitations. The plan was merged into the Corporation's profit sharing plan effective December 31, 2000. The Corporation paid certain administrative costs of the plan and made contributions to the plan during 2001 based upon a percentage of the employee's salary deferral. The Corporation's contributions totaled $170 during 2001. The Corporation also assumed the obligations and assets of Gibson's defined benefit pension plan (the Retirement Plan) which covered substantially all Gibson employees who met certain eligibility requirements. Benefits earned under the Retirement Plan have been frozen and participants no longer accrue any more benefits after December 31, 2000. The Corporation will contribute to the plan amounts sufficient to ensure the Retirement Plan meets funding requirements. Contributions are intended to provide for benefits earned to date as no additional benefits will be earned in the future. 44 45 The following table sets forth summarized information on Gibson's plans for the year ended February 28, 2001:
Defined Benefit Other Pension Postretirement Plan Benefits ----------- -------------- Change in benefit obligation: Benefit obligation at beginning of year $ -- $ -- Acquired business 95,540 3,034 Service cost -- 150 Interest cost 5,770 200 Participant contribution -- 234 Actuarial loss -- 624 Benefit payments (6,099) (404) ----------- ----------- Benefit obligation at end of year 95,211 3,838 Change in plan assets: Fair value of plan assets at beginning of year -- -- Fair value of plan assets of acquired business 84,080 -- Actual return on plan assets 7,967 -- Contributions -- 404 Benefit payments (6,099) (404) ----------- ----------- Fair value of plan assets at end of year 85,948 -- ----------- ----------- Funded (underfunded) status at end of year (9,263) (3,838) Unrecognized (gain) loss (2,109) 624 ----------- ----------- Accrued benefit cost $ (11,372) $ (3,214) =========== =========== Assumptions Discount rate 6.25% 7.25% Expected return on plan assets 7.25% N/A Health care cost trend rate -- 10% in 2002 decreasing 1% each year to 5%
45 46 Defined Benefit Other Pension Postretirement Plan Benefits ----------- -------------- Components of net periodic benefit cost for the year ended February 28, 2001: Service cost $ -- $ 150 Interest cost 5,770 200 Expected return on assets (5,858) -- ---------- ---------- Net periodic benefit cost $ (88) $ 350 ========== ========== Effect of a 1% increase in the health care cost trend rate on: Service cost plus interest cost $ 17 Accumulated postretirement benefit obligation 167 Effect of a 1% decrease in the health care cost trend rate on: Service cost plus interest cost $ (16) Accumulated postretirement benefit obligation (160)
46 47 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE K - POSTRETIREMENT BENEFITS OTHER THAN PENSIONS The Corporation sponsors a defined benefit health care plan that provides postretirement medical benefits to full-time United States employees who meet certain age and service requirements. In addition, for retirements on or after January 2, 1992, the retiree must have been continuously enrolled for health care for a minimum of five years or since January 2, 1992. The plan is contributory, with retiree contributions adjusted periodically, and contains other cost-sharing features such as deductibles and coinsurance. The Corporation maintains a trust for the payment of retiree health care benefits. This trust is funded at the discretion of management.
2001 2000 ---------- ---------- Change in benefit obligation: Benefit obligation at beginning of year $ 80,452 $ 75,276 Service cost 2,252 2,327 Interest cost 6,449 5,637 Participant contributions 3,293 1,483 Actuarial losses 24,205 1,961 Benefit payments (6,634) (6,232) ---------- ---------- Benefit obligation at end of year 110,017 80,452 Change in plan assets: Fair value of plan assets at beginning of year 47,269 44,714 Actual return on plan assets 5,838 2,178 Contributions 9,120 6,609 Benefit payments (6,634) (6,232) ---------- ---------- Fair value of plan assets at end of year 55,593 47,269 ---------- ---------- Funded (underfunded) status at end of year (54,424) (33,183) Unrecognized loss 43,524 23,215 ---------- ---------- Accrued benefit cost $ (10,900) $ (9,968) ========== ==========
47 48 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE K - POSTRETIREMENT BENEFITS OTHER THAN PENSIONS (CONTINUED)
2001 2000 ---------- ---------- Components of net periodic benefit cost: Service cost $ 2,252 $ 2,327 Interest cost 6,449 5,637 Expected return on plan assets (3,627) (3,441) Amortization of actuarial loss 1,685 1,784 ---------- ---------- Net periodic benefit cost $ 6,759 $ 6,307 ========== ========== Weighted average assumptions as of February 28 or 29: Discount rate 7.25% 7.50% Expected return on assets 8% 8% Health care cost trend rate 10% in 2002 5% decreasing 1% per year to 5% Effect of a 1% increase in health care cost trend rate on: Service cost plus interest cost $ 1,619 $ 1,522 Accumulated postretirement benefit obligation 17,314 13,642 Effect of a 1% decrease in health care cost trend rate on: Service cost plus interest cost $ (1,284) $ (1,202) Accumulated postretirement benefit obligation (14,015) (10,980)
48 49 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE L - LONG-TERM LEASES The Corporation is committed under noncancelable operating leases for commercial properties (certain of which have been subleased) and equipment, terms of which are generally less than 25 years. Rental expense under operating leases for the years ended February 28 or 29, 2001, 2000 and1999 follows:
2001 2000 1999 --------------- --------------- --------------- Gross rentals $71,479 $59,876 $58,616 Less sublease rentals 2,611 3,638 4,470 --------------- --------------- --------------- Net rental expense $68,868 $56,238 $54,146 =============== =============== ===============
At February 28, 2001, future minimum rental payments for noncancelable operating leases, net of aggregate future minimum noncancelable sublease rentals, follow: Gross Rentals: 2002 $ 53,414 2003 46,175 2004 27,596 2005 28,794 2006 24,385 Later years 65,471 --------------- 245,835 Sublease rentals (20,961) --------------- Net rentals $ 224,874 =============== 49 50 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE M - COMMON SHARES AND STOCK OPTIONS At February 28, 2001 and February 29, 2000, common shares authorized consisted of 187,600,000 Class A and 15,832,968 Class B shares. Class A shares have one vote per share and Class B shares have ten votes per share. There is no public market for the Class B common shares of the Corporation. Pursuant to the Corporation's Amended Articles of Incorporation, a holder of Class B common shares may not transfer such Class B common shares (except to permitted transferees, a group that generally includes members of the holder's extended family, family trusts and charities) unless such holder first offers such shares to the Corporation for purchase at the most recent closing price for the Corporation's Class A common shares. If the Corporation does not purchase such Class B common shares, the holder must convert such shares, on a share for share basis, into Class A common shares prior to any transfer. Under the Corporation's Stock Option Plans, options to purchase Class A and Class B shares are granted to directors, officers and other key employees at the then-current market price. In general, subject to continuing employment, options become exercisable commencing one year after date of grant in four annual installments and expire over a period of not more than ten years from the date of grant. The options granted to non-employee directors become exercisable in either six installments over five years or in four installments over four years. The Corporation has elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25) and related Interpretations in accounting for its employee stock options because, as discussed below, the alternative fair value accounting provided for under Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS No. 123), requires use of option valuation models that were not developed for use in valuing employee stock options. Under APB 25, because the exercise price of the Corporation's employee stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized. Pro forma information regarding net income and earnings per share is required by SFAS No. 123 and has been determined as if the Corporation had accounted for its employee stock options issued subsequent to February 28, 1995 under the fair value method of that Statement. The fair value for these options was estimated at the date of grant using the Black-Scholes option pricing model. 50 51 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE M - COMMON SHARES AND STOCK OPTIONS (CONTINUED) The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Corporation's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period. The pro forma information for stock options indicates an increase in net loss of $4,863 in 2001, and decreases in net income of $8,520 in 2000 and $3,248 in 1999. The pro forma information and related assumptions under the Black-Scholes method follow:
2001 2000 1999 ------------- ------------ ------------ Net (loss) income $ (118,677) $ 81,479 $ 176,974 (Loss) earnings per share $ (1.86) $ 1.24 $ 2.52 (Loss) earnings per share - assuming dilution $ (1.86) $ 1.24 $ 2.49 Assumptions: Risk-free interest rate 5.9% 5.4% 5.4% Dividend yield 5.4% 3.2% 1.6% Expected stock volatility 0.46 0.41 0.27 Expected life in years: Grant date to exercise date 7.7 5.7 5.6 Vest date to exercise date 2.4 2.4 2.4
51 52 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE M - COMMON SHARES AND STOCK OPTIONS (CONTINUED) Stock option transactions and prices are summarized as follow:
Number of Options Weighted-Average Exercise Price Per Share ----------------------------------- -------------------------------------------- Class A Class B Class A Class B --------------- ---------------- --------------------- ------------------ Options outstanding February 28, 1998 2,611,135 1,349,012 $ 27.58 $ 19.54 Granted 189,850 596 45.73 48.06 Exercised (395,754) (573,422) 25.54 9.07 Cancelled (127,200) (7,000) 30.25 26.13 --------------- ---------------- Options outstanding February 28, 1999 2,278,031 769,186 $ 29.18 $ 27.30 Granted 3,648,950 -- 23.81 -- Exercised (20,800) (2,000) 20.28 19.25 Cancelled (293,000) (1,000) 26.09 26.13 --------------- ---------------- Options outstanding February 29, 2000 5,613,181 766,186 $25.87 $27.32 Granted 775,500 -- 15.45 -- Exercised (1,600) -- 16.53 -- Cancelled (626,850) (76,500) 25.16 24.15 --------------- ---------------- Options outstanding February 28, 2001 5,760,231 689,686 $ 24.57 $ 27.67 =============== ================ Options exercisable at February 28 or 29 2001 2,469,531 689,686 $ 27.44 $ 27.74 2000 1,709,281 649,436 27.47 26.93 1999 1,235,331 490,936 26.23 26.23
The weighted average remaining contractual life of the options outstanding as of February 28, 2001 is 6.7 years. 52 53 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE M - COMMON SHARES AND STOCK OPTIONS (CONTINUED) Range of exercise prices for options outstanding:
Outstanding Exercisable ------------------------------------- ----------------------------------- Weighted- Weighted Weighted Average Average Average Remaining Exercise Price Optioned Exercise Optioned Exercise Contractual Ranges Shares Price Shares Price Life (Years) - ------------------------------ ----------------- ---------------- --------------- --------------- ----------------- $ 8.50000 - 18.88000 727,000 $15.08151 19,300 $17.80052 9.33 19.12500 - 19.25000 345,600 19.24967 345,600 19.24967 0.96 19.81250 - 23.56250 2,783,400 23.50612 546,000 23.50002 7.56 23.68750 - 27.25000 846,092 26.38701 692,492 26.82114 5.11 27.50000 - 29.43750 126,887 28.42696 71,687 28.45861 6.33 29.50000 - 29.50000 1,224,842 29.50000 1,204,542 29.50000 5.57 29.87500 - 48.50000 373,146 38.46682 267,046 38.31815 6.39 50.00000 - 50.00000 16,000 50.00000 8,000 50.00000 7.33 50.25000 - 50.25000 6,800 50.25000 4,400 50.25000 6.75 51.62500 - 51.62500 150 51.62500 150 51.62500 7.34 ----------------- --------------- $8.50000 - $51.62500 6,449,917 3,159,217 ================= ===============
53 54 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE N - BUSINESS SEGMENT INFORMATION The Corporation is organized and managed according to a number of factors, including product categories, geographic locations and channels of distribution. The Social Expression Products segment primarily designs, manufactures and sells greeting cards and other products through various channels of distribution with mass retailers as the primary channel and is managed by geographic location. As permitted under Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information," certain operating divisions have been aggregated into one reportable segment. These operating divisions have similar economic characteristics, products, production processes, types of customers and distribution methods. AmericanGreetings.com is a web-based provider of greetings and other social communication content to consumers and web-based businesses. The Corporation's non-reportable operating segments include the design, manufacture and sale of promotional Christmas product, non-prescription reading glasses, educational materials and display fixtures; and the sale of both the Corporation's products and other products through retail stores. The Corporation evaluates segment performance based on earnings before foreign currency exchange gains or losses, interest income, interest expense and income taxes. Centrally incurred and managed costs and non-recurring items are not allocated back to the operating segments. The accounting policies of the reportable segments are the same as those described in Note A - Significant Accounting Policies, except those that are related to LIFO or applicable to only corporate items. Intersegment sales are recorded at wholesale prices. Intersegment sales and profits are eliminated in consolidation. All inventories resulting from intersegment sales are carried at cost. The reporting and evaluation of segment assets include net accounts receivable, inventory on a "first-in, first-out" basis, display materials and factory supplies, prepaid expenses, other assets (including net deferred costs), and net property, plant and equipment. Segment results are reported and evaluated at consistent exchange rates between years to eliminate the impact of foreign currency fluctuations. An exchange rate adjustment is included in the reconciliation of the segment results to the consolidated results; this adjustment represents the impact on the segment results of the difference between the exchange rates used for segment reporting and evaluation and the actual exchange rates for the periods presented. 54 55 Operating Segment Information - -----------------------------
Net Sales Earnings ------------------------------------------- ------------------------------------------- 2001 2000 1999 2001 2000 1999 ----------- ----------- ----------- ----------- ----------- ----------- Social Expressions Products $ 1,981,772 $ 1,745,830 $ 1,832,784 $ 306,921 $ 340,332 $ 447,246 Intersegment items (85,659) (85,229) (80,578) (61,825) (59,763) (56,748) ----------- ----------- ----------- ----------- ----------- ----------- Net 1,896,113 1,660,601 1,752,206 245,096 280,569 390,498 AmericanGreetings.com 24,378 14,345 7,577 (36,065) (20,373) 3,794 Non-reportable segments 621,039 495,848 441,446 58,843 50,771 44,202 Non-recurring items -- -- -- -- (46,387) (13,925) Egreetings write down -- -- -- (32,554) -- -- Exchange rate adjustment (22,716) 4,442 4,477 (1,925) (4,004) 403 Unallocated items - net -- -- -- (134,762) (119,952) (143,375) ----------- ----------- ----------- ----------- ----------- ----------- Consolidated $ 2,518,814 $ 2,175,236 $ 2,205,706 $ 98,633 $ 140,624 $ 281,597 =========== =========== =========== =========== =========== =========== Assets Depreciation and Amortization ----------------------------------------- ---------------------------------------- 2001 2000 1999 2001 2000 1999 ----------- ----------- ----------- ----------- ----------- ----------- Social Expressions Products $ 1,840,771 $ 1,717,982 $ 1,676,314 $ 47,663 $ 44,207 $ 45,910 AmericanGreetings.com 48,563 31,663 12,507 22,773 6,385 2,154 Non-reportable segments 418,714 266,080 262,236 24,271 22,777 25,921 Unallocated and intersegment items 454,829 505,399 469,724 3,852 3,136 960 Exchange rate adjustment (50,803) (3,141) (1,453) (502) 95 (162) ----------- ----------- ----------- ----------- ----------- ----------- Consolidated $ 2,712,074 $ 2,517,983 $ 2,419,328 $ 98,057 $ 76,600 $ 74,783 =========== =========== =========== =========== =========== =========== Capital Expenditures ------------------------------------- 2001 2000 1999 ---------- --------- ---------- Social Expressions Products $56,811 $25,666 $43,907 AmericanGreetings.com 4,741 3,762 401 Non-reportable segments 14,546 21,103 17,152 Unallocated and intersegment items - - - Exchange rate adjustment (1,716) 222 (510) ---------- --------- ---------- Consolidated $74,382 $50,753 $60,950 ========== ========= ========== Other Information - ----------------- Product Information Net Sales -------------------------------------------- 2001 2000 1999 ------------ ----------- ------------ Everyday greeting cards $1,063,576 $976,922 $1,051,374 Seasonal greeting cards 513,464 438,921 450,611 Gift wrapping and wrap 395,639 301,131 301,517 accessories All other 546,135 458,262 402,204 ------------ ----------- ------------ Consolidated $2,518,814 $2,175,236 $2,205,706 ============ =========== ============ Geographic Information Net Sales Fixed Assets - Net ------------------------------------------- ------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------ ----------- ----------- ----------- ------------ ------------ United States $2,087,090 $1,751,686 $1,819,857 $416,447 $371,622 $363,801 Foreign 431,724 423,550 385,849 60,741 75,793 71,005 ------------ ----------- ----------- ----------- ------------ ------------ Consolidated $2,518,814 $2,175,236 $2,205,706 $477,188 $447,415 $434,806 ============ =========== =========== =========== ============ ============
55 56 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE O - INCOME TAXES Income (loss) before income taxes and cumulative effect of accounting change:
2001 2000 1999 ---------------- --------------- ---------------- United States $ 87,231 $ 135,039 $ 300,411 Foreign 11,402 5,585 (18,814) ---------------- --------------- ---------------- $ 98,633 $ 140,624 $ 281,597 ================ =============== ================
Income taxes (benefit) have been provided as follows:
2001 2000 1999 ---------------- --------------- ---------------- Current: Federal $ 212,138 $ 3,029 $ 111,736 Foreign (2,799) (9,082) (18,423) State and local 21,821 1,197 16,977 ---------------- --------------- ---------------- 231,160 (4,856) 110,290 Deferred (principally federal) (39,854) 55,481 (8,915) ---------------- --------------- ---------------- $ 191,306 $ 50,625 $ 101,375 ================ =============== ================
Significant components of the Corporation's deferred tax assets and liabilities at February 28, 2001 and February 29, 2000 are as follows:
2001 2000 ---------------- ---------------- Deferred tax assets: Employee benefit and incentive plans $ 20,742 $ 36,781 Sales returns 11,225 2,708 Deferred capital loss carryforward 11,394 - Inventory costing 24,698 7,911 Lease buyout 35,096 15,785 Other 99,334 49,615 ---------------- ---------------- 202,489 112,800 Valuation allowance (20,861) (9,467) ---------------- ---------------- Total deferred tax assets 181,628 103,333 Deferred tax liabilities: Depreciation 30,056 44,969 Other 25,567 29,374 ---------------- ---------------- Total deferred tax liabilities 55,623 74,343 ---------------- ---------------- Net deferred tax assets $ 126,005 $ 28,990 ================ ================
The increase in the valuation allowance was primarily due to an increase in a capital loss carryforward. 56 57 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NOTE O - INCOME TAXES (CONTINUED) Reconciliation of income tax expense using the statutory rate and actual income tax exposure is as follows:
2001 2000 1999 --------------- ------------ -------------- Income tax at statutory rate $ 34,522 $49,218 $ 98,559 State and local income taxes, net of federal tax benefit 3,286 5,346 10,419 Corporate-owned life insurance investments (1,238) 75 (8,166) Contested liability - COLI 143,581 - - Change in valuation allowance 11,394 - - Foreign differences (6,763) (2,953) - Other 6,524 (1,061) 563 --------------- ------------ -------------- Income tax at effective tax rate $191,306 $50,625 $101,375 =============== ============ ==============
Income taxes (refunded) paid were $(18,174) in 2001, $19,821 in 2000 and $102,363 in 1999. Deferred taxes have not been provided on approximately $16,517 of undistributed earnings of foreign subsidiaries since substantially all of these earnings are necessary to meet their business requirements. It is not practicable to calculate the deferred taxes associated with these earnings; however, foreign tax credits would be available to reduce federal income taxes in the event of distribution. At February 28, 2001, the Corporation had approximately $28,303 of foreign operating loss carryforwards, of which $16,546 have no expiration dates and $11,757 have expiration dates ranging from 2002 through 2012. Included in income tax expense was a charge for approximately $143,000 for potential tax exposure for the fiscal years ended 1992 through 1999 relating to the Corporation's corporate-owned life insurance program (COLI). This charge represents the effect of proposed adjustments by the IRS for the disallowance of certain deductions related to this insurance program. The Corporation believes that it has fully complied with the tax law as it related to its COLI program and plans to vigorously contest the proposed adjustments or any subsequent assessments. 57 58 QUARTERLY RESULTS OF OPERATIONS - ------------------------------- (Unaudited) Thousands of dollars except per share amounts The following is a summary of the unaudited quarterly results of operations for the years ended February 28, 2001 and February 29, 2000:
Quarter Ended ----------------------------------------------------------------------- May 31 Aug 31 Nov 30 Feb 28 --------------- -------------- -------------- --------------- Fiscal 2001 - ----------- Net sales $ 595,741 $ 493,732 $ 766,095 $ 663,246 Gross profit 392,417 298,621 410,237 418,268 Cumulative effect of accounting change, net of tax 21,141 -- -- -- Net income (loss) 17,365 (35,505) 32,015 (127,689) Earnings (loss) per share 0.27 (0.55) 0.50 (2.01) Earnings (loss) per share - assuming dilution 0.27 (0.55) 0.50 (2.01) Quarter Ended ----------------------------------------------------------------------- May 31 Aug 31 Nov 30 Feb 29 --------------- -------------- -------------- --------------- Fiscal 2000 - ----------- Net sales $ 458,757 $ 477,783 $ 623,356 $ 615,340 Gross profit 298,992 288,962 372,583 405,352 Non-recurring charge -- 32,747 -- 6,126 Net income (loss) 10,847 (26,298) 53,882 51,568 Earnings (loss) per share 0.16 (0.39) 0.81 0.79 Earnings (loss) per share - assuming dilution 0.16 (0.39) 0.81 0.79
58 59 REPORT OF INDEPENDENT AUDITORS Board of Directors and Shareholders American Greetings Corporation We have audited the accompanying consolidated statement of financial position of American Greetings Corporation as of February 28, 2001 and February 29, 2000, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the three years in the period ended February 28, 2001. Our audits also included the financial statement schedule listed in the Index at Item 14(a) 3. These financial statements and schedule are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of American Greetings Corporation at February 28, 2001 and February 29, 2000, and the consolidated results of their operations and their cash flows for each of the three years in the period ended February 28, 2001, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. As discussed in Note A to the consolidated financial statements, effective March 1, 2000, the Corporation changed its method of accounting for certain shipments of seasonal product. /s/ Ernst & Young LLP Cleveland, Ohio March 27, 2001 59 60 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There were no disagreements with the Corporation's independent auditors on accounting or financial disclosure matters within the three year period ended February 28, 2001, or in any period subsequent to such date. PART III The Corporation hereby incorporates by reference the information called for by Part III of Form 10-K from the Corporation's Notice of Annual Meeting of Shareholders to be held June 22, 2001, and related Proxy Statement to be filed with the Securities and Exchange Commission on May 15, 2001. (Next item is Part IV) 60 61 PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) 1. Financial Statements -------------------- Included in Part II of this report: Consolidated Statement of Operations - Years ended February 28 or 29, 2001, 2000 and 1999 Consolidated Statement of Financial Position - February 28, 2001 and February 29, 2000 Consolidated Statement of Cash Flows - Years ended February 28 or 29, 2001, 2000 and 1999 Consolidated Statement of Shareholders' Equity - Years ended February 28 or 29, 2001, 2000 and 1999 Notes to Consolidated Financial Statements - Years ended February 28 or 29, 2001, 2000 and 1999 Quarterly Results of Operations (Unaudited) Report of Independent Auditors 2. Exhibits required by Item 601 of Regulation S-K: ------------------------------------------------ (3) Articles of Incorporation and By-laws (i) Amended Articles of Incorporation of the Registrant This Exhibit has been previously filed as an Exhibit to the Registrant's 10-K Annual Report for the Fiscal year ended February 28, 1999, and is incorporated herein by reference. (ii) Amended Regulations of the Registrant This Exhibit has been previously filed as an Exhibit to the Registrant's 10-K Annual Report for the Fiscal year ended February 28, 1999, and is incorporated herein by reference. 61 62 PART IV - Continued (4) Instruments Defining the Rights of Security Holders, including indentures (i) Trust Indenture, dated as of July 27, 1998 This Exhibit has been previously filed as an Exhibit to the Registrant's 10-K Annual Report for the Fiscal year ended February 28, 1999, and is incorporated herein by reference. (ii) Credit Agreement dated as of August 7, 1998 This Exhibit has been previously filed as an Exhibit to the Registrant's 10-K Annual Report for the Fiscal year ended February 28, 1999, and is incorporated herein by reference. (iii) Amended and Restated Credit Agreement dated August 3, 2000 (iv) Second Amended and Restated Credit Agreement dated April 30, 2001 (10) Material Contracts (i) (A) (i) Officers' contracts * This Exhibit has been previously filed as an Exhibit to the Registrant's Form 10-K Annual Report for the fiscal year ended February 28, 1999, and is incorporated herein by reference. (ii) (A) (i) Shareholders Agreement dated November 19, 1984 * This Exhibit has been previously filed as an Exhibit to the Registrant's Form 10-K Annual Report for the fiscal year ended February 28, 1997, and is incorporated herein by reference. (ii) Executive Bonus Plan * This Exhibit has been previously filed as an Exhibit to the Registrant's Form 10-K Annual Report for the fiscal year ended February 28, 1997, and is incorporated herein by reference. 62 63 PART IV - Continued (iii) Executive Incentive Compensation Plan (as Amended and Restated as at March 6, 1989) * This Exhibit has been previously filed as an Exhibit to the Registrant's Form 10-K Annual Report for the fiscal year ended February 28, 1997, and is incorporated herein by reference. (iv) Executive Deferred Compensation Plan * This Exhibit has been previously filed as an Exhibit to the Registrant's Form 10-K Annual Report for the Fiscal Year ended February 28, 1999, and is incorporated herein by reference. (v) 1982 Incentive Stock Option Plan * This Exhibit has been previously filed as an Exhibit to the Registrant's Form S-8 Registration Statement (Registration No. 2-84911) dated July 1, 1983, and is incorporated herein by reference. (vi) 1985 Incentive Stock Option Plan * This Exhibit has been previously filed as an Exhibit to the Registrant's Form S-8 Registration Statement (Registration No. 33-975) dated November 7, 1985, and is incorporated herein by reference. (vii) Supplemental Executive Retirement Plan * This Exhibit has been previously filed as an Exhibit to the Registrant's Form 10-K Annual Report for the Fiscal Year ended February 28, 1999, and is incorporated herein by reference. (viii) 1987 Class B Stock Option Plan This Exhibit has been previously filed as an Exhibit to the Registrant's Form S-8 Registration Statement (Registration No. 33-16180) dated July 31, 1987, and is incorporated herein by reference. (ix) Stock Option Agreement with Morry Weiss dated January 25,1988 * This Exhibit has been previously filed as an Exhibit to the Registrant's Form 10-K Annual Report for the fiscal year ended February 28, 1997, and is incorporated herein by reference. 63 64 PART IV - Continued (x) Loan Agreement with Edward Fruchtenbaum dated March 1,1990 * This Exhibit has been previously filed as an Exhibit to the Registrant's Form 10-K Annual Report for the fiscal year ended February 28, 1997, and is incorporated herein by reference. (xi) 1992 Stock Option Plan * This Exhibit has been previously filed as an Exhibit to the Registrant's Form S-8 Registration Statement (Registration No. 33-58582) dated February 22,1993, and is incorporated herein by reference. (xii) CEO and Named Executive Officers Compensation Plan (xiii) 1995 Director Stock Plan * This Exhibit has been previously filed as an Exhibit to the Registrant's Form S-8 Registration Statement (Registration No. 33-61037) dated July 14, 1995, and is incorporated herein by reference. (xiv) 1996 Employee Stock Option Plan * This Exhibit has been previously filed as an Exhibit to the Registrant's Form S-8 Registration Statement (Registration No. 33-08123) dated July 15, 1996, and is incorporated herein by reference. (xv) 1997 Equity and Performance Incentive Plan * This Exhibit has been previously filed as an Exhibit to the Registrant's Form 10-K Annual Report for the fiscal year ended February 28, 1997, and is incorporated herein by reference. (xvi) 1997 Equity and Performance Incentive Plan, as amended* This Exhibit has been previously filed as an Exhibit to the Registrant's Form S-8 Registration Statement (Registration No. 333-41912) dated July 21, 2000, and is incorporated herein by reference. (iii) (A) (i) Agreement to defer stock option gains with Morry Weiss dated December 15, 1997 * This Exhibit has been previously filed as an Exhibit to the Registrant's 10-K Annual Report for the Fiscal year ended February 28, 1997, and is incorporated herein by reference. (21) Subsidiaries of the Registrant 64 65 PART IV - Continued (23) Consent of Independent Auditors Executive Compensation Plans and Arrangements The Corporation's executive compensation plans and arrangements are listed under Exhibit 10 hereof and marked by an asterisk (*). (b) Reports on Form 8-K On March 24, 2000, the Corporation filed Form 8-K with the Securities and Exchange Commission. This filing reported that the Corporation had completed its acquisition of Gibson Greetings, Inc. On May 23, 2000, the Corporation filed Form 8-K/A with the Securities and Exchange Commission. This filing amended the Form 8-K filed March 24, 2000 to include the historical and pro forma information required for the combined entity. On May 11, 2000, the Corporation filed Form 8-K with the Securities and Exchange Commission. This filing reported that the Corporation had adopted a change in its method of accounting for certain shipments of seasonal product which carry implied acceptance provisions. On April 3, 2001, the Corporation filed Form 8-K with the Securities and Exchange Commission. This filing reported that the Corporation had completed its acquisition of Egreetings Network, Inc. (c) Exhibits listed in Item 14(a) 3. are included herein or incorporated herein by reference. (d) Financial Statement Schedules The response to this portion of Item 14 is submitted below. 3. Financial Statement Schedules ----------------------------- Included in Part IV of the report: Schedule II - Valuation and Qualifying Accounts All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted. 65 66 PART IV - Continued SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AMERICAN GREETINGS CORPORATION ------------------------------ (Registrant) Date: May 3, 2001 By: /s/ Jon Groetzinger, Jr. ------------- ------------------------------ Jon Groetzinger, Jr. Secretary 66 67 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
SIGNATURE TITLE DATE --------- ----- ---- /s/ Morry Weiss Chairman of the Board; ) - --------------------------------- Chief Executive Officer; ) Morry Weiss Director ) ) /s/ James C. Spira President; ) - --------------------------------- Chief Operating Officer; ) James C. Spira Director ) ) /s/ Scott S. Cowen Director ) - --------------------------------- Scott S. Cowen ) ) /s/ Stephen R. Hardis Director ) - --------------------------------- Stephen R. Hardis ) ) /s/ Charles Ratner Director ) May 3, 2001 - --------------------------------- Charles Ratner ) ) /s/ Harry H. Stone Director ) - --------------------------------- Harry H. Stone ) ) /s/ Harriet Mouchly-Weiss Director ) - --------------------------------- Harriet Mouchly-Weiss ) ) /s/ Jack Kahl Director ) - --------------------------------- Jack Kahl ) ) /s/ Jerry Sue Thornton Director ) - --------------------------------- Jerry Sue Thornton ) ) /s/ William S. Meyer Senior Vice President; ) - --------------------------------- Chief Financial Officer ) William S. Meyer (principal financial officer) ) ) /s/ Patricia L. Ripple Vice President; ) - --------------------------------- Corporate Controller ) Patricia L. Ripple (principal accounting officer) )
67 68
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AMERICAN GREETINGS CORPORATION AND SUBSIDIARIES (000) - --------------------------------------- ------------- ------------------------------------- ---------------- ------------ COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E - --------------------------------------- ------------- ------------------------------------- ---------------- ------------ ADDITIONS ------------------------------------- Balance (1) (2) Balance at Beginning Charged to Costs Charged to Other Deductions- at End Description of Period and Expenses Accounts-Describe Describe of Period - --------------------------------------- ------------- ---------------- ----------=------- ---------------- ------------- Year ended February 28, 2001: Deduction from asset account: Allowance for doubtful accounts $ 19,245 $ 24,968 $ 25,002 (A) $ 21,247 (B) $ 47,968 ========== ========== ========== =========== ========== Allowance for sales returns $ 116,792 $ 362,885 $ 23,866 (A) $ 366,712 (C) $ 136,831 ========== ========== ========== =========== ========== Allowance for other assets $ 14,900 $ 6,483 $ 0 $ 6,483 $ 14,900 ========== ========== ========== =========== ========== Year ended February 29, 2000: Deduction from asset account: Allowance for doubtful accounts $ 15,583 $ 7,808 $ (9) (A) $ 4,137 (B) $ 19,245 ========== ========== ========== =========== ========== Allowance for sales returns $ 132,103 $ 282,170 $ 1,796 (A) $ 299,277 (C) $ 116,792 ========== ========== ========== =========== ========== Allowance for other assets $ 16,400 $ 0 $ 0 $ 1,500 $ 14,900 ========== ========== ========== =========== ========== Year ended February 28, 1999: Deduction from asset account: Allowance for doubtful accounts $ 15,661 $ 8,472 $ 91 (A) $ 8,641 (B) $ 15,583 ========== ========== ========== =========== ========== Allowance for sales returns $ 135,584 $ 342,267 $ 308 (A) $ 346,056 (C) $ 132,103 ========== ========== ========== =========== ========== Allowance for other assets $ 16,400 $ 0 $ 0 $ 0 $ 16,400 ========== ========== ========== =========== ==========
Note A: Includes translation adjustment on foreign subsidiary balances; business unit acquisitions for the year ended February 28, 2001 of $21,842 allowance for doubtful accounts and $26,460 allowance for sales returns; and other minor reclasses and adjustments. Note B: Accounts charged off, less recoveries. Note C: Sales returns charged to the allowance account for actual returns for the year. S - 1 EX-4.I.I.I 2 l85631aex4-i_ii.txt EXHIBIT 4(III) 1 Exhibit 4(iii) ================================================================================ AMENDED AND RESTATED CREDIT AGREEMENT by and among AMERICAN GREETINGS CORPORATION, as US Facility Borrower, CARLTON CARDS (FRANCE) S.N.C., CARLTON CARDS LIMITED, UK GREETINGS LIMITED, HANSON WHITE GROUP LIMITED and CAMDEN GRAPHICS LIMITED, as UK Facility Borrowers, CARLTON CARDS LIMITED, as Canadian Facility Borrower, JOHN SANDS (AUSTRALIA) LTD., JOHN SANDS (N.Z.) LTD. and JOHN SANDS HOLDING CORPORATION, as Australian Facility Borrowers, BANK OF AMERICA, N.A., as Global Agent and as Lender, BANK OF AMERICA INTERNATIONAL LIMITED, as UK Facility Agent, NATIONAL CITY BANK, as Global Co-Syndication Agent, US Facility Agent and as Lender, BANK ONE, MICHIGAN, as Global Co-Syndication Agent and as Lender, BANK ONE, NA, AUSTRALIA BRANCH, as Australian Facility Agent and as Lender, BANK ONE CANADA, as Canadian Facility Agent and as Lender, and THE LENDERS PARTY HERETO FROM TIME TO TIME August 3, 2000 ================================================================================ BANC OF AMERICA SECURITIES LLC, as Sole Lead Arranger and Sole Book Manager 2 TABLE OF CONTENTS
Page ---- ARTICLE I Definitions and Terms 1.01 Definitions..................................................................3 1.02 Rules of Interpretation.....................................................43 1.03 Amendment and Restatement...................................................43 ARTICLE II The US Facility 2.01 Advances....................................................................45 2.02 Payment of Interest.........................................................47 2.03 Payment of Principal........................................................47 2.04 Manner of Payment...........................................................48 2.05 US Facility Notes...........................................................48 2.06 Pro Rata Payments...........................................................48 2.07 Reductions..................................................................49 2.08 Conversions and Elections of Subsequent Interest Periods....................49 2.09 Facility Fee................................................................50 2.10 Deficiency Advances.........................................................50 2.11 Use of Proceeds.............................................................50 2.12 US Facility Extension.......................................................51 2.13 US Term Loan Option.........................................................51 2.14 Participations..............................................................52 2.15 Utilization Premium.........................................................52 ARTICLE III The UK Facility 3.01 Advances....................................................................53 3.02 Payment of Interest.........................................................56 3.03 Payment of Principal........................................................56 3.04 Manner of Payment...........................................................57 3.05 Evidence of Indebtedness....................................................58 3.06 Pro Rata Payments...........................................................58 3.07 Reductions..................................................................58 3.08 Conversions and Elections of Subsequent Interest Periods....................59 3.09 Facility Fee................................................................59 3.10 Deficiency Advances.........................................................59 3.11 Use of Proceeds.............................................................60 3.12 One Loan....................................................................60 3.13 Participations..............................................................61 3.14 Utilization Premium.........................................................61 ARTICLE IV The Canadian Facility 4.01 Advances....................................................................62 4.02 Payment of Interest.........................................................64 4.03 Payment of Principal........................................................66
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Page ---- 4.04 Manner of Payment...........................................................66 4.05 Evidence of Indebtedness....................................................67 4.06 Pro Rata Payments...........................................................67 4.07 Reductions..................................................................67 4.08 Conversions and Elections of Subsequent Interest Periods....................68 4.09 Facility Fee................................................................68 4.10 Deficiency Advances.........................................................69 4.11 Use of Proceeds.............................................................69 4.12 Canadian Facility Extension.................................................69 4.13 Canadian Term Loan Option...................................................70 4.14 Participations..............................................................71 4.15 Maximum Rate of Return......................................................71 4.16 Utilization Premium.........................................................72 ARTICLE V The Australian Facility 5.01 Advances....................................................................73 5.02 Payment of Interest.........................................................76 5.03 Payment of Principal........................................................76 5.04 Manner of Payment...........................................................77 5.05 Evidence of Indebtedness....................................................77 5.06 Pro Rata Payments...........................................................78 5.07 Reductions..................................................................78 5.08 Conversions and Elections of Subsequent Interest Periods....................78 5.09 Facility Fee................................................................79 5.10 Deficiency Advances.........................................................79 5.11 Use of Proceeds.............................................................80 5.12 One Loan....................................................................80 5.13 Participations..............................................................81 5.14 Utilization Premium.........................................................81 ARTICLE VI Changes in Circumstances 6.01 Increased Cost and Reduced Return...........................................82 6.02 Limitation on Types of Loans................................................83 6.03 Illegality..................................................................84 6.04 Treatment of Affected Loans.................................................84 6.05 Compensation................................................................85 6.06 Taxes.......................................................................85 6.07 Replacement Lender..........................................................88 6.08 Funding.....................................................................88 6.09 Economic and Monetary Union in the European Community.......................88 ARTICLE VII Conditions to Making Loans 7.01 Conditions of Initial Advance...............................................90 7.02 Conditions of Loans.........................................................92
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Page ---- ARTICLE VIII Representations and Warranties 8.01 Representations and Warranties as to Borrowers and Subsidiaries.............94 8.02 Representations and Warranties of the Company...............................95 ARTICLE IX Affirmative Covenants 9.01 Financial Reports, Etc.....................................................100 9.02 Debt Ratings...............................................................101 9.03 Maintain Properties........................................................101 9.04 Existence, Qualification, Etc..............................................101 9.05 Regulations and Taxes......................................................101 9.06 Insurance..................................................................101 9.07 True Books.................................................................102 9.08 Right of Inspection........................................................102 9.09 Observe all Laws...........................................................102 9.10 Covenants Extending to Subsidiaries........................................102 9.11 Officer's Knowledge of Default.............................................102 9.12 Suits or Other Proceedings.................................................102 9.13 Environmental Compliance...................................................102 9.14 Further Assurances.........................................................103 9.15 Continued Operations.......................................................103 9.16 Use of Proceeds............................................................103 ARTICLE X Negative Covenants 10.01 Consolidated Funded Indebtedness to Consolidated Total Capitalization......104 10.02 Consolidated EBIT to Consolidated Interest Expense.........................104 10.03 Liens......................................................................104 10.04 Transfer of Assets.........................................................105 10.05 Merger or Consolidation....................................................105 10.06 Transactions with Affiliates...............................................105 10.07 ERISA......................................................................106 10.08 Acquisitions...............................................................106 10.09 Negative Pledge............................................................107 10.10 Dissolution, Etc...........................................................107 10.11 Restrictive Agreements.....................................................107 ARTICLE XI Events of Default and Acceleration 11.01 Events of Default..........................................................108 11.02 Global Agent to Act........................................................110 11.03 Cumulative Rights..........................................................110 11.04 No Waiver..................................................................111 11.05 Allocation of Proceeds.....................................................111 11.06 Judgment Currency..........................................................111 11.07 Funding and Payment of Participations; Conversion to US Dollars............112
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Page ---- ARTICLE XII The Agents 12.01 Appointment, Powers, and Immunities........................................115 12.02 Reliance by Agents.........................................................115 12.03 Defaults...................................................................116 12.04 Rights as Lender...........................................................116 12.05 Indemnification............................................................117 12.06 Non-Reliance on Agents and Other Lenders...................................117 12.07 Resignation of an Agent...................................................117 12.08 Fees.......................................................................118 ARTICLE XIII Miscellaneous 13.01 Assignments and Participations.............................................119 13.02 Notices....................................................................121 13.03 Right of Set-off; Adjustments..............................................123 13.04 Survival...................................................................123 13.05 Expenses...................................................................124 13.06 Amendments and Waivers.....................................................124 13.07 Counterparts...............................................................125 13.08 Termination................................................................125 13.09 Usury Savings Clause.......................................................125 13.10 Indemnification; Limitation of Liability...................................126 13.11 Agreement Controls.........................................................127 13.12 Severability...............................................................127 13.13 Entire Agreement...........................................................127 13.14 Governing Law; Waiver of Jury Trial........................................128 13.15 Special Funding Option.....................................................129 EXHIBIT A Lenders' Commitments and Applicable Commitment Percentages.....................1 EXHIBIT B Form of Assignment and Acceptance..............................................1 EXHIBIT C Notice of Appointment (or Revocation) of Authorized Representative.............1 EXHIBIT D-1 Borrowing Notice (U.S. Facility Loans).......................................1 EXHIBIT D-2 Borrowing Notice (UK Facility Loans).........................................1 EXHIBIT D-3 Borrowing Notice (Canadian Facility Loans)...................................1 EXHIBIT D-4 Borrowing Notice (Australian Facility Loans).................................1 EXHIBIT E Form of Guaranty Agreement.....................................................1 EXHIBIT F Form of US Facility Note.......................................................1 EXHIBIT G Form of Opinion of Counsel for Borrowers and Guarantor.........................1
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Page ---- EXHIBIT H Form of Compliance Certificate............................................1 SCHEDULE 1.01 AUTHORIZED REPRESENTATIVES.................................................1 SCHEDULE 8.02(a) SUBSIDIARIES AND STOCKHOLDERS...........................................1 SCHEDULE 8.02(f) LITIGATION..............................................................1 SCHEDULE 10.03 EXISTING LIENS ...........................................................1 SCHEDULE 10.06 TRANSACTIONS WITH AFFILIATES..............................................1
v 7 AMENDED AND RESTATED CREDIT AGREEMENT THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 3, 2000 (the "Agreement"), is made by and among: AMERICAN GREETINGS CORPORATION, a corporation duly organized and existing under the laws of the State of Ohio (the "Company" and the "US Facility Borrower"); and CARLTON CARDS (FRANCE) S.N.C., a societe en nom collectif organized under the laws of France, registered with the Registry of Commerce and of Companies of La Courneuve under Number RCS B 387 702 954 ("Carlton France"); and CARLTON CARDS LIMITED (Registered No. 61412), UK GREETINGS LIMITED (Registered No. 3480710), HANSON WHITE GROUP LIMITED (Registered No. 3220599) and CAMDEN GRAPHICS LIMITED (Registered No. 1001272), each a corporation duly organized and existing under the laws of England and Wales (collectively, the "UK Subsidiaries" and, together with Carlton France, the "UK Facility Borrowers"); and CARLTON CARDS LIMITED, a corporation duly organized and existing under the laws of Ontario, Canada (the "Canadian Facility Borrower"); and JOHN SANDS (AUSTRALIA) LTD., JOHN SANDS HOLDING CORP. and JOHN SANDS (N.Z.) LTD., each a corporation duly organized and existing under the laws of Delaware and doing business in Australia (collectively, the "Australian Facility Borrowers"; the US Facility Borrower, the UK Facility Borrowers, the Canadian Facility Borrower and the Australian Facility Borrowers are sometimes referred to collectively as the "Borrowers" or individually as a "Borrower"); and BANK OF AMERICA, N.A., NATIONAL CITY BANK, BANK ONE, MICHIGAN, KEYBANK NATIONAL ASSOCIATION, ROYAL BANK OF CANADA, MELLON BANK, N.A., BARCLAYS BANK PLC and PNC BANK N.A., the lenders under the US Facility, and each other lender which may hereafter execute and deliver an instrument of assignment with respect to the US Facility under this Agreement pursuant to Section 13.01 (hereinafter such lenders may be referred to individually as a "US Facility Lender" or collectively as the "US Facility Lenders"); and BANK OF AMERICA CANADA, BANK ONE CANADA, ROYAL BANK OF CANADA and MELLON BANK CANADA, the lenders under the Canadian Facility, and each other lender which may hereafter execute and deliver an instrument of assignment with respect to the Canadian Facility under this Agreement pursuant to Section 13.01 (hereinafter such lenders may be referred to individually as a "Canadian Facility Lender" or collectively as the "Canadian Facility Lenders"); and BANK OF AMERICA, N.A., NATIONAL CITY BANK, PNC BANK, N.A., BARCLAYS BANK PLC and KEYBANK NATIONAL ASSOCIATION, the lenders under the UK Facility, and each other lender which may hereafter execute and deliver an instrument of 8 assignment with respect to the UK Facility under this Agreement pursuant to Section 13.01 (hereinafter such lenders may be referred to individually as a "UK Facility Lender" or collectively as the "UK Facility Lenders"); and BA AUSTRALIA LIMITED, BANK ONE, NA, AUSTRALIA BRANCH, and ROYAL BANK OF CANADA, the Lenders under the Australian Facility, and each other lender which may hereafter execute and deliver an instrument of assignment with respect to the Australian Facility under this Agreement pursuant to Section 13.01 (hereinafter such lenders may be referred to individually as an "Australian Facility Lender" or collectively as the "Australian Facility Lenders"; the US Facility Lenders, the Canadian Facility Lenders, the UK Facility Lenders and the Australian Facility Lenders are sometimes referred to collectively as the "Lenders" or individually as a "Lender"); and BANK ONE, MICHIGAN, in its capacity as global co-syndication agent for each of the Lenders; and NATIONAL CITY BANK, in its capacity as agent for the US Facility Lenders (the "US Facility Agent") and in its capacity as global co-syndication agent for each of the Lenders (together with Bank One, Michigan, the "Global Co-Syndication Agents"); and BANK OF AMERICA INTERNATIONAL LIMITED, a limited liability company authorized in England as a credit institution under the Banking Act 1987 ("BAIL"), in its capacity as agent for the UK Facility Lenders (the "UK Facility Agent"); and BANK ONE CANADA, in its capacity as agent for the Canadian Facility Lenders ("Bank One Canada" or the "Canadian Facility Agent"); and BANK ONE, NA, AUSTRALIA BRANCH, in its capacity as agent for the Australian Facility Lenders (the "Australian Facility Agent"); the US Facility Agent, the UK Facility Agent, the Canadian Facility Agent and the Australian Facility Agent are sometimes referred to collectively as the "Facility Agents" or individually as a "Facility Agent"); and BANK OF AMERICA, N.A., in its capacity as global administrative agent for each of the Lenders (the "Global Agent" and together with the Facility Agents and the Global Co-Syndication Agents, the "Agents"). W I T N E S S E T H: WHEREAS, the Borrowers, the Agents and certain of the Lenders have entered into that certain Credit Agreement dated as of August 7, 1998, as amended by Amendment No. 1 to Credit Agreement dated as of August 5, 1999 (as so amended, the "Existing Credit Agreement"), pursuant to which the Lenders have made available to the Borrowers revolving credit and term loan facilities, as evidenced under the US Facility (as hereinafter defined) by the promissory notes delivered in connection with the Existing Credit Agreement (the "Existing Notes"); and 2 9 WHEREAS, Bank of America, N.A. has resigned as Australian Facility Agent under the Existing Credit Agreement and has been replaced by Bank One, NA, Australia Branch; and WHEREAS, Bank of America Canada has resigned as Canadian Facility Agent under the Existing Credit Agreement and has been replaced by Bank One Canada; and WHEREAS, the Borrower has requested that the Lenders amend and restate the Existing Credit Agreement; and WHEREAS, subject to the terms and conditions herein stated, the Agents and the Lenders are willing to amend and restate the Existing Credit Agreement and to continue to make certain credit facilities available to the Borrower upon the terms and conditions set forth herein;. NOW, THEREFORE, in consideration of the mutual covenants and the fulfillment of the conditions set forth herein, and intending to be legally bound, the parties hereto do hereby agree that the Existing Credit Agreement is amended and restated in its entirety as follows: ARTICLE I Definitions and Terms 1.01 Definitions. For the purposes of this Agreement, in addition to the definitions set forth above, the following terms shall have the respective meanings set forth below: "Advance" means a US Facility Advance, a UK Facility Advance, a Canadian Facility Advance or an Australian Facility Advance, as the case may be. "Affected Loans" shall have the meaning therefor set forth in Section 6.04. "Affected Type" shall have the meaning therefor-set forth in Section 6.04. "Affiliate" means any Person (i) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the Company; or (ii) which beneficially owns or holds 10% or more of any class of the outstanding Voting Stock of the Company; or (iii) 10% or more of any class of the outstanding Voting Stock (or in the case of a Person which is not a corporation, 10% or more of the equity or other ownership interest) of which is beneficially owned or held by the Company. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of Voting Stock, by contract or otherwise. "Aggregate Commitment" means, with respect to any Lender, its US Facility Commitment and, as applicable, the US Dollar Equivalent Amount of the sum of its UK Facility Commitment, its Canadian Facility Commitment and its Australian Facility Commitment. 3 10 "Aggregate Credit Exposure" shall have the meaning therefor set forth in the definition of "Credit Exposure." "Aggregate Facility Credit Exposure" shall have the meaning therefor set forth in the definition of "Facility Credit Exposure." "Applicable Base Rate" means (i) with respect to all matters involving the US Facility, the US Facility Base Rate, (ii) with respect to all matters involving the Canadian Facility, the Canadian Facility Base Rate, and (iii) with respect to all matters involving the Australian Facility, the Australian Facility Base Rate. "Applicable Base Rate Loan" means a Loan bearing interest at an Applicable Base Rate. "Applicable Borrowers" means (i) with respect to all matters involving the US Facility, the US Facility Borrower, (ii) with respect to all matters involving the UK Facility, the UK Facility Borrowers, (iii) with respect to all matters involving the Canadian Facility, the Canadian Facility Borrower, and (iv) with respect to all matters involving the Australian Facility, the Australian Facility Borrowers. "Applicable Commitment Percentage" means, for each Lender, with respect to the Obligations hereunder arising in connection with each separate Facility and the Total Facilities, a fraction (expressed as a percentage), the numerator of which shall be the amount of such Lender's Aggregate Commitment and the denominator of which shall be the Total Commitment, each as of the date of determination, which Applicable Commitment Percentage for each Lender as of the Closing Date is as set forth in Exhibit A attached hereto and incorporated herein by reference; provided that the Applicable Commitment Percentages of each Lender shall be increased or decreased to reflect any assignments to or by such Lender effected in accordance with Section 13.01 hereof. "Applicable Currency" means (i) with respect to the US Facility, US Dollars, (ii) with respect to the UK Facility, British Pounds Sterling or, if the context requires either French Francs or euro, (iii) with respect to the Canadian Facility, Canadian Dollars and (iv) with respect to the Australian Facility, Australian Dollars or, if the context requires, New Zealand Dollars. "Applicable Facility Agent" means (i) with respect to all matters involving the US Facility, the US Facility Agent, (ii) with respect to all matters involving the UK Facility, the UK Facility Agent, (iii) with respect to all matters involving the Canadian Facility, the Canadian Facility Agent and (iv) with respect to all matters involving the Australian Facility, the Australian Facility Agent. "Applicable Facility Commitment" means, with respect to any Lender and any Facility, the obligation of such Lender to incur Facility Credit Exposure as an Applicable Lender or Participant in such Facility, as applicable, up to an aggregate principal amount 4 11 at any time outstanding equal to the product of such Lender's Applicable Commitment Percentage multiplied by the Applicable Total Facility Commitment, as the same may be increased or decreased from time to time pursuant to this Agreement. "Applicable Fronting Commitment" means, for any Lender, (i) with respect to the US Facility, such Lender's US Facility Fronting Commitment, if any, (ii) with respect to the UK Facility, such Lender's UK Facility Fronting Commitment, if any, (iii) with respect to the Canadian Facility, such Lender's Canadian Facility Fronting Commitment, if any, and (iv) with respect to the Australian Facility, such Lender's Australian Facility Fronting Commitment, if any. "Applicable Fronting Percentage" means (i) for each US Facility Lender, with respect to the Obligations hereunder arising in connection with the US Facility, a fraction (expressed as a percentage), the numerator of which shall be the amount of its US Facility Fronting Commitment and the denominator of which shall be the Total US Facility Commitment, each as of the date of determination, which Applicable Fronting Percentage for each US Facility Lender as of the Closing Date is as set forth in Exhibit A attached hereto and incorporated herein by this reference; (ii) for each UK Facility Lender, with respect to the Obligations hereunder arising in connection with the UK Facility, a fraction (expressed as a percentage), the numerator of which shall be the amount of its UK Facility Fronting Commitment and the denominator of which shall be the Total UK Facility Commitment, each as of the date of determination, which Applicable Fronting Percentage for each UK Facility Lender as of the Closing Date is as set forth in Exhibit A attached hereto and incorporated herein by this reference; (iii) for each Canadian Facility Lender, with respect to the Obligations hereunder arising in connection with the Canadian Facility, a fraction (expressed as a percentage), the numerator of which shall be the amount of its Canadian Facility Fronting Commitment and the denominator of which shall be the Total Canadian Facility Commitment, each as of the date of determination, which Applicable Fronting Percentage for each Canadian Facility Lender as of the Closing Date is as set forth in Exhibit A attached hereto and incorporated herein by this reference; and (iv) for each Australian Facility Lender, with respect to the Obligations hereunder arising in connection with the Australian Facility, a fraction (expressed as a percentage), the numerator of which shall be the amount of its Australian Facility Fronting Commitment and the denominator of which shall be the Total Australian Facility Commitment, each as of the date of determination, which Applicable Fronting Percentage for each Australian Facility Lender as of the Closing Date is as set forth in Exhibit A attached hereto and incorporated herein by this reference; provided that the Applicable Fronting Percentages of each Lender shall be increased or decreased to reflect any assignments to or by such Lender effected in accordance with Section 13.01 hereof. "Applicable Lenders" means (i) with respect to all matters involving the US Facility, the US Facility Lenders, (ii) with respect to all matters involving the UK Facility, the UK Facility Lenders, (iii) with respect to all matters involving the Canadian Facility, the Canadian Facility Lenders, and (iv) with respect to all matters involving the Australian Facility, the Australian Facility Lenders. 5 12 "Applicable Lending Office" means, for each Lender and for each Type and Applicable Currency of Loan, the "Lending Office" of such Lender (or of an affiliate of such Lender) designated for such Type and Applicable Currency of Loan on the signature pages hereof or in an Assignment and Acceptance, or such other office of such Lender (or an affiliate of such Lender) as such Lender may from time to time specify to the Applicable Facility Agent and the Applicable Borrowers by written notice in accordance with the terms hereof as the office by which its Loans of such Type and Applicable Currency are to be made and maintained. "Applicable Margin" means (i) for purposes of calculating the applicable interest rate for any Interest Period for each Offshore Rate Loan, and the applicable Facility Fee, under each of the UK Facility and the Australian Facility, and the applicable interest rate for any Interest Period for each Canadian Facility BA Rate Loan, and the applicable Facility Fee, under the Canadian Facility Full Maturity Tranche, that percent per annum set forth below opposite the Applicable Debt Rating Level (as hereinafter defined) as determined from the rating assigned to each class of long term senior unsecured indebtedness of the Company (the "Rated Debt") by S&P and Moody's (the "Debt Rating"), which shall be effective on the Closing Date and is thereafter subject to change beginning on the effective date of a change in the Applicable Debt Rating Level (the "Debt Rating Date"), and which shall continue until, but not including, the immediate next Debt Rating Date:
Applicable Applicable Margin Applicable Margin for Debt Rating Level for Loans Facility Fees ----------------------- ----------------- --------------------- Level S&P Moody's ----- --- ------- I A or higher A2 or higher .190% .085% II A- A3 .225% .10% III BBB+ Baa1 .275% .125% IV BBB Baa2 .375% .175% V BBB- or lower Baa3 or lower .550% .250%
; and (ii) for purposes of calculating the applicable interest rate for any Interest Period for each Eurodollar Rate Loan, and the applicable Facility Fee, under the US Facility, and the applicable interest rate for any Interest Period for each Canadian Facility BA Rate Loan, and the applicable Facility Fee, under the Canadian Facility Renewable Tranche, that percent per annum set forth below opposite the Applicable Debt Rating Level, which shall be effective on the Closing Date and is thereafter subject to change on each Debt Rating Date, and which shall continue until, but not including, the immediate next Debt Rating Date: 6 13
Applicable Applicable Margin Applicable Margin for Debt Rating Level For Loans Facility Fees ------------------------ ----------------- --------------------- Level S&P Moody's ----- --- ------- I A or higher A2 or higher .205% .070% II A- A3 .240% .085% III BBB+ Baa1 .300% .100% IV BBB Baa2 .400% .150% V BBB- or lower Baa3 or lower .575% .225%
The level for determining the Applicable Margin based on the Debt Ratings (the "Applicable Debt Rating Level") shall be determined by reference to the level in the charts that contains the Debt Ratings assigned by both S&P and Moody's, subject to the following: (i) In the event that the Debt Ratings assigned by S&P and Moody's differ by one rating level, the Applicable Debt Rating Level shall be determined by reference to the level in the charts above having the higher assigned Debt Rating without regard to the lower assigned Debt Rating. (ii) In the event that the Debt Ratings assigned by S&P and Moody's differ by more than one rating level, the Applicable Debt Rating Level shall be determined by reference to the Debt Rating which is one rating level lower than the higher assigned Debt Rating without regard to the lower assigned Debt Rating. By way of illustration under (i) above and not limitation, if S&P assigns a rating of A - (i.e., Level II) and Moody's assigns a rating of Baa1 (i.e., Level III), the Applicable Margin will be .225% (i.e., Level II); if S&P assigns a rating of A (i.e., Level I) and Moody's assigns a rating of Baa2 (i.e., Level IV), the Applicable Margin will be .225% (i.e., Level II). (iii) In the event that either S&P or Moody's (but not both) shall not make a Debt Rating of any class of Rated Debt, because it is no longer in the business of making Debt Ratings of senior long term unsecured indebtedness of any issuer or obligor, the Applicable Debt Rating Level shall be determined based on the Debt Rating provided by S&P or Moody's, whichever shall then maintain a current rating, of the Rated Debt and the rating provided by a nationally recognized securities rating agency selected by the Borrower and approved by the Agent, which shall be substituted for either S&P or Moody's, as the case may be (the "Alternative Rating Agency"), of the Rated Debt and the Alternative Rating Agency's equivalent rating levels shall be substituted for the Debt Rating levels of either S&P or Moody's, whichever shall no longer then make the applicable Debt Rating. 7 14 (iv) In the event that no Alternative Rating Agency shall make a rating of each class of Rated Debt and (A) only one of S&P or Moody's shall then make a Debt Rating, the Applicable Debt Rating Level shall be determined by the Debt Rating which is one level lower than the Debt Rating assigned by S&P or Moody's, as applicable (e.g., if only Moody's provides a Debt Rating and such Debt Rating is Level III, the Applicable Debt Rating Level shall be at Level IV); or (B) neither S&P nor Moody's shall then make a Debt Rating, the Applicable Debt Rating Level shall be Level V. The Global Agent shall notify each Facility Agent, within one (1) Business Day of the effectiveness of any change in the Applicable Margins, of such new Applicable Margin. "Applicable Rate" means the applicable interest rate for any Fixed Rate Loan or Floating Rate Loan available in a specific Facility as selected by the Applicable Borrower or otherwise applicable hereunder. "Applicable Reference Rate" means (i) for any Eurodollar Rate Loan made under the US Facility for any Interest Period therefor, the rate per annum determined by the US Facility Agent to appear on Telerate Page 3750 or other appropriate Telerate Page (or any successor page) as the London interbank offered rate for deposits in the Applicable Currency at approximately 11:00 A.M. (London, England time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the term "Applicable Reference Rate" shall mean, for any Eurodollar Rate Loan for any Interest Period therefor, the rate per annum determined by the US Facility Agent to appear on Reuters Screen LIBO Page as the London interbank offered rate for deposits in the Applicable Currency at approximately 11:00 A.M. (London, England time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates; and (ii) for any Offshore Rate Loan made in British Pounds Sterling under the UK Facility for any Interest Period therefor, the rate per annum equal to the sum of (a) LIBOR plus (b) the UK Facility Mandatory Cost, in each case on the first day of such Interest Period for a term comparable to such Interest Period; and (iii) for any Offshore Rate Loan made in French Francs or euro under the UK Facility for any Interest Period therefor, the rate per annum equal to LIBOR as of two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; 8 15 (iv) for any Offshore Rate Loan made in Australian Dollars under the Australian Facility for any Interest Period therefor, the rate per annum equal to the sum of (a) the Australian Bank Bill Swap Reference Rate plus (b) the additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) to the Australian Facility Lenders of complying with any reserve ratio requirement or analogous requirement of any central banking or financial regulatory authority imposed in respect of the funding or maintenance of the Australian Facility Commitments or the Australian Facility Loans; and (v) for any Offshore Rate Loan made in New Zealand Dollars under the Australian Facility for any Interest Period therefor, the rate per annum equal to the sum of (a) the New Zealand Bank Bill Reference Rate plus (b) the additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) to the Australian Facility Lenders of complying with any reserve ratio requirement or analogous requirement of any central banking or financial regulatory authority imposed in respect of the funding or maintenance of the Australian Facility Commitments or the Australian Facility Loans. "Applicable Reserve Requirement" means, at any time, for any Eurodollar Rate Loan the maximum rate at which reserves (including, without limitation, any marginal, special, supplemental or emergency reserves) are required to be maintained with respect thereto under regulations issued from time to time by the Board or other applicable banking regulator by the member banks of the Federal Reserve System against, "Eurocurrency liabilities" (as such term is defined in Regulation D). Without limiting the effect of the foregoing, the Applicable Reserve Requirement shall reflect any other reserves required to be maintained by such member banks with respect to (i) any category of liabilities which includes deposits by reference to which the applicable Eurodollar Rate or any other interest rate of a Loan is to be determined, or (ii) any category of extensions of credit or other assets which include Eurodollar Rate Loans. An Eurodollar Rate Loan shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credit for pro ration, exceptions or offsets that may be available from time to time to the applicable Lender. The rate of interest on Eurodollar Rate Loans shall be adjusted automatically on and as of the effective date of any change in the Applicable Reserve Requirement. "Applicable Total Facility Commitment" means (i) with respect to the US Facility, the Total US Facility Commitment, (ii) with respect to the UK Facility, the Total UK Facility Commitment, (iii) with respect to the Canadian Facility, the Total Canadian Facility Commitment and (iv) with respect to the Australian Facility, the Total Australian Facility Commitment. "Assignment and Acceptance" shall mean an Assignment and Acceptance substantially in the form of Exhibit B (with blanks appropriately filled in) delivered to 9 16 the Global Agent and the Applicable Facility Agents in connection with an assignment of a Lender's interest in a specific Facility under this Agreement pursuant to Section 13.01. "Australian Bank Bill Swap Reference Rate" means (i) for any date of determination with respect to any Interest Period for an Offshore Rate Loan made in Australian Dollars under the Australian Facility, (a) the rate (expressed as a percentage yield per annum to maturity) determined by the Australian Facility Agent to be the rate (rounded upwards, if necessary, to the nearest 0.01%) quoted as the average bid rate on the Reuters Monitor System page "BBSY" at or about 10:00 A.M. (Sydney, Australia time) on the first day of such Interest Period for bank accepted bills having a term equal to (or no more than two (2) Business Days shorter or longer than) such Interest Period, or (b) if (x) for any reason there is no average bid rate displayed on the Reuters Monitor System screen BBSY page for bank accepted bills of that term or (y) the basis on which such rates are displayed on the Reuters Monitor System screen BBSY page is changed and in the opinion of Australian Facility Agent those rates cease to reflect the Australian Facility Lenders' cost of funding to the same extent as at the date of this Agreement, then the rate (expressed as a percentage yield per annum to maturity) determined by Australian Facility Agent to be the average of the bid rates quoted to Australian Facility Agent by three Australian banks selected by Australian Facility Agent at or about that time on that day for the purchase of bills accepted by such banks having a face value amount equal to the principal amount of such Australian Facility Loan and a term as described in clause (i)(a) of this definition; provided that such buying rates must be for bills of exchange which are accepted by an Australian bank selected by Australian Facility Agent and which have a term equivalent to the relevant Interest Period; or (ii) for any date of determination for purposes of determining the Australian Facility Base Rate for an Offshore Rate Loan made in Australian Dollars under the Australian Facility, or in the event the Australian Bank Bill Swap Reference Rate cannot be determined as described in clause (i) of this definition, the rate determined by Australian Facility Agent to be the arithmetic mean (rounded upwards to the nearest 1/16th of one percent) of the rates, as supplied to Australian Facility Agent at its request, quoted by the Australian Facility Lenders to leading banks in the Australian interbank market at or about 10:00 A.M. (Sydney, Australia time) on such date for the offering of overnight deposits in Australian Dollars. "Australian Dollar Equivalent Amount" means, with respect to a specified amount of New Zealand Dollars, the amount of Australian Dollars into which such amount of New Zealand Dollars would be converted, based on the applicable Spot Rate of Exchange. "Australian Dollar Fronting Commitment" means, with respect to each Australian Facility Lender, at any date of determination, the obligation of such Lender to make Loans in Australian Dollars to the Australian Facility Borrowers on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Percentage for the Australian Facility multiplied by the Total Australian Dollar Commitment as of such date, as such fronting 10 17 commitment may be increased or decreased from time to time pursuant to this Agreement. "Australian Dollar Outstandings" means, at any date of determination, that portion of the Australian Facility Outstandings representing the aggregate principal amount of all Australian Facility Loans outstanding in Australian Dollars. "Australian Dollars" or "AUS $" means the lawful currency of Australia. "Australian Facility" means the facility described in Article V hereof providing for Loans to the Australian Facility Borrowers by the Australian Facility Lenders in the aggregate principal amount of the Total Australian Facility Commitment. "Australian Facility Advance" means a borrowing under the Australian Facility consisting of the aggregate principal amount of an Australian Facility Base Rate Loan or Offshore Rate Loan, as the case may be. "Australian Facility Agent" shall have the meaning therefor set forth in the introduction hereto. "Australian Facility Base Rate" means, for any day, the rate per annum equal to the Australian Bank Bill Swap Reference Rate in effect on such day for one-day borrowings in Australian Dollars. "Australian Facility Base Rate Loan" means a Loan for which the rate of interest is determined by reference to the Australian Facility Base Rate. "Australian Facility Borrowers" shall have the meaning therefor set forth in the introduction hereto. "Australian Facility Commitment" means, with respect to any Lender, such Lender's Applicable Facility Commitment for the Australian Facility. "Australian Facility Fronting Commitment" means, with respect to each Australian Facility Lender, the obligation of such Lender to make Loans to the Australian Facility Borrowers on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Percentage for the Australian Facility multiplied by the Total Australian Facility Commitment, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement, and shall consist of (but not be equal to the sum of the aggregate of) such Lender's Australian Dollar Fronting Commitment and its New Zealand Dollar Fronting Commitment. "Australian Facility Lenders" means those Lenders identified in the introduction hereto with respect to their making Australian Facility Loans on behalf of all the Lenders. 11 18 "Australian Facility Loans" means Loans, both Australian Facility Base Rate Loans and Offshore Rate Loans, made by the Australian Facility Lenders pursuant to Section 5.01 hereof. "Australian Facility Maximum Amount" means, with respect to each Australian Facility Borrower, 95% of the amount by which the fair value of its assets (determined at the lesser of fair valuation and present fair saleable value on an orderly basis) is in excess of the total amount of its liabilities, including without limitation Contingent Obligations, as of the Closing Date; provided, however, that if the calculation of Australian Facility Maximum Amount in the manner provided above as of the date payment is required of such Australian Facility Borrower pursuant to Article V would result in a greater positive number, then the Australian Facility Maximum Amount shall be such greater positive number. "Australian Facility New Zealand Dollar Tranche" means the facility described in Article V hereof providing for Loans funded in New Zealand Dollars to the Australian Facility Borrowers by the Australian Facility Lenders in an aggregate principal amount not to exceed the Total New Zealand Dollar Commitment. "Australian Facility Outstandings" means, at any date of determination, the Australian Dollar Outstandings plus the New Zealand Dollar Outstandings. "Authorized Representative" means in the case of each of the Company and the US Facility Borrower, the UK Facility Borrowers, the Canadian Facility Borrower and the Australian Facility Borrowers, any of those persons listed as such on Schedule 1.01 attached hereto, or any other person expressly designated by the Board of Directors (or the appropriate committee thereof) of the Company as an Authorized Representative for purposes of this Agreement, as set forth from time to time in a certificate in the form attached hereto as Exhibit C. "BAIL" shall have the meaning therefor set forth in the introduction hereto. "Bank of America" means Bank of America, N.A., a national banking association. "Bank One Canada" shall have the meaning therefor set forth in the introduction hereto. "Board" means the Board of Governors of the Federal Reserve System (or any successor body). "Borrowing Notice" means the request of the Authorized Representative of a Borrower to obtain an Advance or to elect a subsequent Interest Period for or Convert a Loan or Loans of any Type hereunder, as the obtaining of such Advance, such election or Conversion of such Loan or Loans shall be otherwise permitted herein. Any Borrowing Notice shall be binding on and irrevocable by a Borrower and shall be in writing and signed by the Authorized Representative of such Borrower in the form attached hereto as 12 19 Exhibit D-1 for US Facility Loans, Exhibit D-2 for UK Facility Loans, Exhibit D-3 for Canadian Facility Loans and Exhibit D-4 for Australian Facility Loans, as the case may be. "British Pounds Sterling" means the lawful currency of the United Kingdom of Great Britain and Northern Ireland and is subject to Section 6.09. "British Pounds Sterling Fronting Commitment" means, with respect to each UK Facility Lender, at any date of determination, the obligation of such Lender to make Loans in British Pounds Sterling to the UK Facility Borrowers on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Percentage for the UK Facility multiplied by the Total British Pounds Sterling Commitment as of such date, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement. "British Pounds Sterling Outstandings" means, at any date of determination, that portion of the UK Facility Outstandings representing the aggregate principal amount of all UK Facility Loans outstanding in British Pounds Sterling. "Business Day" means (i) with respect to all notices, determinations, fundings and payments in connection with US Facility Loans or not related to any particular Facility, or with respect to all notices, determinations, fundings and payments involving the Global Agent, any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the States of New York or Ohio or is a day on which banking institutions located in either such state are authorized or required by law or other governmental action to close, (ii) with respect to all notices, determinations, fundings and payments in connection with UK Facility Loans, any day on which banking institutions located in England are generally open for business, and which is a day on which dealings in the Applicable Currency are carried on, and with respect to notices, determinations, fundings and payments in or pertaining to euro, any day on which TARGET (Trans-European Automated Real-time gross settlement Express Transfer system) or any successor thereto is scheduled to be open for business; (iii) with respect to all notices, determinations, fundings and payments in connection with Canadian Facility Loans, any day, other than a Saturday, Sunday or other day on which commercial banks in New York City or San Francisco and in Toronto, Canada are authorized or required by law to close; (iv) with respect to all notices, determinations, fundings and payments in connection with Australian Facility Loans, any day, excluding Saturday, Sunday and any day which is a legal holiday under the laws of the Province of New South Wales, Australia or is a day on which banking institutions located in such Province are authorized or required by law or other governmental action to close, which is a day on which dealings in the Applicable Currency are carried on and on which commercial banks are open for business in, and on which dealings in Australian Dollars are carried on in, Hong Kong; and (v) with respect to all notices, determinations, fundings and payments in connection with any Eurodollar Rate Loan or Offshore Rate Loan, any day that is a Business Day described above for the applicable Facility and that is also a day 13 20 for trading by and between banks in the Applicable Currency in the applicable interbank Eurodollar Rate market or Offshore Rate market, as applicable. "Canadian Dollars" or "CAN $" means the lawful currency of Canada. "Canadian Facility" means the facility described in Article IV hereof providing for Loans to the Canadian Facility Borrower by the Canadian Facility Lenders in the aggregate principal amount of the Total Canadian Facility Commitment. "Canadian Facility Advance" means a borrowing under the Canadian Facility Full Maturity Tranche or the Canadian Facility Renewable Tranche consisting of the aggregate principal amount of a Canadian Facility Base Rate Loan or Canadian Facility BA Rate Loan, as the case may be. "Canadian Facility Agent" shall have the meaning therefor set forth in the introduction hereto. "Canadian Facility BA Rate" means, for any Interest Period for a Canadian Facility BA Rate Loan, the rate of interest per annum (rounded upwards, if necessary, to the next higher 1/100 of 1%) equal to the market bid rate determined by the Canadian Facility Agent for banker's acceptances (with a tenor comparable to such Interest Period and in an amount comparable to the Canadian Facility BA Rate Loan of Bank One Canada for such Interest Period) accepted by Bank One Canada on the first day of such Interest Period. "Canadian Facility BA Rate Loan" means a Canadian Facility Loan for which the rate of interest is determined by reference to the Canadian Facility Fixed BA Rate. "Canadian Facility Base Rate" means, for any day, for Canadian Facility Loans made by Canadian Facilities Lenders, the higher of (i) 0.50% per annum above the average 30 day bankers' acceptance rate as quoted on Reuters Service Page CDOR determined at 10:00 A.M. (Toronto, Canada time) on such day and (ii) that annual rate of interest designated by Bank One Canada as its "prime rate" and established and announced by Bank One Canada from time to time at its offices in Toronto, Canada as the reference rate for demand loans in Canadian Dollars made in Canada (the "prime rate" and other rates referred to above are rates set by Bank One Canada based upon various factors including Bank One Canada's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such announced rate). Any change in the reference rate announced by Bank One Canada shall take effect at the opening of business on the day specified in the public announcement of such change. "Canadian Facility Base Rate Loan" means a Loan for which the rate of interest is determined by reference to the Canadian Facility Base Rate. 14 21 "Canadian Facility Borrower" shall have the meaning therefor set forth in the introduction hereto. "Canadian Facility Commitment" means, with respect to any Lender, such Lender's Applicable Facility Commitment for the Canadian Facility. "Canadian Facility Fixed BA Rate" means, for any Interest Period for any Canadian Facility BA Rate Loan, the rate of interest per annum equal to the sum of the BA Rate for such Loan plus the Applicable Margin. "Canadian Facility Fronting Commitment" means, with respect to each Canadian Facility Lender, the sum of its Canadian Facility Renewable Tranche Fronting Commitment and its Canadian Facility Full Maturity Tranche Fronting Commitment. "Canadian Facility Full Maturity Tranche" means the facility described in Article IV hereof providing for Canadian Facility Loans to the Canadian Facility Borrower by the Canadian Facility Lenders from the Closing Date until the Total Facility Termination Date in the aggregate principal amount of the Canadian Facility Full Maturity Tranche Commitment. "Canadian Facility Full Maturity Tranche Commitment" means that portion of the Total Canadian Facility Commitment providing for Canadian Facility Loans to the Canadian Facility Borrower by the Canadian Facility Lenders in the aggregate principal amount equal to CAN $52, 500,000. "Canadian Facility Full Maturity Tranche Outstandings" means, at any date of determination, that portion of the Canadian Facility Outstandings representing the aggregate principal amount of all Canadian Facility Loans outstanding under the Canadian Facility Full Maturity Tranche. "Canadian Facility Full Maturity Tranche Fronting Commitment" means, with respect to each Canadian Facility Lender, the obligation of such Lender to make or Continue Loans to the Canadian Facility Borrower on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Commitment for the Canadian Facility multiplied by the Canadian Facility Full Maturity Tranche Commitment, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement. "Canadian Facility Lenders" means those Lenders identified in the introduction hereto with respect to their making Canadian Facility Loans on behalf of all the Lenders. "Canadian Facility Loans" means Loans, both Canadian Facility Base Rate Loans and Canadian Facility BA Rate Loans, made by the Canadian Facility Lenders pursuant to Article IV hereof. 15 22 "Canadian Facility Outstandings" means, at any date of determination, the aggregate principal amount of all Canadian Facility Loans then outstanding. "Canadian Facility Renewable Tranche" means the facility described in Article IV hereof providing for Canadian Facility Loans to the Canadian Facility Borrower by the Canadian Facility Lenders from the Closing Date until the Canadian Facility Renewable Tranche Termination Date in the aggregate principal amount of the Canadian Facility Renewable Tranche Commitment. "Canadian Facility Renewable Tranche Commitment" means that portion of the Total Canadian Facility Commitment providing for Canadian Facility Loans to the Canadian Facility Borrower by the Canadian Facility Lenders in the aggregate principal amount equal to (i) as of the Closing Date, CAN $52,500,000, and (ii) as of any subsequent date of determination thereof, such amount set forth in (i) above as the same may be reduced from time to time pursuant to Section 4.12 hereof. "Canadian Facility Renewable Tranche Extension Date" means August 2, 2001 and each date thereafter to which the Canadian Facility Renewable Tranche Termination Date has been extended, if any, pursuant to Section 4.12 hereof, but in no event later than the Total Facility Termination Date. "Canadian Facility Renewable Tranche Fronting Commitment" means, with respect to each Canadian Facility Lender, the obligation of such Lender to make or Continue Loans to the Canadian Facility Borrower on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Commitment for the Canadian Facility multiplied by the Canadian Facility Renewable Tranche Commitment, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement. "Canadian Facility Renewable Tranche Outstandings" means, at any date of determination, that portion of the Canadian Facility Outstandings representing the aggregate principal amount of all Canadian Facility Loans outstanding under the Canadian Facility Renewable Tranche. "Canadian Facility Renewable Tranche Termination Date" means the earlier of (i) August 2, 2001, or such later date with respect to the Unutilized Canadian Facility Renewable Tranche Commitment as the Canadian Facility Borrower and the Lenders shall agree in writing pursuant to Section 4.12 hereof, or (ii) the Total Facility Termination Date. "Canadian Facility Term Loan" shall have the meaning therefor-set forth in Section 4.13. "Canadian Facility Term Loan Facility" means the facility described in Section 4.13 hereof providing for the conversion of Canadian Facility Renewable Tranche 16 23 Outstandings on each Canadian Facility Renewable Tranche Extension Date to Canadian Facility Term Loans. "Canadian Facility Term Loan Outstandings" means, at any date of determination, that portion of the Canadian Facility Outstandings representing the aggregate principal amount of all Canadian Facility Loans outstanding under the Canadian Term Loan Facility. "Canadian Overnight Rate" means the rate of interest per annum determined by the Canadian Facility Agent at its head office in Toronto, Canada from time to time at which overnight deposits in Canadian Dollars, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by the Canadian Facility Agent to major banks in the Canadian interbank market. The Canadian Overnight Rate for any day which is not a Business Day shall be the Canadian Overnight Rate for the preceding Business Day. "Capital Leases" means all leases which have been or should be capitalized in accordance with Generally Accepted Accounting Principles as in effect from time to time including Statement No. 13 of the Financial Accounting Standards Board and any successor thereof. "Change of Control" means, at any time: (A) with respect to the Company: (i) any "person" or "group" (each as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) either (A) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of Voting Stock of the Company (or securities convertible into or exchangeable for such Voting Stock) representing 20% or more of the combined voting power of all Voting Stock of the Company (on a fully diluted basis) or (B) otherwise has the ability, directly or indirectly, to elect a majority of the board of directors of the Company; or (ii) during any period of up to 24 consecutive months, commencing on the Closing Date, individuals who at the beginning of such 24-month period were directors of the Company shall cease for any reason (other than the death, disability or retirement) to constitute a majority of the board of directors of the Company; and (B) with respect to any Borrower other than the Company, such Borrower ceases for any reason to be a wholly owned Subsidiary of the Company. "Closing Date" means the date as of which this Agreement is executed by the Borrowers, the Lenders and the Agents and on which the conditions set forth in Section 7.01 hereof have been satisfied. 17 24 "Code" means the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder. "Commitment" means, for any Lender, any of the Australian Facility Commitment, Canadian Facility Commitment, UK Facility Commitment and US Facility Commitment, as applicable. "Company" shall have the meaning therefor set forth in the introduction hereto. "Consistent Basis" in reference to the application of Generally Accepted Accounting Principles means the accounting principles observed in the period referred to are comparable in all material respects to those applied in the preparation of the audited financial statements of the Company referred to in Section 8.02(b)(i) hereof. "Consolidated EBIT" means, with respect to the Company and its Subsidiaries for the Four-Quarter Period ended on or immediately preceding the date of computation thereof, the sum of, without duplication, (i) Consolidated Net Income during such period, plus (ii) Consolidated Interest Expense during such period, (iii) plus taxes paid on income during such period, all determined on a consolidated basis in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. "Consolidated Funded Indebtedness" means all Indebtedness for Money Borrowed of the Company and its Subsidiaries, all determined on a consolidated basis in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. "Consolidated Interest Expense" means, with respect to any period of computation thereof, the gross interest expense of the Company and its Subsidiaries, including without limitation (i) the amortization of debt discounts, (ii) the amortization of all reserves and fees payable in connection with the incurrence of Indebtedness to the extent included in interest expense and (iii) the portion of any liabilities incurred in connection with Capital Leases allocable to interest expense, all determined on a consolidated basis in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. "Consolidated Net Income" means, with respect to any period of computation thereof, the gross revenues of the Company and its Subsidiaries less all operating and non-operating expenses thereof including taxes on income, all determined on a consolidated basis in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis; but excluding as income: (i) gains on the sale, conversion or other disposition of capital assets, (ii) gains on the acquisition, retirement, sale or other disposition of capital stock and other securities of the Company or any Subsidiary, (iii) gains on the collection of proceeds of life insurance policies, (iv) any write-up of any asset, and (v) any other gain or credit of an extraordinary nature as determined in 18 25 accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. "Consolidated Shareholders' Equity" means, at any time as of which the amount thereof is to be determined, the sum of the following in respect of the Company and its Subsidiaries (determined on a consolidated basis and excluding intercompany items among the Company and its Subsidiaries and any upward adjustment after the Closing Date due to revaluation of assets): (i) the amount of issued and outstanding share capital, plus (ii) the amount of additional paid-in capital and retained income (or, in the case of a deficit, minus the amount of such deficit), plus (iii) the amount of any foreign currency translation adjustment (if positive, or, if negative, minus the amount of such translation adjustment) minus (iv) the absolute value of any treasury stock, all determined in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. "Consolidated Total Capitalization" means the sum of Consolidated Shareholders' Equity and Consolidated Funded Indebtedness. "Contingent Obligation" of any Person means all contingent liabilities required (or which, upon the creation or incurring thereof, would be required) to be included in the consolidated financial statements (including footnotes) of such Person in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis, including Statement No. 5 of the Financial Accounting Standards Board, and any obligation of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including obligations of such Person however incurred: (1) to purchase such Indebtedness or other obligation or any property or assets constituting security therefor; (2) to advance or supply funds in any manner (i) for the purchase or payment of such Indebtedness or other obligation, or (ii) to maintain a minimum working capital, net worth or other balance sheet condition or any income statement condition of the primary obligor; (3) to grant or convey any lien, security interest, pledge, charge or other encumbrance on any property or assets of such Person to secure payment of such Indebtedness or other obligation; (4) to lease property or to purchase securities or other property or services primarily for the purpose of assuring the owner or holder of such Indebtedness or obligation of the ability of the primary obligor to make payment of such Indebtedness or other obligation; or (5) otherwise to assure the owner of the Indebtedness or such obligation of the primary obligor against loss in respect thereof. 19 26 With respect to Contingent Obligations (such as litigation, guarantees and pension plan liabilities), such liabilities shall be computed at the amount which, in light of all the facts and circumstances existing at the time, represent the amount which can reasonably be expected to become an actual or matured liability. "Continue", "Continuation", "Continuance" and "Continued" shall refer to the continuation pursuant to Sections 2.08, 3.08, 4.08 or 5.08 hereof of a Fixed Rate Loan from one Interest Period to the next Interest Period. "Convert", "Conversion" and "Converted" shall refer to a conversion pursuant to Sections 2.08, 3.08, 4.08 or 5.08 or Article VI of one Type of Loan into another Type of Loan. "Credit Exposure" means, with respect to any Lender, the aggregate principal amount of all outstanding Loans under the Total Facilities owing to such Lender, to the extent no other Lender has funded and paid for a Participation in such Loans, plus all Participations funded and paid for by such Lender in all other Loans under the Total Facilities, and "Aggregate Credit Exposure" means the sum of all Credit Exposures of all Lenders in the Total Facilities. "Debt Rating" shall have the meaning therefor set forth in the definition of "Applicable Margin." "Debt Rating Date" shall have the meaning therefor set forth in the definition of "Applicable Margin." "Default" means any event or condition which, with the giving or receipt of notice or lapse of time or both, would constitute an Event of Default hereunder. "Default Rate" means (i) with respect to each Eurodollar Rate Loan, each Offshore Rate Loan and each Canadian Facility BA Rate Loan, until the end of the Interest Period applicable thereto, a rate of two percent (2%) above the Eurodollar Rate, Offshore Rate or Canadian Facility Fixed BA Rate applicable to such Loan, and thereafter at a rate of interest per annum which shall be two percent (2%) above (A) in the case of US Facility Loans, Canadian Facility Loans or Australian Facility Loans, the Applicable Base Rate, and (B) in the case of UK Facility Loans, the Offshore Rate determined based on successive Interest Periods of one (1) month each; and (ii) with respect to each Applicable Base Rate Loan, at a rate of interest per annum which shall be two percent (2%) above the Applicable Base Rate. "Eligible Assignee" with respect to a specific Facility means (i) a Lender currently in such Facility; (ii) any other Lender, or an affiliate of any Lender, which, through its Applicable Lending Office, is capable of lending the Applicable Currency to the Applicable Borrowers without the imposition of any withholding or similar taxes; and (iii) any other Person which has and maintains an Investment Grade Rating and which, 20 27 through its Applicable Lending Office, is capable of lending the Applicable Currency to the Applicable Borrowers without the imposition of any withholding or similar taxes and which is approved by the Applicable Facility Agent, the Global Agent and, unless an Event of Default has occurred and is continuing at the time any assignment is effected in accordance with Section 13.01, the Company, such approval not to be unreasonably withheld or delayed by the Company, the Applicable Facility Agent or the Global Agent and such approval to be deemed given by the Company if no objection is received by the assigning Lender, the Applicable Facility Agent and the Global Agent from the Company within two (2) Business Days after notice of such proposed assignment has been provided by the assigning Lender to the Company; provided, however, that neither the Company nor an affiliate of the Company shall qualify as an Eligible Assignee; provided further, however, that the Company may withhold approval hereunder in its sole discretion if such assignment would give rise to the payment of any additional costs under Article VI. "Employee Benefit Plan" means (i) any employee benefit plan, including any Pension Plan, within the meaning of Section 3(3) of ERISA which (A) is maintained for employees of the Company, any of its ERISA Affiliates or any Subsidiary, (B) is assumed by the Company, any of its ERISA Affiliates or any Subsidiary, in connection with any acquisition of another Person or (C) has at any time been maintained for the employees of the Company, or any current or former ERISA Affiliate or any Subsidiary, or (ii) any plan, arrangement, understanding or scheme maintained by the Company or any Subsidiary that provides retirement, deferred compensation, employee or retiree medical or life insurance, severance benefits or any other benefit covering any employee or former employee and which is administered under any Foreign Benefit Law or regulated by any Governmental Authority other than the United States of America. "EMU Legislation" means (a) a Treaty on European Union (the Treaty of Rome of March 25, 1957, as amended by the Single European Act 1986 and the Maastricht Treaty (which was signed at Maastricht on February 1, 1992 and came into force on November 1, 1993)), and (b) legislative measures of the European Council (including without limitation European Council regulations) for the introduction of, changeover to or operation of the euro, in each case as amended or supplemented from time to time. "Environmental Laws" means, collectively, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act, the Toxic Substances Control Act, as amended, the Clean Air Act, as amended, the Clean Water Act, as amended, any other "Superfund" or "Superlien" law or any other federal or applicable state, local or foreign statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in effect. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute and all rules and regulations promulgated thereunder. 21 28 "ERISA Affiliate", as applied to the Company, means any Person or trade or business which is a member of a group which is under common control with the Company, who, together with the Company, is treated as a single employer within the meaning of Section 414(b), (c), (m) or (o) of the Code. "euro" means the single official non-legacy currency denominated as the euro and constituting legal tender for the payment of public and private debts in the Participating Member States. "Eurodollar Rate" means, for the Interest Period for any Eurodollar Rate Loan, the rate of interest per annum determined pursuant to the following formula: Eurodollar = Applicable Reference Rate + Applicable ---------------------------------- Rate 1 - Applicable Reserve Requirement Margin "Eurodollar Rate Loan" means a US Facility Loan for which the rate of interest is determined by reference to the Eurodollar Rate. "euro Equivalent Amount" means, with respect to a specified amount of British Pounds Sterling, the amount of euro into which such amount of British Pounds Sterling would be converted, based on the applicable Spot Rate of Exchange. "euro Outstandings" means, at any date of determination, that portion of the UK Facility Outstandings representing the Sterling Equivalent Amount of the aggregate principal amount of all UK Facility Loans outstanding in euro under the UK Facility Alternative Currency Tranche. "Event of Default" means any of the occurrences set forth as such in Section 11.01 hereof and the expiration of any applicable notice or cure period. "Facility" means any of the US Facility, UK Facility, Canadian Facility and Australian Facility, as the context may require. "Facility Credit Exposure" means, with respect to any Lender and any Facility, the aggregate principal amount of all outstanding Loans under such Facility owing to such Lender, to the extent no other Lender has funded and paid for a Participation in such Loans, plus all Participations funded and paid for by such Lender in all other Loans under such Facility, and "Aggregate Facility Credit Exposure" means the sum of all Facility Credit Exposures of all Lenders in a specific Facility. "Facility Fee" means that fee set forth in Sections 2.09, 3.09, 4.09 and 5.09, respectively, payable in US Dollars for each separate Facility. 22 29 "Facility Participation Amount" means, with respect to a Lender and a specific Facility, that amount of Participations of such Lender in such Facility as defined in Sections 2.14, 3.13, 4.14 and 5.13, respectively. "Facility Participation Payment Date" shall have the meaning therefor set forth in Section 11.07. "Federal Funds Effective Rate" means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to the Applicable Facility Agent (in its individual capacity) on such day on such transactions as determined by the Applicable Facility Agent. "Fiscal Year" means the 12 month period of the Company commencing on March 1 of each calendar year and ending on the last day of February of the immediately following calendar year. "Fixed Rate Loan" means any or all, as the context may require, of Eurodollar Rate Loans, Offshore Rate Loans and Canadian Facility BA Rate Loans. "Floating Rate Loan" means any one or more, as the context may require, of US Facility Base Rate Loans, Canadian Facility Base Rate Loans and Australian Facility Base Rate Loans. "Foreign Benefit Law" means any applicable statute, law, ordinance, code, rule, regulation, order or decree of any foreign nation or any province, state, territory, protectorate or other political subdivision thereof regulating, relating to, or imposing liability or standards of conduct concerning any pension, retirement, health care, death, disability or other employee benefit plan. "Four-Quarter Period" means a period of four full consecutive fiscal quarters of the Company and its Subsidiaries, taken together as one accounting period. "French Francs" means the official legacy currency of the Republic of France and is subject to Section 6.09. "French Franc Equivalent Amount" means, with respect to a specified amount of British Pounds Sterling, the amount of French Francs into which such amount of British Pounds Sterling would be converted, based on the applicable Spot Rate of Exchange. 23 30 "French Franc Outstandings" means, at any date of determination, that portion of the UK Facility Outstandings representing the Sterling Equivalent Amount of the aggregate principal amount of all UK Facility Loans outstanding in French Francs under the UK Facility Alternative Currency Tranche. "Funding Bank" means, with respect to the UK Facility, (i) any banking institution located within France that is approved by the UK Facility Agent and is capable of making UK Facility Advances in French Francs to the UK Facility Borrowers, or (ii) any banking institution located within France that is approved by the UK Facility Agent and is capable of making UK Facility Advances in euro to the UK Facility Borrowers. "Further Taxes" means any and all present or future taxes, levies, assessments, imposts, duties, deductions, fees, withholdings or similar charges (including, without limitation, net income taxes and franchise taxes), and all liabilities with respect thereto, imposed by any jurisdiction on account of amounts payable or paid pursuant to Section 6.06. "GAAP" or "Generally Accepted Accounting Principles" means those generally accepted principles of accounting set forth in pronouncements of the Financial Accounting Standards Board, the Accounting Principles Board or the American Institute of Certified Public Accountants or which have other substantial authoritative support and are applicable in the circumstances as of the date of a report, as such principles are from time to time supplemented and amended, subject to compliance at all times with Section 1.02 hereof. "Global Agent" shall have the meaning therefor set forth in the introduction hereto. "Global Co-Syndication Agent" shall have the meaning therefor set forth in the introduction hereto. "Governmental Authority" means any federal, state, municipal, national or other governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a state of the United States, the United States, or a foreign entity or government. "Guarantor" means the Company in its capacity as a party to the Guaranty. "Guaranty" means the unconditional Amended and Restated Guaranty Agreement in favor of the Lenders in substantially the form attached hereto as Exhibit E delivered to the Global Agent in accordance with Article VII hereof pursuant to which the Guarantor guarantees the payment and performance of all Obligations to the Lenders as more specifically set forth in such Guaranty. 24 31 "Hazardous Material" means and includes any hazardous, toxic or dangerous waste, substance or material, the generation, handling, storage, disposal, treatment or emission of which is subject to any Environmental Law in effect on any date. "Hedging Obligations" means any and all obligations of the Company and its Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all agreements, devices or arrangements designed to protect at least one of the parties thereto from the fluctuations of interest rates, exchange rates or forward rates applicable to such party's assets, liabilities or exchange transactions, including, but not limited to, dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts, warrants and those commonly known as interest rate "swap" agreements; and (b) any and all cancellations, buybacks, reversals, terminations or assignments of any of the foregoing. "Indebtedness" means, with respect to any Person, all Indebtedness for Money Borrowed of such Person, all indebtedness of such Person for the acquisition of property, including the deferred purchase price of such property, other than purchases of products and merchandise in the ordinary course of business so long as payment therefor is due within one year, indebtedness secured by any Lien on the property of such Person whether or not such indebtedness is assumed, all liability of such Person by way of endorsements (other than for collection or deposit in the ordinary course of business); all Contingent Obligations of such Person, including the undrawn face amount of, and unpaid reimbursement obligations in respect of, all letters of credit issued for the account of such Person, obligations occurring under acceptance facilities and Hedging Obligations; all Capital Leases of such Person, and other items which in accordance with Generally Accepted Accounting Principles are classified as liabilities on a balance sheet; provided that in no event shall the term Indebtedness include capital stock, surplus and retained earnings, minority interest in the common stock of Subsidiaries, lease obligations (other than pursuant to Capital Leases), reserves for deferred income taxes and investment credits, other deferred credits and reserves, and deferred compensation obligations. "Indebtedness for Money Borrowed" means, for any Person, (i) all indebtedness, obligations and liabilities of such Person for money borrowed which are evidenced by bonds, debentures, notes or other similar instruments, and (ii) all Capital Leases which have been capitalized in accordance with Generally Accepted Accounting Principles; provided, however, the term "Indebtedness for Money Borrowed" shall specifically exclude payroll indebtedness and trade indebtedness incurred in the ordinary course of business (including trade indebtedness through financial intermediaries) provided such trade indebtedness has a maturity of less than one year. "Interest Period" for each Fixed Rate Loan means a period commencing on the date such Fixed Rate Loan is made, Continued or Converted and each subsequent period 25 32 commencing on the last day of the immediately preceding Interest Period for such Fixed Rate Loan and ending, at the Applicable Borrower's option, for any Fixed Rate Loan, on the date one, two, three or six months thereafter as notified to the Applicable Facility Agent in compliance with the provisions of such Facility as set forth in Articles II, III, IV and V, respectively, by an Authorized Representative of such Borrower prior to the beginning of such Interest Period; provided, that, (i) if the Authorized Representative of such Borrower fails to notify the Applicable Facility Agent of the length of an Interest Period in compliance with the provisions of such Facility as set forth in Article II, Article III, Article IV or Article V, respectively, the Fixed Rate Loan for which such Interest Period was to be determined shall be deemed to be (A) in the case of a US Facility Loan, Canadian Facility Loan or Australian Facility Loan, an Applicable Base Rate Loan or (B) in the case of a UK Facility Loan, an Offshore Rate Loan with an Interest Period of one month, in each case as of the first day thereof; (ii) if an Interest Period would end on a day which is not a Business Day, such Interest Period shall be extended to the next Business Day (unless such extension would cause the applicable Interest Period to end in the succeeding calendar month, in which case such Interest Period shall end on the next preceding Business Day); (iii) there shall not be more than (A) ten (10) Interest Periods in effect on any day in respect of US Facility Loans, (B) ten (10) Interest Periods in effect on any day in respect of UK Facility Loans, (C) ten (10) Interest Periods in effect on any Canadian Facility Loans and (D) four (4) Interest Periods in effect on any day in respect of Australian Facility Loans; (iv) any Interest Period which 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; (v) no Interest Period shall extend past the Total Facility Termination Date, the US Facility Revolving Credit Termination Date (for US Facility Loans under the US Facility Revolving Credit Facility) or the Canadian Facility Renewable Tranche Termination Date (for Canadian Facility Loans under the Canadian Facility Renewable Tranche). "Investment Grade Rating" means a rating of BBB or higher from S&P and a rating of Baa2 or higher from Moody's. "Lender Affiliate" means (i) with respect to the Total Facilities, an affiliate or agent of any Lender, which affiliate or agent is currently in the business of, and capable of, performing the duties of the Global Agent and which is approved to be a successor Global Agent by the Required Lenders under the Total Facilities, the Facility Agents and, 26 33 unless an Event of Default has occurred and is continuing at the time any assignment is effected in accordance with Section 13.01, the Company, such approval not to be unreasonably withheld or delayed by the Company, the Required Lenders under the Total Facilities and the Facility Agents and such approval to be deemed given by the Company if no objection is received by the Required Lenders under the Total Facilities from the Company within two (2) Business Days after request for approval of the Lender Affiliate as successor Global Agent has been provided by the Required Lenders under the Total Facilities to the Company and (ii) with respect to a specific Facility, an affiliate or agent of any Lender currently in such Facility, which affiliate or agent is currently in the business of, and capable of, performing the duties of the Applicable Facility Agent and which is approved to be a successor Applicable Facility Agent by the Global Agent, the Required Lenders under the Applicable Facility and, unless an Event of Default has occurred and is continuing at the time any assignment is effected in accordance with Section 13.01, the Company, such approval not to be unreasonably withheld or delayed by the Company, the Required Lenders under the Applicable Facility or the Global Agent and such approval to be deemed given by the Company if no objection is received by the Global Agent from the Company within two (2) Business Days after request for approval of the Lender Affiliate as a successor Applicable Facility Agent has been provided by the Global Agent to the Company; provided, however, that neither the Company nor an affiliate of the Company shall qualify as a Lender Affiliate. "Lenders" shall have the meaning therefor set forth in the introduction hereto. "LIBOR" means, for any date of determination with respect to any Interest Period for an Offshore Rate Loan made under the UK Facility, (i) the rate per annum equal to the rate determined by the UK Facility Agent to be the offered rate which appears on the page of the Telerate Screen which displays an average British Bankers Association Interest Settlement Rate (such page currently being page number 3740 or 3750) for deposits (for delivery on the first day of such period) with a term equivalent to such period in the Applicable Currency, determined as of approximately 11:00 A.M. (London, England time) on such date of determination, or (ii) in the event the rate referenced in the preceding clause (i) does not appear on such page or service or if such page or service shall cease to be available, the rate per annum equal to the rate determined by the UK Facility Agent to be the offered rate on such other page or other service which displays an average British Bankers Association Interest Settlement Rate for deposits (for delivery on the first day of such period) with a term equivalent to such period in the Applicable Currency, determined as of approximately 11:00 A.M. (London, England time) on such date of determination, or (iii) in the event the rates referenced in the preceding clauses (i) and (ii) are not available, the rate per annum equal to the offered quotation rate to first class banks in the London interbank market by Bank of America, N.A. for deposits (for delivery on the first day of the relevant period) in the Applicable Currency of amounts in Same Day Funds comparable to the principal amount of the UK Facility Loan of such UK Facility Agent for which LIBOR is then being determined with maturities comparable to such period as of approximately 11:00 A.M. (London, England time) on such date of determination. 27 34 "Lien" means any interest in property securing any obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on the common law, statute or contract, and including but not limited to the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes. "Loan" or "Loans" means any of the Fixed Rate Loans or Floating Rate Loans, as the context may require. "Loan Documents" means this Agreement, the Notes, the Guaranty and all other instruments and documents heretofore or hereafter executed or delivered to and in favor of any Lenders or any Agents in connection with the Loans made under this Agreement, as the same may be amended, modified or supplemented from time to time. "Loan Parties" means, collectively, each Borrower and the Guarantor. "Material Adverse Effect" means a material adverse effect on (i) the business, assets, operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries on a consolidated basis or (ii) the ability of any of the Loan Parties to perform their obligations and pay all amounts due hereunder or (iii) the ability of any Agent or any Lender to enforce any of their rights or to collect any of the Outstandings then due and payable. "Moody's" means Moody's Investors Services, Inc. "Multiemployer Plan" means an employee pension benefit plan covered by Title IV of ERISA and in respect of which the Company or any Subsidiary is an "employer" as described in Section 4001(b) of ERISA, which is also a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "National City Bank" means National City Bank, a national banking association. "New Zealand Bank Bill Reference Rate" means (i) for any date of determination with respect to any Interest Period for an Offshore Rate Loan made in New Zealand Dollars under the Australian Facility, (a) the rate (expressed as a percentage yield per annum to maturity) determined by the Australian Facility Agent to be the arithmetic mean (rounded upwards, if necessary, to the nearest 0.01%) of the bid rates on the page entitled "BKBM" (or such supplemental or other page of the Reuters Monitor System for displaying quotations of New Zealand Bank Bills) on the Reuters Monitor Money Rates Service at or about 10:00 A.M. (Sydney, Australia time) on the first day of such Interest Period for bank accepted bills having a term equal to (or no more than two (2) Business Days shorter or longer than) such Interest Period, or (b) if (x) for any reason there is no average bid rate displayed on the Reuters Monitor System screen page entitled BKBM for bank accepted bills of that term or (y) the basis on which such rates are displayed on the Reuters Monitor System screen page entitled BKBM is changed and in the opinion of Australian Facility Agent those rates cease to reflect the Australian Facility Lenders' cost 28 35 of funding to the same extent as at the date of this Agreement, then the rate (expressed as a percentage yield per annum to maturity) determined by Australian Facility Agent to be the average of the bid rates quoted to Australian Facility Agent by three banks selected by Australian Facility Agent at or about that time on that day for the purchase of bills accepted by such banks having a face value amount equal to the principal amount of such Australian Facility Loan and a term as described in clause (i)(a) of this definition; provided that such buying rates must be for bills of exchange which are accepted by a bank selected by Australian Facility Agent and which have a term equivalent to the relevant Interest Period; or (ii) for any date of determination for purposes of determining the Australian Facility Base Rate for an Offshore Rate Loan made in New Zealand Dollars under the Australian Facility, or in the event the New Zealand Bank Bill Reference Rate cannot be determined as described in clause (i) of this definition, the rate determined by Australian Facility Agent to be the arithmetic mean (rounded upwards to the nearest 1/16th of one percent) of the rates, as supplied to Australian Facility Agent at its request, quoted by the Australian Facility Lenders to leading banks in the New Zealand interbank market at or about 10:00 A.M. (Sydney, Australia time) on such date for the offering of overnight deposits in New Zealand Dollars. "New Zealand Dollar Equivalent Amount" means, with respect to a specified amount of Australian Dollars, the amount of New Zealand Dollars into which such amount of Australian Dollars would be converted, based on the applicable Spot Rate of Exchange. "New Zealand Dollar Fronting Commitment" means, with respect to each Australian Facility Lender, the obligation of such Lender to make Loans in New Zealand Dollars to the Australian Facility Borrowers on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of the Lender's Applicable Fronting Percentage for the Australian Facility multiplied by the Total New Zealand Dollar Commitment, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement. "New Zealand Dollar Outstandings" means, at any date of determination, that portion of the Australian Facility Outstandings representing the Australian Dollar Equivalent Amount of the aggregate principal amount of all Australian Facility Loans outstanding in New Zealand Dollars under the Australian Facility New Zealand Dollar Tranche. "New Zealand Dollars" or "NZ $" means the lawful currency of New Zealand. "Non-Australian Lender" shall have the meaning therefor set forth in Section 6.06(i). "Non-Canadian Lender" shall have the meaning therefor set forth in Section 6.06(h). 29 36 "Notes" means, collectively, the US Facility Notes and any promissory notes that may be issued by an Applicable Borrower and delivered to an Applicable Lender in a Facility other than the US Facility at the request of such Lender. "Obligations" means the obligations, liabilities and Indebtedness of the Borrowers with respect to (i) the principal and interest on the Loans as evidenced by the Notes and on the records of the Applicable Facility Agents, (ii) all liabilities of any Borrower to any Lender or any affiliate of a Lender which arise under a Swap Agreement, and (iii) the payment and performance of all other fees, indemnities, expenses, obligations, liabilities and Indebtedness of the Borrowers to the Lenders or the Agents, under this Agreement, under any one or more of the other Loan Documents or with respect to the Loans. "Offshore Currency" means any of British Pounds Sterling, French Francs, euro, Canadian Dollars, Australian Dollars and New Zealand Dollars. "Offshore Rate" means, for the Interest Period for any Offshore Rate Loan, the rate of interest per annum determined pursuant to the following formula: Offshore Rate = Applicable Reference Rate + Applicable Margin "Offshore Rate Loan" means a UK Facility Loan or Australian Facility Loan for which the rate of interest is determined by reference to the Offshore Rate. "Operating Documents" means with respect to any corporation, limited liability company, partnership, limited partnership, limited liability partnership or other legally authorized incorporated or unincorporated entity, the bylaws, operating agreement, partnership agreement, limited partnership agreement or other applicable documents relating to the operation, governance or management of such entity. "Organizational Action" means with respect to any corporation, limited liability company, partnership, limited partnership, limited liability partnership or other legally authorized incorporated or unincorporated entity, any corporate, organizational or partnership action (including any required shareholder, member or partner action), or other similar official action, as applicable, taken by such entity. "Organizational Documents" means with respect to any corporation, limited liability company, partnership, limited partnership, limited liability partnership or other legally authorized incorporated or unincorporated entity, the articles of incorporation, certificate of incorporation, articles of organization, certificate of limited partnership or other applicable organizational or charter documents relating to the creation of such entity. "Other Taxes" means any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery, performance, enforcement or 30 37 registration of, or otherwise with respect to, this Agreement or any other Loan Documents. "Outstandings" means, collectively, the US Facility Outstandings, the UK Facility Outstandings, the Canadian Facility Outstandings and the Australian Facility Outstandings, and individually any of the foregoing as the context may require. "Participating Member State" means each country which from time to time becomes a Participating Member State as described in EMU Legislation. "Participation" means, with respect to any Facility, the principal amount purchased and funded by each Lender in the Loans and Outstandings under such Facility pursuant to and in accordance with the terms of Sections 2.14, 3.13, 4.14, 5.13 and 11.07 and "Participate" and "Participant" shall have correlative meanings. "PBGC" means the Pension Benefit Guaranty Corporation and any successor thereto. "Pension Plan" means any employee pension benefit plan within the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of the Code and which (i) is maintained for employees of the Company or any of its ERISA Affiliates or is assumed by the Company or any of its ERISA Affiliates in connection with any acquisition or (ii) has at any time been maintained for the employees of the Company or any current or former ERISA Affiliate. "Permitted Acquisition" means the acquisition by the Company or a Subsidiary of a controlling equity interest in or all or substantially all of the assets of any Person, which satisfies each of the following: (i) such Person is in the same or similar line or lines of business as that engaged in by the Company and its Subsidiaries; and (ii) no Default or Event of Default has occurred and is continuing at the time of, or is created or results from, such transaction. "Person" means an individual, limited liability company, partnership, corporation, trust, unincorporated organization, association, joint venture or other entity or a government or agency or political subdivision thereof. "Principal Office" means, as the context may require, (i) the principal office of the US Facility Agent located at 1900 East Ninth Street, Cleveland Ohio 44114, (ii) the principal office of the UK Facility Agent located at 1 Alie Street, London E1 8DE, England, (iii) the principal office of the Canadian Facility Agent located at 161 Bay Street, STE 4240, Toronto, Ontario M5J 2S1 Canada and (iv) the principal office of the Australian Facility Agent located at 90 Collins Street 19th Floor, STE-NMELB-1, Melbourne, Australia, or such other office and address as any such Facility Agent may from time to time designate. 31 38 "Rated Debt" shall have the meaning therefor set forth in the definition of "Applicable Margin." "Register" shall have the meaning therefor set forth in Section 13.01(b). "Regulation D" means Regulation D of the Board as the same may be amended or supplemented from time to time. "Regulatory Change" means any change effective after the Closing Date in United States federal or state laws or regulations (including Regulation D and capital adequacy regulations), English laws or regulations, Canadian federal or provincial laws or regulations, Australian federal or provincial laws or regulations, or other foreign laws or regulations or the adoption or making after such date of any interpretations, directives or requests applying to a class of banks, which includes any of the Lenders, under any United States federal or state, English, Canadian federal or provincial, Australian federal or provincial or other foreign laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof or compliance by any Lender with any request or directive regarding capital adequacy, whether or not having the force of law, whether or not failure to comply therewith would be unlawful and whether or not published or proposed prior to the Closing Date. "Required Fronting Lenders" shall have the meaning therefor set forth in Section 11.07(a). "Required Lenders" means, as of any date, (i) at all times other than following the occurrence and during the continuation of an Event of Default, (A) with respect to the Total Facilities, Lenders on such date, without distinction or preference as between any of the Facilities, having Aggregate Commitments under the Total Facilities aggregating more than 50% of the Total Commitment on such date, and (B) with respect to any specific Facility, Lenders on such date having an Applicable Facility Commitment aggregating more than 50% of the Applicable Total Facility Commitment on such date and (ii) at all times following the occurrence and during the continuation of an Event of Default, (A) with respect to the Total Facilities, Lenders on such date, without distinction or preference as between any of the Facilities, having Credit Exposures aggregating more than 50% of the Aggregate Credit Exposure on such date, and (B) with respect to any specific Facility, Lenders on such date having Facility Credit Exposures aggregating more than 50% of the Aggregate Facility Credit Exposure on such date. For purposes of determining the vote of the Required Lenders above, (i) Bank of America shall be deemed to have the Aggregate Commitment, 32 39 Applicable Facility Commitments, Credit Exposure and Facility Credit Exposure of Bank of America Canada, BA Australia Limited and of each branch of Bank of America designated as a Lender hereunder, (ii) Mellon Bank, N.A. shall be deemed to have the Aggregate Commitment, Applicable Facility Commitments, Credit Exposure and Facility Credit Exposure of Mellon Bank Canada and each branch of Mellon Bank, N.A. designated as a Lender hereunder, and (iii) Bank One, Michigan shall be deemed to have the Aggregate Commitment, Applicable Facility Commitments, Credit Exposure and Facility Credit Exposure of Bank One Canada, Bank One, Michigan, Bank One, NA, Australia Branch, and each branch of Bank One, N.A. designated as a Lender hereunder. "Restricted Lender" shall have the meaning therefor set forth in Section 6.07. "Same Day Funds" means (i) with respect to disbursements and payments in US Dollars, immediately available funds, and (ii) with respect to disbursements and payments in an Offshore Currency, same day or other funds as may be determined by the Applicable Facility Agent to be customary in the place of disbursement or payment for the settlement of international banking transactions in such Offshore Currency. "S&P" means Standard & Poor's Rating Group, a division of McGraw-Hill Companies, Inc. "Solvent" means, when used with respect to any Person, that at the time of determination: (i) the fair value of its assets (both at fair valuation and at present fair saleable value on an orderly basis) is in excess of the total amount of its liabilities, including, without limitation, Contingent Obligations; and (ii) it is then able and expects to be able to pay its debts as they mature; and (iii) it has capital sufficient to carry on its business as conducted and as proposed to be conducted. "Spot Rate of Exchange" means (i) in determining the Sterling Equivalent Amount of a specified amount of French Francs as of any date under the UK Facility, the spot exchange rate determined by the UK Facility Agent in accordance with its usual procedures for the purchase by the UK Facility Agent of British Pounds Sterling with French Francs at approximately 11:00 A.M. (London, England time) on the Business Day that is three (3) Business Days prior to such date; (ii) in determining the Sterling Equivalent Amount of a specified amount of euro as of any date under the UK Facility, the spot exchange rate determined by the UK Facility Agent in accordance with its usual procedures for the purchase by the UK Facility Agent of British Pounds Sterling with euro at approximately 11:00 A.M. (London, England time) on the Business Day that is three (3) Business Days prior to such date; (iii) in determining the Australian Dollar Equivalent Amount of a specified amount of New Zealand Dollars as of any date under the Australian Facility, the rate quoted by the Australian Facility Agent in accordance with its customary procedures as the spot rate for the purchase by such Australian Facility Agent of Australian Dollars with New Zealand Dollars at approximately 11:00 A.M. (Sydney, Australia time), on such date as of which the foreign computation is made, for delivery two (2) Business Days later; (iv) in determining the French Franc Equivalent Amount of a specified amount of British Pounds Sterling as of any date under the UK 33 40 Facility, the spot exchange rate determined by the UK Facility Agent in accordance with its usual procedures for the purchase by the UK Facility Agent of French Francs with British Pounds Sterling at approximately 11:00 A.M. (London, England time) on the Business Day that is three (3) Business Days prior to such date; (v) in determining the euro Equivalent Amount of a specified amount of British Pounds Sterling as of any date under the UK Facility, the spot exchange rate determined by the UK Facility Agent in accordance with its usual procedures for the purchase by the UK Facility Agent of euro with British Pounds Sterling at approximately 11:00 A.M. (London, England time) on the Business Day that is three (3) Business Days prior to such date; (vi) in determining the New Zealand Dollar Equivalent Amount of a specified amount of Australian Dollars as of any date under the Australian Facility, the rate quoted by the Australian Facility Agent in accordance with its customary procedures as the spot rate for the purchase by such Australian Facility Agent of New Zealand Dollars with Australian Dollars at approximately 11:00 A.M. (Sydney, Australia time), on such date as of which the foreign computation is made, for delivery two (2) Business Days later; and (vii) in determining the US Dollar Equivalent Amount of a specified amount of any Applicable Currency as of any date, the spot rate of exchange determined by the Global Agent in accordance with its usual procedures for the purchase by the Global Agent of US Dollars with such Applicable Currency at approximately 11:00 A.M. (Charlotte, North Carolina time) on the Business Day that is two (2) Business Days prior to such date. "Sterling Equivalent Amount" means, (i) with respect to a specified amount of French Francs, the amount of British Pounds Sterling into which such amount of French Francs would be converted, based on the applicable Spot Rate of Exchange, or (ii) with respect to a specified amount of euro, the amount of British Pounds Sterling into which such amount of euro would be converted, based on the applicable Spot Rate of Exchange. "Subsequent Participant" means each country that adopts the euro as its lawful currency after January 1, 1999. "Subsidiary" means any Person in which more than 50% of its outstanding voting stock or rights or more than 50% of all equity interest is owned directly or indirectly by the Company. "Substitute Base Rate Loans" shall have the meaning therefor set forth in Section 6.04. "Swap Agreement" means one or more agreements with respect to Indebtedness evidenced by the Notes or Obligations under any Facility between one or more Borrowers and one or more Lenders, on terms mutually acceptable to such Borrower or Borrowers and such Lender or Lenders, which agreements create Hedging Obligations. "Taxes" means any and all present or future taxes, levies, assessments, imposts, duties, deductions, fees, withholdings or similar charges, and all liabilities with respect thereto, excluding, in the case of each Lender and each Agent, respectively, taxes imposed on or measured by its net income by the jurisdiction (or any political subdivision 34 41 thereof) under the laws of which such Lender or such Agent, as the case may be, is organized or maintains a lending office. "Termination Event" means: (i) a "Reportable Event" described in Section 4043 of ERISA and the regulations issued thereunder (unless the notice requirement has been waived by applicable regulation); or (ii) the withdrawal of the Company or any ERISA Affiliate from a Pension Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or was deemed such under Section 4062(e) of ERISA; or (iii) the termination of a Pension Plan, the filing of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination under Section 4041 of ERISA; or (iv) the institution of proceedings to terminate a Pension Plan by the PBGC; or (v) any other event or condition which would constitute grounds under Section 4042(a) of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; or (vi) the partial or complete withdrawal of the Company or any ERISA Affiliate from a Multiemployer Plan; or (vii) the imposition of a Lien pursuant to Section 412 of the Code or Section 302 of ERISA; or (viii) any event or condition which results in the reorganization or insolvency of a Multiemployer Plan under Section 4241 or Section 4245 of ERISA, respectively; or (ix) any event or condition which results in the termination of a Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA; or (x) any event or condition with respect to any Employee Benefit Plan which is regulated by any Foreign Benefit Law that results in such Employee Benefit Plan's termination or the revocation of the Employee Benefit Plan's authority to operate under the applicable Foreign Benefit Law. "Total Australian Dollar Commitment" means, as of any date of determination thereof, an amount equal to the Total Australian Facility Commitment (as the same may be reduced from time to time pursuant to this Agreement) less the New Zealand Dollar Outstandings as of such date. "Total Australian Facility Commitment" means an amount equal to AUS $100,000,000 inclusive of the Total New Zealand Dollar Commitment, each as reduced from time to time in accordance with Section 5.07. "Total British Pounds Sterling Commitment" means, as of any date of determination thereof, an amount equal to the Total UK Facility Commitment (as the same may be reduced from time to time pursuant to this Agreement) less the French Franc Outstandings and the euro Outstandings as of such date. "Total Canadian Facility Commitment" means an amount equal to CAN $105,000,000, as reduced from time to time in accordance with Section 4.07, Section 4.12 or Section 4.13. "Total Commitment" means, at any time of determination, the Total US Facility Commitment, plus the aggregate US Dollar Equivalent Amount of each of the Total UK 35 42 Facility Commitment, the Total Canadian Facility Commitment and the Total Australian Facility Commitment. "Total Facilities" means, in the aggregate, all of the US Facility, the UK Facility, the Canadian Facility and the Australian Facility. "Total Facility Termination Date" means the earliest to occur of (i) August 3, 2005, or (ii) the date of termination of the Lenders' obligations pursuant to Section 11.01 upon the occurrence of an Event of Default, or (iii) such date as the Borrowers may voluntarily permanently terminate all the Total Facilities by payment in full of all Obligations. "Total Facility Repayment Date" means such date as all of the following shall have occurred: (a) the Borrowers shall have permanently terminated each Facility by payment in full of all Outstandings together with all accrued and unpaid interest thereon, (b) all Swap Agreements shall have been terminated, expired or cash collateralized, (c) all Commitments shall have terminated or expired and (d) the Borrowers shall have fully, finally and irrevocably paid and satisfied in full all Obligations (other than Obligations consisting of continuing indemnities and other contingent Obligations of the Borrowers or the Guarantor that may be owing to the Lenders pursuant to the Loan Documents and expressly survive termination of this Agreement). "Total New Zealand Dollar Commitment" means, at any date of determination, an amount equal to the New Zealand Dollar Equivalent Amount of AUS $10,000,000 (as reduced from time to time in accordance with Section 5.07) as at such date. "Total UK Alternative Currency Commitment" means, at any date of determination, an amount equal to the French Franc Equivalent Amount and the euro Equivalent Amount in the sum of Pound 16,750,000 (as reduced from time to time in accordance with Section 3.07) as at such date. "Total UK Facility Commitment" means an amount equal to Pound 33,500,000 inclusive of the Total UK Alternative Currency Commitment, each as reduced from time to time in accordance with Section 3.07. "Total US Facility Commitment" means an amount equal to US $550,000,000, as reduced from time to time in accordance with Section 2.07, Section 2.12 or Section 2.13. "Total US Facility Revolving Credit Commitment" means, as of any date of determination thereof, an amount equal to the Total US Facility Commitment (as the same may be reduced from time to time pursuant to this Agreement) less the amount of US Facility Term Loan Outstandings as of such date. "Type" means any type of Loan (i.e., an Applicable Base Rate Loan, Eurodollar Rate Loan, Offshore Rate Loan, Canadian Facility BA Rate Loan or, for purposes of Article VI only, a UK Facility Alternative Rate Loan). 36 43 "UK Facility" means the facility described in Article III hereof providing for Loans to the UK Facility Borrowers by the UK Facility Lenders in the aggregate principal amount of the Total UK Facility Commitment. "UK Facility Advance" means a borrowing under the UK Facility consisting of the aggregate principal amount of an Offshore Rate Loan. "UK Facility Agent" shall have the meaning therefor set forth in the introduction hereto. "UK Facility Alternative Currency Fronting Commitment" means, with respect to each UK Facility Lender, the obligation of such Lender to make Loans in French Francs or in euro to the UK Facility Borrowers on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Percentage for the UK Facility multiplied by the Total UK Alternative Currency Commitment, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement. "UK Facility Alternative Currency Tranche" means the facility described in Article III hereof providing for Loans funded in French Francs or in euro to the UK Facility Borrowers by the UK Facility Lenders in an aggregate principal amount at any time outstanding not to exceed the Total UK Alternative Currency Commitment. "UK Facility Alternative Rate" means such rate of interest per annum determined by the UK Facility Agent and the UK Facility Borrowers as an alternative basis (i) for determining the rates of interest from time to time applicable to Loans under the UK Facility and/or (ii) upon which Loans may be maintained under the UK Facility, in each case pursuant to Section 6.02 or Section 6.04, which rate of interest shall be determined within thirty (30) days of notification to the UK Facility Borrowers in accordance with the provisions of Section 6.02 or Section 6.04, as applicable. If no such alternative basis is agreed upon by the UK Facility Agent and the UK Facility Borrowers, each UK Facility Lender shall certify a reasonable alternative basis for maintaining Loans under the UK Facility that reflects such UK Facility Lender's cost of funds (a "substitute basis"), which substitute basis may (without limitation) include alternative Interest Periods, alternative currencies or alternative rates of interest but shall include a margin above the cost of funds including the UK Facility Mandatory Cost, if any, to such UK Facility Lender and the Applicable Margin. "UK Facility Alternative Rate Loan" means a Loan for which the rate of interest is determined by reference to the UK Facility Alternative Rate, solely for purposes of Article VI. "UK Facility Borrowers" shall have the meaning therefor set forth in the introduction hereto. 37 44 "UK Facility Commitment" means, with respect to any Lender, such Lender's Applicable Facility Commitment for the UK Facility. "UK Facility Fronting Commitment" means, with respect to each UK Facility Lender, the obligation of such Lender to make Loans to the UK Facility Borrowers on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Percentage for the UK Facility multiplied by the Total UK Facility Commitment, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement, and shall consist of (but not be equal to the sum of the aggregate of) such Lender's British Pounds Sterling Fronting Commitment and its UK Facility Alternative Currency Fronting Commitment. "UK Facility Lenders" means those Lenders identified in the introduction hereto with respect to their making UK Facility Loans on behalf of all the Lenders. "UK Facility Loans" means Offshore Rate Loans made by the UK Facility Lenders pursuant to Section 3.01 hereof. "UK Facility Mandatory Cost" means a rate per annum determined by the UK Reference Bank and notified thereby to the UK Facility Agent calculated in accordance with the following formula: BY + S(Y-Z) + (F x 0.01) ------------------------ UK Facility Mandatory Cost per annum = 100 - (B+S) where on the day of application of the formula: B = The percentage of the UK Reference Bank's Eligible Liabilities (in excess of any stated minimum) by reference to which the Bank of England and/or the Financial Services Authority requires the UK Reference Bank to hold on a non-interest bearing deposit account in accordance with its cash ratio requirements; Y = The percentage rate per annum at which sterling deposits are offered by the UK Reference Bank to leading banks in the London interbank market at or about 11:00 A.M. (London, England time) on that day for the relevant period; F = The rate of charge payable by the UK Reference Bank to the Financial Services Authority under paragraph 2.02 or 2.03 (as appropriate) of the Fees Regulations (but where for this purpose the figure at paragraph 2.02b or 2.03b shall be deemed to be zero) and expressed in British Pounds Sterling per Pound 1,000,000 of the Fee Base of the UK Reference Bank; S = The percentage of the UK Reference Bank's Eligible Liabilities which the Bank of England (or other relevant United Kingdom governmental 38 45 authority or agency) requires the UK Reference Bank to place as a Special Deposit; and Z = The interest rate per annum payable by the Bank of England to the UK Reference Bank on Special Deposits. (a) For the purposes of this definition: (i) "Eligible Liabilities" and "Special Deposits" shall have the meanings given to them at the time of application of the above formula under or pursuant to the Bank of England Act 1998 or by the Bank of England (as appropriate); (ii) "Fee Base" has the meaning given to it in the Fees Regulations; (iii) "Fees Regulations" means: (A) prior to March 31, 1999 the Banking Supervision (Fees) Regulations 1998; and (B) on or after March 31, 1999, any regulations governing the payment of fees for banking supervision; (b) In the application of the above formula, B, Y, S, and Z are included in the formula as figures and not as percentages, e.g. if B = 0.5% and Y = 15%, BY is calculated as 0.5 x 15 and not as 0.5% x 15%. A negative result obtained from subtracting Z from Y is to be treated as zero. (c) (i) The above formula is applied on the first day of each relevant period comprised in the relevant Interest Period. (ii) Each rate calculated in accordance with the above formula is, if necessary, rounded upward to four decimal places. (d) The UK Facility Agent may, from time to time, after consultation with the Company and the Lenders, determine and notify to the Company and the Lenders any amendments or variations which are required to be made to the formula set out above in order to comply with any requirements from time to time imposed by any applicable regulatory authority in relation to UK Facility Advances denominated in British Pounds Sterling (including, without limitation, any requirements relating to British Pounds Sterling primary liquidity) and any such determination shall, in the absence of manifest error, be conclusive and binding on all the Borrowers, the Lenders, the Agents and the Company. "UK Facility Maximum Amount" means, with respect to each UK Facility Borrower, 95% of the amount by which the fair value of its assets (determined at the 39 46 lesser of fair valuation and present fair saleable value on an orderly basis) is in excess of the total amount of its liabilities, including without limitation Contingent Obligations, as of the Closing Date; provided, however, that if the calculation of UK Facility Maximum Amount in the manner provided above as of the date payment is required of such UK Facility Borrower pursuant to Article III would result in a greater positive number, then the UK Facility Maximum Amount shall be such greater positive number. "UK Facility Outstandings" means, at any date of determination, the British Pounds Sterling Outstandings plus the French Franc Outstandings plus the euro Outstandings. "UK Overnight Rate" means, for any day, the rate of interest per annum at which overnight deposits in the Applicable Currency, in an amount approximately equal to the amount with respect to which such date is being determined, would be offered for such day by the UK Facility Agents to major banks in the London or other applicable offshore interbank market. The UK Overnight Rate for any day which is not a Business Day shall be the UK Overnight Rate for the preceding Business Day. "UK Qualifying Lender" shall have the meaning therefor set forth in Section 6.06(g). "UK Reference Bank" means Bank of America, N.A. "Unutilized Canadian Facility Renewable Tranche Commitment" means, at any date of determination, the difference of the Canadian Facility Renewable Tranche Commitment at such date less the Canadian Facility Renewable Tranche Outstandings at such date. "Unutilized Total US Facility Commitment" means, at any date of determination, the difference of the Total US Facility Commitment at such date less the US Facility Outstandings at such date. "US Dollar Equivalent Amount" means, with respect to a specified amount of any Applicable Currency, the amount of US Dollars into which such amount of such Applicable Currency would be converted, based on the applicable Spot Rate of Exchange. "US Dollars" or "US $" means dollars constituting legal tender for the payment of public and private debts in the United States of America. "US Facility" means the facility described in Article II hereof providing for Loans to the US Facility Borrower by the US Facility Lenders in the aggregate principal amount of the Total US Facility Commitment. 40 47 "US Facility Advance" means a borrowing under the US Facility Revolving Credit Facility consisting of the aggregate principal amount of a US Facility Base Rate Loan or Eurodollar Rate Loan, as the case may be. "US Facility Agent" shall have the meaning therefor set forth in the introduction hereto. "US Facility Base Rate" means, for any day, the rate per annum equal to the higher of (i) the Federal Funds Effective Rate for such day plus one-half of one percent (.5%) and (ii) the US Prime Rate for such day. Any change in the US Facility Base Rate resulting from a change in the US Prime Rate or the Federal Funds Effective Rate shall become effective on the effective date of such change in the US Prime Rate or the Federal Funds Effective Rate. "US Facility Base Rate Loan" means a Loan for which the rate of interest is determined by reference to the US Facility Base Rate. "US Facility Borrower" shall have the meaning therefor set forth in the introduction hereto. "US Facility Commitment" means, with respect to any Lender, such Lender's Applicable Facility Commitment for the US Facility. "US Facility Fronting Commitment" means, with respect to each US Facility Lender, the obligation of such Lender to make or continue Loans to the US Facility Borrower on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Percentage for the US Facility multiplied by the Total US Facility Commitment, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement. "US Facility Lenders" means those Lenders identified in the introduction hereto with respect to their making US Facility Loans on behalf of all the Lenders. "US Facility Loans" means Loans, both US Facility Base Rate Loans and Eurodollar Rate Loans, made by the US Facility Lenders pursuant to Article II hereof. "US Facility Notes" means the promissory notes of the US Facility Borrower executed and delivered to the US Facility Lenders as provided in Section 2.04 hereof in substantially the form attached as Exhibit E, with appropriate insertions as to amounts, dates and names of US Facility Lenders, which US Facility Notes shall be delivered to evidence the US Facility Loans provided for herein. "US Facility Outstandings" means, at any date of determination, the aggregate principal amount of all US Facility Loans then outstanding. 41 48 "US Facility Revolving Credit Extension Date" means August 2, 2001 and each date thereafter, if any, to which the US Facility Revolving Credit Termination Date has been extended pursuant to Section 2.12 hereof, but in no event later than the Total Facility Termination Date. "US Facility Revolving Credit Facility" means that portion of the US Facility described in Section 2.01 hereof providing for US Facility Loans to the US Facility Borrower by the US Facility Lenders in the aggregate principal amount of the Total US Facility Revolving Credit Commitment. "US Facility Revolving Credit Outstandings" means, at any date of determination, that portion of the US Facility Outstandings representing the aggregate principal amount of all US Facility Loans outstanding under the US Facility Revolving Credit Facility. "US Facility Revolving Credit Termination Date" means the earlier of (i) August 2, 2001, or such later date with respect to the Unutilized Total US Facility Commitment as the US Facility Borrower and the Lenders shall agree in writing pursuant to Section 2.12 hereof, or (ii) the Total Facility Termination Date. "US Facility Term Loan" shall have the meaning therefor set forth in Section 2.13. "US Facility Term Loan Facility" means the facility described in Section 2.13 hereof providing for the conversion of US Facility Revolving Credit Outstandings on each US Facility Extension Date to US Facility Term Loans. "US Facility Term Loan Outstandings" means, at any date of determination, that portion of the US Facility Outstandings representing the aggregate principal amount of all US Facility Loans outstanding under the US Term Loan Facility. "US Prime Rate" means the per annum rate of interest established from time to time by the US Facility Agent as its prime rate, which rate may not be lowest rate charged by the US Facility Agent to its customers. "Utilization Premium" means an additional interest payment in an amount equal to 7.5 basis points per annum calculated in accordance with Sections 2.15, 3.14, 4.16 and 5.14 hereof, as applicable. "Voting Stock" means shares of capital stock issued by a corporation, or equivalent interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency. 42 49 1.02 Rules of Interpretation. (a) All accounting terms not specifically defined herein shall have the meanings assigned to such terms and shall be interpreted in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. (b) The headings, subheadings and table of contents used herein or in any other Loan Document are solely for convenience of reference and shall not constitute a part of any such document or affect the meaning, construction or effect of any provision thereof. (c) Except as otherwise expressly provided, references herein to articles, sections, paragraphs, clauses, annexes, appendices, exhibits and schedules are references to articles, sections, paragraphs, clauses, annexes, appendices, exhibits and schedules in or to this Agreement. (d) All definitions set forth herein or in any other Loan Document shall apply to the singular as well as the plural form of such defined term, and all references to the masculine gender shall include reference to the feminine or neuter gender, and vice versa, as the context may require. (e) When used herein or in any other Loan Document, words such as "hereunder", "hereto", "hereof" and "herein" and other words of like import shall, unless the context clearly indicates to the contrary, refer to the whole of the applicable document and not to any particular article, section, subsection, paragraph or clause thereof. (f) References to "including" means including without limiting the generality of any description preceding such term. (g) Any reference to an officer of any Borrower or any other Person by reference to the title of such officer shall be deemed to refer to each other officer of such Person, however titled, exercising the same or substantially similar functions. (h) All references to any agreement or document as amended, modified or supplemented, or words of similar effect, shall mean such document or agreement, as the case may be, as amended, modified or supplemented from time to time only as and to the extent permitted therein and in the Loan Documents. 1.03 Amendment and Restatement. The Borrowers, the Agents and the Lenders hereby agree that upon the effectiveness of this Agreement, the terms and provisions of the Existing Credit Agreement shall be and hereby are amended and restated in their entirety by the terms and conditions of this Agreement and the terms and provisions of the Existing Credit Agreement, except as otherwise provided herein, shall be superseded by this Agreement. The parties hereto agree that all Eurodollar Rate Loans, Offshore Rate Loans, Canadian Facility BA Rate Loans, US Facility Base Rate Loans, Canadian Facility Base Rate Loans and Australian Facility Base Rate Loans outstanding under the Existing Credit Agreement on the Closing Date 43 50 shall be terminated and repaid and that in connection therewith the Borrowers shall not incur any breakage costs under the Existing Credit Agreement. All of the indebtedness, liabilities and obligations owing by the Borrowers under the Existing Credit Agreement shall still be owing under this Agreement, which is given in substitution for, and not payment or novation of, the Existing Credit Agreement. 44 51 ARTICLE II The US Facility 2.01 Advances. (a) Commitment. Subject to the terms and conditions of this Agreement, each US Facility Lender severally agrees to make, on behalf of all the Lenders, US Facility Advances in US Dollars to the US Facility Borrower from time to time from the Closing Date until the US Facility Revolving Credit Termination Date, on a pro rata basis as to the total borrowing requested by the US Facility Borrower on any day determined by such US Facility Lender's Applicable Fronting Percentage for the US Facility, up to but not exceeding the US Facility Fronting Commitment of such US Facility Lender, and each Lender shall have a Participation in each such US Facility Advance pursuant to Section 2.14 equal in amount to its Applicable Commitment Percentage times such US Facility Advance; provided, however, that the US Facility Lenders will not be required and shall have no obligation to make any US Facility Advance (i) so long as a Default or an Event of Default has occurred and is continuing or (ii) if the Lenders have accelerated the maturity of the Obligations as a result of an Event of Default; provided further, however, that immediately after giving effect to each such US Facility Advance, (x) the US Facility Outstandings shall not exceed the Total US Facility Commitment and (y) the US Facility Revolving Credit Outstandings shall not exceed the Total US Facility Revolving Credit Commitment. Within such limits, the US Facility Borrower may borrow, repay and reborrow US Facility Loans hereunder, on a Business Day, from the Closing Date until, but (as to borrowings and reborrowings) not including, the US Facility Revolving Credit Termination Date; provided, however, that (A) no Eurodollar Rate Loan shall be made which has an Interest Period that extends beyond the US Facility Revolving Credit Termination Date and (B) each Eurodollar Rate Loan may be repaid only on the last day of the Interest Period with respect thereto, unless such prepayment is accompanied by the additional payment, if any, due under Section 6.05. The US Facility Borrower agrees that if at any time the US Facility Outstandings shall exceed the Total US Facility Commitment or the US Facility Revolving Credit Outstandings shall exceed the Total US Facility Revolving Credit Commitment, the US Facility Borrower shall immediately repay a principal amount of the outstanding US Facility Loans such that, as a result of such reduction, the Total US Facility Commitment shall equal or exceed the US Facility Outstandings and the Total US Facility Revolving Credit Commitment shall equal or exceed the US Facility Revolving Credit Outstandings. (b) Amounts, Advances and Rate Selection. (i) The principal amount outstanding on any US Facility Loan shall be recorded in the US Facility Agent's records in US Dollars, based on the amount of any US Facility Advance as reduced from time to time by the amount of any principal payments with respect to such US Facility Loan. In the event a US Facility Loan is Continued or Converted pursuant to Section 2.08, such election shall be treated as a US Facility Advance for purposes of this Section 2.01. There shall be no more than ten (10) Eurodollar Rate Loans outstanding at any one time under the US Facility. 45 52 (ii) Each US Facility Loan and each Continuation and Conversion under Section 2.08 shall be (A) in the case of Eurodollar Rate Loans, in an amount not less than US $10,000,000 and if greater in integral multiples of US $1,000,000, and (B) in the case of US Facility Base Rate Loans in an amount not less than US $5,000,000, and, if greater, an integral multiple of US $1,000,000. (iii) For each US Facility Advance an Authorized Representative shall give the US Facility Agent (A) at least three (3) Business Days' irrevocable telefacsimile notice prior to 10:00 A.M. (New York, New York time) of each Eurodollar Rate Loan representing a borrowing or Continuation or Conversion hereunder and (B) irrevocable telefacsimile notice of each US Facility Base Rate Loan representing a borrowing or Continuation or Conversion hereunder prior to 10:00 A.M. (New York, New York time) on the day of such proposed US Facility Base Rate Loan. Each such notice shall be in the form of a Borrowing Notice in the form attached hereto as Exhibit D-1, which shall be effective upon receipt by the US Facility Agent, and shall specify the Type of Loan, amount of the US Facility Advance to be made, the date of borrowing and the Interest Period (if a Eurodollar Rate Loan) to be used in the computation of interest. Neither the US Facility Agent nor any US Facility Lender shall incur any liability to the US Facility Borrower in acting upon any notice referred to above which the US Facility Agent believes in good faith to have been given by an Authorized Representative of the US Facility Borrower or for otherwise acting in good faith, and upon funding of US Facility Loans by any US Facility Lender in accordance with this Agreement pursuant to any such notice, the US Facility Borrower shall have effected US Facility Loans hereunder. A Borrowing Notice for a Eurodollar Rate Loan shall be irrevocable, and the US Facility Borrower shall be bound to make a borrowing in accordance therewith, unless such US Facility Borrower pays to the US Facility Lenders such amounts as may be due under Section 6.05 for failure of a borrowing of a Eurodollar Rate Loan to occur on the date specified therefor in the related Borrowing Notice. The duration of the initial Interest Period for each US Facility Loan shall be as specified in the initial Borrowing Notice. The US Facility Borrower shall have the option to elect the duration of any subsequent Interest Periods and to Continue or Convert the US Facility Loans in accordance with Section 2.08. If the US Facility Agent does not receive a notice of election of the duration of an Interest Period or of the Conversion of a Loan by the time prescribed hereby and by Section 2.08, the US Facility Borrower shall be deemed to have elected to Convert such Loan to or Continue such Loan as a US Facility Base Rate Loan until the US Facility Borrower notifies the US Facility Agent in accordance with Section 2.08. (iv) Notice of receipt of each Borrowing Notice in respect of US Facility Loans, together with the amount of each US Facility Lender's portion of an Advance requested thereunder and the applicable interest rate, shall be provided by the US Facility Agent to each US Facility Lender by telefacsimile with reasonable promptness, but (provided the US Facility Agent shall have received such notice by 10:00 A.M. (New York, New York time), not later than 12:00 noon (New York, New York time) on the same day as the US Facility Agent's receipt of such notice from the US Facility Borrower. 46 53 (v) Each US Facility Lender shall, pursuant to the terms and subject to the conditions of this Agreement, not later than 12:00 noon (New York, New York time) on the date specified for such US Facility Advance, make the amount of the US Facility Advance or Advances to be made by it on such day available to the US Facility Borrower by depositing or transferring the proceeds thereof in US Dollars and in Same Day Funds to the US Facility Agent at its Principal Office. The amount so received by the US Facility Agent shall, subject to the terms of this Agreement, be made available to the US Facility Borrower by deposit of the proceeds to an account of such US Facility Borrower maintained at the Principal Office or otherwise as shall be directed in the applicable Borrowing Notice. 2.02 Payment of Interest. (a) The US Facility Borrower shall pay interest to the US Facility Agent for the account of each US Facility Lender on the outstanding and unpaid principal amount of each US Facility Loan made by such US Facility Lender for the period commencing on the date of such US Facility Loan until such Loan shall be paid, Continued or Converted, as the case may be, at the then applicable US Facility Base Rate for US Facility Base Rate Loans or applicable Eurodollar Rate for Eurodollar Rate Loans, such payments to be made in US Dollars; provided, however, that if any Event of Default shall have occurred and be continuing, all amounts outstanding hereunder shall bear interest thereafter at the Default Rate. (b) Interest on each US Facility Loan shall be computed on the basis of a year of 360 days and calculated for the actual number of days elapsed. Interest on each US Facility Loan shall be paid (i) quarterly in arrears on the last Business Day of each fiscal quarter, commencing September 30, 2000, for each US Facility Base Rate Loan, (ii) on the last day of the applicable Interest Period for each Eurodollar Rate Loan and, if the Interest Period extends for more than three months, also at intervals of three months after the first day of the Interest Period and (iii) upon payment in full of the principal amount of each such Loan. Interest on amounts not paid when due shall be payable on demand. 2.03 Payment of Principal. Except as set forth in Section 2.13 with respect to US Facility Term Loans, the principal amount of each US Facility Loan shall be due and payable to the US Facility Agent for the benefit of each US Facility Lender in full on the US Facility Revolving Credit Termination Date. The principal amount of any US Facility Base Rate Loan may be prepaid in whole or in part at any time. The principal amount of any Eurodollar Rate Loan may be prepaid only at the end of the applicable Interest Period unless the US Facility Borrower shall pay to the US Facility Agent for the account of the US Facility Lenders the additional amount, if any, required under Section 6.05. All prepayments of US Facility Loans made by the US Facility Borrower shall be in the amount of (i) US $10,000,000, or (ii) such greater amount which is an integral multiple of US $1,000,000, or (iii) the amount equal to all US Facility Outstandings, or (iv) such other amount as necessary to comply with Section 2.01(a) or 2.07. 47 54 2.04 Manner of Payment. (a) Each payment of principal (including any prepayment) and payment of interest and fees in respect of US Facility Loans, and any other amount required to be paid to the US Facility Lenders with respect to the US Facility Loans, shall be made to the US Facility Agent at its Principal Office, for the account of each US Facility Lender's Applicable Lending Office. Each such payment shall be made in US Dollars and in Same Day Funds before 12:00 noon (New York, New York time) on the date such payment is due. The US Facility Agent may, but shall not be obligated to, debit the amount of any such payment which is not made by such time to any ordinary deposit account, if any, of the US Facility Borrower with the US Facility Agent. The US Facility Borrower shall give the US Facility Agent prior telephonic notice of any payment of principal, such notice to be given by not later than 11:00 A.M. (New York, New York time), on the date of such payment. (b) The US Facility Agent shall deem any payment by or on behalf of the US Facility Borrower hereunder that is not made both (i) in US Dollars and in Same Day Funds and (ii) prior to 12:00 noon (New York, New York time) to be a non-conforming payment. Any such payment shall not be deemed to be received by the US Facility Agent until the later of (x) the time such funds become available funds and (y) the next Business Day. The US Facility Agent shall give prompt telephonic notice to the applicable Authorized Representative and each of the US Facility Lenders (confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of Section 11.01(a) and 11.01(b). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding Business Day) at the Default Rate or the maximum rate permitted by applicable law, whichever is lower, from the date such amount was due and payable until the date such amount is paid in full. (c) In the event that any payment hereunder or under the US Facility Notes becomes due and payable on a day other than a Business Day, then such due date shall be extended to the next succeeding Business Day unless otherwise provided under clause (ii) of the definition of "Interest Period"; provided that interest shall continue to accrue during the period of any such extension. 2.05 US Facility Notes. US Facility Loans made by each US Facility Lender shall be evidenced by the US Facility Note payable to the order of such Lender in the respective amount of its Applicable Fronting Percentage of the Total US Facility Commitment, which US Facility Note shall be dated the Closing Date or a later date pursuant to an Assignment and Acceptance and shall be duly completed, executed and delivered by the US Facility Borrower upon request by any Lender. 2.06 Pro Rata Payments . Except as otherwise provided herein, (a) each payment on account of the principal of and interest on the US Facility Loans shall be made to the US Facility Agent for the account of the US Facility Lenders pro rata based on their Applicable Fronting Percentages for the US Facility, (b) all payments to be made by the US Facility Borrower for the 48 55 account of each of the US Facility Lenders on account of principal, interest and fees shall be made without diminution, set-off, recoupment, counterclaim or, except as set forth in Section 6.06(a) hereof, deduction, and (c) the US Facility Agent will promptly distribute payments received to the US Facility Lenders. Notwithstanding the foregoing, in the event any US Facility Lender shall not be able to make an Eurodollar Rate Loan under the circumstances provided in Section 6.01 or 6.03, interest shall be allocated to such US Facility Lender according to the interest rate payable to such US Facility Lender as set forth in Section 6.04. 2.07 Reductions. The US Facility Borrower shall, by notice from an Authorized Representative, have the right from time to time (but not more frequently than once during each fiscal quarter), upon not less than ten (10) Business Days' written notice to the US Facility Agent, effective upon receipt, to reduce the Total US Facility Commitment. The US Facility Agent shall give each US Facility Lender, within one (1) Business Day, telefacsimile notice, or telephonic notice (confirmed in writing), of such reduction. Each such reduction shall be in the aggregate amount of US $10,000,000 or such greater amount which is in an integral multiple of US $1,000,000, or the entire remaining Total US Facility Commitment, and shall permanently reduce the Total US Facility Commitment. No such reduction shall result in the payment of any Eurodollar Rate Loan other than on the last day of the Interest Period of such Loan unless such prepayment is accompanied by amounts due, if any, under Section 6.05. Each such reduction of the Total US Facility Commitment shall be accompanied by payment of the principal amount of US Facility Loans to the extent that the US Facility Outstandings exceed the Total US Facility Commitment, or the US Facility Revolving Credit Outstandings exceed the Total US Facility Revolving Credit Commitment, after giving effect to such reduction, together with accrued and unpaid interest on the amounts prepaid. 2.08 Conversions and Elections of Subsequent Interest Periods. Subject to the limitations set forth below and in Article VI hereof, the US Facility Borrower may: (a) upon notice to the US Facility Agent on or before 10:00 A.M. (New York, New York time) on any Business Day, Convert all or a part of Eurodollar Rate Loans to US Facility Base Rate Loans under the US Facility on the last day of the Interest Period for such Eurodollar Rate Loans; and (b) provided that no Default or Event of Default shall have occurred and be continuing, upon three (3) Business Days' notice to the US Facility Agent on or before 10:00 A.M. (New York, New York time): (i) elect a subsequent Interest Period for all or a portion of Eurodollar Rate Loans under the US Facility to begin on the last day of the then current Interest Period for such Eurodollar Rate Loans; and (ii) Convert US Facility Base Rate Loans to Eurodollar Rate Loans under the US Facility on any Business Day. Notice of any such Continuations or Conversions shall be effected by receipt of an appropriate Borrowing Notice and shall specify the effective date of such Continuation or 49 56 Conversion and the Interest Period to be applicable to the US Facility Loan as Continued or Converted. Each Continuation and Conversion pursuant to this Section 2.08 shall be subject to the limitations on Eurodollar Rate Loans set forth in the definition of "Interest Period" herein and in Sections 2.01 and 2.03 and Article VI hereof. All such Continuations or Conversions of US Facility Loans shall be effected pro rata based on the Applicable Fronting Percentages of the US Facility Lenders for the US Facility. 2.09 Facility Fee. For the period beginning on the Closing Date and ending on the Total Facility Termination Date, the Company agrees to pay to the US Facility Agent, and the US Facility Agent shall then pay to each Lender at its office in the United States so designated thereby based on such Lender's Applicable Commitment Percentage, a Facility Fee equal to the Applicable Margin for Facility Fees multiplied by the Total US Facility Commitment. Such payments of Facility Fees provided for in this Section 2.09 shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December beginning September 30, 2000 to and on the Total Facility Termination Date. Notwithstanding the foregoing, so long as any US Facility Lender fails to make available any portion of its US Facility Fronting Commitment when properly requested by the US Facility Borrower, such US Facility Lender shall not be entitled to receive payment of its pro rata share of such Facility Fee until such US Facility Lender shall make available such portion. Such Facility Fee shall be calculated on the basis of a year of 360 days for the actual number of days elapsed. 2.10 Deficiency Advances. No US Facility Lender shall be responsible for any default of any other US Facility Lender in respect to such other US Facility Lender's obligation to make any US Facility Loan hereunder nor shall the US Facility Fronting Commitment of any US Facility Lender or the US Facility Commitment of any Lender be increased as a result of such default of any other US Facility Lender. Without limiting the generality of the foregoing, in the event any US Facility Lender shall fail to advance funds to the US Facility Borrower as herein provided, the US Facility Agent may in its discretion, but shall not be obligated to, make a US Facility Advance under the applicable US Facility Note in its favor as a US Facility Lender of all or any portion of such amount or amounts (each, a "deficiency advance") and shall thereafter be entitled to payments of principal of and interest on such deficiency advance in the same manner and at the same interest rate or rates to which such other US Facility Lender would have been entitled had it made such advance under its US Facility Note; provided that, upon payment to the US Facility Agent from such other US Facility Lender of the entire outstanding amount of each such deficiency advance, together with accrued and unpaid interest thereon, from the most recent date or dates interest was paid to the US Facility Agent by the US Facility Borrower on each US Facility Loan comprising the deficiency advance, at the interest rate per annum for overnight borrowing by the US Facility Agent from the Federal Reserve Bank, then such payment shall be credited against the applicable US Facility Note of the US Facility Agent in full payment of such deficiency advance and the US Facility Borrower shall be deemed to have borrowed the amount of such deficiency advance from such other US Facility Lender as of the most recent date or dates, as the case may be, upon which any payments of interest were made by the US Facility Borrower thereon. 2.11 Use of Proceeds. The proceeds of the US Facility Loans made pursuant to the US Facility hereunder shall be used by the US Facility Borrower to finance capital expenditures and 50 57 Permitted Acquisitions and for other working capital and general corporate needs of the Company and its Subsidiaries, including commercial paper backup liquidity.. 2.12 US Facility Extension. (a) With the unanimous consent of all Lenders under the Total Facilities, at each US Facility Revolving Credit Extension Date the US Facility Borrower can elect to extend the US Facility Revolving Credit Termination Date for an additional period of 364 days with respect to the Unutilized Total US Facility Commitment as at such US Facility Revolving Credit Extension Date; provided, however, that in no event shall the US Facility Revolving Credit Termination Date be extended beyond the Total Facility Termination Date. (b) The US Facility Borrower shall notify the Lenders of its request for such an extension by delivering to the US Facility Agent and the Global Agent notice of such request signed by an Authorized Representative not more than sixty (60) days nor less than forty-five (45) days prior to the applicable US Facility Revolving Credit Extension Date. Notice of receipt of such request shall be provided by the US Facility Agent to the US Facility Lenders and to each other Facility Agent, who shall in turn provide notice of such request to the respective Lenders in each such Facility. The Global Agent shall notify the US Facility Borrower in writing not later than thirty (30) days prior to the applicable US Facility Revolving Credit Extension Date of the decision of the Lenders. Failure by any Lender to respond to a request for an extension shall constitute a refusal of such Lender to give its consent to such extension, and the US Facility Revolving Credit Termination Date shall not be extended. Failure by the Global Agent to give such notice to the US Facility Borrower as a result of not receiving the consent of all Lenders to such extension shall constitute refusal by the Lenders to extend the US Facility Revolving Credit Termination Date. (c) If on any US Facility Revolving Credit Extension Date the US Facility Borrower does not so elect to extend the US Facility Revolving Credit Termination Date then in effect, or if all Lenders under the Total Facilities do not unanimously consent to such extension, then as of such US Facility Revolving Credit Termination Date, (i) in addition to any reduction required under Section 2.13 hereof, the Total US Facility Commitment as at such date shall be permanently reduced by an amount equal to the Unutilized Total US Facility Commitment as at such date, (ii) the Total US Facility Revolving Credit Commitment shall be reduced to zero, and (iii) subject to the provisions of Section 2.13 hereof, all US Facility Outstandings shall be due and payable in full. 2.13 US Term Loan Option. (a) At each US Facility Revolving Credit Extension Date, the US Facility Borrower can elect to convert any or all US Facility Revolving Credit Outstandings as of such US Facility Revolving Credit Extension Date into a term loan on such date in the original principal amount equal to such US Facility Revolving Credit Outstandings. US Facility Loans so converted by the US Facility Borrower in accordance with this Section 2.13 shall be referred to as the "US Facility Term Loans." The US Facility Term Loans shall be repaid in equal quarterly installments on the last Business Day of each March, June, September and December 51 58 commencing with the first such date after the most recent US Facility Revolving Credit Extension Date and continuing until and including a final payment on the Total Facility Termination Date. The US Facility Term Loans may be comprised of US Facility Base Rate Loans and Eurodollar Rate Loans as the US Facility Borrower may elect in accordance with the provisions of this Article II. The US Facility Term Loans shall bear interest at a rate equal to (i) the same terms as the US Facility Loans prior to the conversion to US Facility Term Loans plus .125% until the initial Continuation or Conversion thereof pursuant to Section 2.08 hereof and (ii) the Applicable Margin for either US Facility Base Rate Loans or Eurodollar Rate Loans, as selected by the Borrower, plus .125%, at all times after the initial Continuation or Conversion thereof. Amounts repaid or prepaid on the US Facility Term Loans may not be reborrowed, and the Total US Facility Commitment shall be permanently reduced by any such amounts. (b) If on any US Facility Revolving Credit Extension Date the US Facility Borrower does not so elect to convert all or a portion of US Facility Revolving Credit Outstandings as of such date to US Facility Term Loans as described in (a) above, then on the US Facility Revolving Credit Termination Date then in effect, (i) all US Facility Revolving Credit Outstandings as of such date which are not so converted shall be due and payable in full on the US Facility Revolving Credit Termination Date then in effect, and (ii) in addition to any reduction required under Section 2.12 hereof, the Total US Facility Commitment as at such US Facility Revolving Credit Extension Date shall be permanently reduced by an amount equal to the US Facility Revolving Credit Outstandings as at such date which are not so converted. 2.14 Participations. On the Closing Date and each day thereafter until the Total Facility Termination Date, each Lender (including a US Facility Lender if necessary) will be deemed to have absolutely, irrevocably and unconditionally purchased from each US Facility Lender a Participation in US Facility Outstandings owing to such US Facility Lender in an amount such that, after such purchase, each Lender will have a Facility Credit Exposure under the US Facility equal in amount to its Applicable Commitment Percentage multiplied by the US Facility Outstandings (referred to as the "Facility Participation Amount" for such Lender in the US Facility). Each such Participation of each Lender in the US Facility shall be funded in accordance with Section 11.07. 2.15 Utilization Premium. For the period beginning on the Closing Date and ending on the US Facility Revolving Credit Termination Date, the US Facility Borrower agrees to pay to the US Facility Agent, who shall then pay to each US Facility Lender at its office in the United States based on such US Facility Lender's Applicable Fronting Percentage of the US Facility, an additional interest payment which shall accrue for each day on which the amount of US Facility Outstandings equals or exceeds an amount equal to fifty percent (50%) of the Total US Facility Commitment as of such day, and shall be payable in an amount equal to the Utilization Premium multiplied by the amount of all US Facility Outstandings calculated on the basis of a year of 360 days. Such additional interest payment shall be payable in arrears on the last Business Day of each March, June, September and December, beginning September 30, 2000. 52 59 ARTICLE III The UK Facility 3.01 Advances (a) Commitment. Subject to the terms and conditions of this Agreement, each UK Facility Lender severally agrees to make, on behalf of all the Lenders, UK Facility Advances in British Pounds Sterling, French Francs or euro (as specified in a Borrowing Notice) to the UK Facility Borrower requesting such UK Facility Advance, as the case may be, as specified in such Borrowing Notice, from time to time from the Closing Date until the Total Facility Termination Date, on a pro rata basis as to the total borrowing requested by such UK Facility Borrower on any day determined by such UK Facility Lender's Applicable Fronting Percentage for UK Facility, up to but not exceeding (i) in the case of Advances in British Pounds Sterling, the British Pounds Sterling Fronting Commitment of such UK Facility Lender, (ii) in the case of Advances in French Francs or euro, the UK Facility Alternative Currency Fronting Commitment of such UK Facility Lender, and each Lender shall have a Participation in each such UK Facility Advance pursuant to Section 3.13 equal in amount to its Applicable Commitment Percentage times such UK Facility Advance; provided, however, that the UK Facility Lenders will not be required and shall have no obligation to make any UK Facility Advance (A) so long as a Default or an Event of Default has occurred and is continuing or (B) if the Lenders have accelerated the maturity of the Obligations as a result of an Event of Default; provided further, however, that immediately after giving effect to each such UK Facility Advance, (x) the UK Facility Outstandings shall not exceed the Total UK Facility Commitment, and (y) the sum of the French Franc Outstandings plus the euro Outstandings shall not exceed the Total UK Alternative Currency Commitment. Within such limits, the UK Facility Borrowers may borrow, repay and reborrow UK Facility Loans hereunder, on a Business Day, from the Closing Date until, but (as to borrowings and reborrowings) not including, the Total Facility Termination Date; provided, however, that the aggregate principal amount outstanding to any UK Facility Borrower shall not at any time exceed its UK Facility Maximum Amount; and provided further, however, that (i) no Offshore Rate Loan shall be made which has an Interest Period that extends beyond the Total Facility Termination Date and (ii) each Offshore Rate Loan may be repaid only on the last day of the Interest Period with respect thereto, unless such payment is accompanied by the additional payment, if any, due under Section 6.05. The UK Facility Borrowers agree that if at any time the UK Facility Outstandings shall exceed the Total UK Facility Commitment, or the sum of the French Franc Outstandings plus the euro Outstandings shall exceed the Total UK Alternative Currency Commitment, the UK Facility Borrowers shall immediately repay a principal amount of the outstanding UK Facility Loans such that, as a result of such reduction, the Total UK Facility Commitment shall equal or exceed the UK Facility Outstandings, and the Total UK Alternative Currency Commitment shall equal or exceed the sum of the French Franc Outstandings plus the euro Outstandings. 53 60 (b) Amounts, Advances and Rate Selection. (i) The principal amount outstanding on any UK Facility Loan shall be recorded in the UK Facility Agent's records in British Pounds Sterling in the case of a UK Facility Advance of British Pounds Sterling, in French Francs in the case of a UK Facility Advance of French Francs, and in euro in the case of a UK Facility Advance of euro, in each case based on the amount of any UK Facility Advance as reduced from time to time by the amount of any principal payments with respect to such UK Facility Advance. In the case of a UK Facility Advance of French Francs or euro, the UK Facility Agent shall also record the principal amount outstanding on any such UK Facility Loan in British Pounds Sterling, based on the Sterling Equivalent Amount of such UK Facility Advance determined based on the Spot Rate of Exchange as of the date of such Advance, as reduced from time to time by any principal payments with respect thereto. In the event a UK Facility Loan is Continued pursuant to Section 3.08, such election shall be treated as a UK Facility Advance in the Applicable Currency of the existing Loan for purposes of this Section 3.01, with the Sterling Equivalent Amount of the principal amount of any such Loan in French Francs or euro determined based on the Spot Rate of Exchange as of the date of such Continuation. The UK Facility Agent shall adjust its books to reflect the new Sterling Equivalent Amount of such UK Facility Loan, and in the event that such adjustment would cause the UK Facility Outstandings to exceed the Total UK Facility Commitment, or would cause the sum of the French Franc Outstandings plus the euro Outstandings to exceed the Total UK Alternative Currency Commitment, the UK Facility Borrowers shall, immediately on the effective date of such Continuation, repay the portion of such Continued Loan (applying the new Spot Rate of Exchange) necessary to ensure that thereafter the Total UK Facility Commitment shall equal or exceed the UK Facility Outstandings, and the Total UK Alternative Currency Commitment shall equal or exceed the sum of the French Franc Outstandings plus the euro Outstandings. There shall be no more than ten (10) Offshore Loans outstanding at any one time under the UK Facility. (ii) Each UK Facility Loan and each Continuation and Conversion under Section 3.08 in British Pounds Sterling shall be in an amount not less than Pound 3,000,000 and if greater in integral multiples of Pound 1,000,000; each UK Facility Loan and each Continuation and Conversion under Section 3.08 in French Francs or in euro shall be in an amount not less than the French Franc Equivalent Amount or the euro Equivalent Amount, respectively, of Pound 1,000,000. (iii) For each UK Facility Advance an Authorized Representative shall give the UK Facility Agent at least (A) three (3) Business Days' irrevocable telefacsimile notice prior to 11:00 A.M. (London, England time) of each Offshore Rate Loan in French Francs or in euro representing a borrowing or Continuation or Conversion hereunder, and (B) two (2) Business Days' irrevocable telefacsimile notice prior to 11:00 A.M. (London, England time) of each Offshore Rate Loan in British Pounds Sterling representing a borrowing or Continuation or Conversion hereunder. Each such notice shall be in the form of a Borrowing Notice in the form attached hereto as Exhibit D-2, which shall be 54 61 effective upon receipt by the UK Facility Agent, and shall specify the Type of Loan, whether the Loan is to be made in British Pounds Sterling, euro or French Francs, the amount of the UK Facility Advance to be made, the date of borrowing and the Interest Period to be used in the computation of interest. Neither the UK Facility Agent nor any UK Facility Lender shall incur any liability to any UK Facility Borrower in acting upon any notice referred to above which the UK Facility Agent believes in good faith to have been given by an Authorized Representative of such UK Facility Borrower or for otherwise acting in good faith, and upon funding of UK Facility Loans by any UK Facility Lender in accordance with this Agreement pursuant to any such notice, such UK Facility Borrower shall have effected UK Facility Loans hereunder. A Borrowing Notice for an Offshore Rate Loan shall be irrevocable, and UK Facility Borrower giving such notice shall be bound to make a borrowing in accordance therewith, unless such UK Facility Borrower pays to the UK Facility Lenders such amounts as may be due under Section 6.05 for failure of a borrowing of an Offshore Rate Loan to occur on the date specified therefor in a Borrowing Notice. The duration of the initial Interest Period for each UK Facility Loan shall be as specified in the initial Borrowing Notice. The UK Facility Borrowers shall have the option to elect the duration of subsequent Interest Periods and to Continue the UK Facility Loans in accordance with Section 3.08. If the UK Facility Agent does not receive a notice of election of duration of an Interest Period by the time prescribed hereby and by Section 3.08, the applicable UK Facility Borrower shall be deemed to have elected to Continue such Loan as an Offshore Rate Loan with a subsequent Interest Period of one month. (iv) Notice of receipt of each Borrowing Notice in respect of UK Facility Loans, together with the amount of each UK Facility Lender's portion of an Advance requested thereunder, shall be provided by the UK Facility Agent to each UK Facility Lender by telefacsimile with reasonable promptness, but not later than (A) with respect to UK Facility Advances in British Pounds Sterling, 4:00 P.M. (London, England time) on the day two (2) Business Days prior to the date of such UK Facility Advance as set forth in such Borrowing Notice and (B) with respect to UK Facility Advances in French Francs or euro, 4:00 P.M. (London, England time) on the day three (3) Business Days prior to the date of such UK Facility Advance as set forth in such Borrowing Notice. Notice of the applicable interest rate for the requested UK Facility Advance shall be provided by the UK Facility Agent to each UK Facility Lender by telefacsimile with reasonable promptness, but not later than (C) with respect to UK Facility Advances in British Pounds Sterling, 2:00 P.M. (London, England time) on the date of the UK Facility Advance as set forth in such Borrowing Notice and (D) with respect to UK Facility Advances in French Francs or euro, 2:00 P.M. (London, England time) on the day two (2) Business Days prior to the date of such UK Facility Advance as set forth in such Borrowing Notice. (v) In the case of UK Facility Advances in British Pounds Sterling, each UK Facility Lender shall, pursuant to the terms and subject to the conditions of this Agreement, not later than 12:00 noon (London, England time) on the date specified for such UK Facility Advance, make the amount of the UK Facility Advance to be made by it on such day available to the applicable UK Facility Borrower by depositing or 55 62 transferring the proceeds thereof in British Pounds Sterling and in Same Day Funds to the UK Facility Agent at its Principal Office. The amount so received by the UK Facility Agent shall, subject to the terms of this Agreement, be made available to the applicable UK Facility Borrower by deposit of the proceeds to an account of such UK Facility Borrower maintained at the Principal Office or otherwise as shall be directed in the applicable Borrowing Notice. (vi) In the case of UK Facility Advances in French Francs or euro, each UK Facility Lender shall, pursuant to the terms and subject to the conditions of this Agreement, not later than 9:00 A.M. (London, England time) on the date specified for such UK Facility Advance, make the amount of the UK Facility Advance to be made by it on such day available to the applicable UK Facility Borrower by depositing or transferring the proceeds thereof in French Francs or euro and in Same Day Funds to the account of the UK Facility Agent at the Funding Bank. The amount so received by the Funding Bank shall, subject to the terms of this Agreement and upon instruction from the UK Facility Agent to the Funding Bank on the same day but no later than 9:00 A.M. (London, England time), be made available to the applicable UK Facility Borrower by deposit of the amount of French Francs or euro specified in the related Borrowing Notice to an account of such UK Facility Borrower maintained at the Funding Bank. 3.02 Payment of Interest. (a) The UK Facility Borrowers shall pay interest to the UK Facility Agent for the account of each UK Facility Lender on the outstanding and unpaid principal amount of each UK Facility Loan made by such UK Facility Lender for the period commencing on the date of such UK Facility Loan until such Loan shall be paid or Continued, as the case may be, at the then applicable Offshore Rate, such payments to be made (i) in British Pounds Sterling with respect to UK Facility Loans made in British Pounds Sterling, (ii) in French Francs with respect to UK Facility Loans made in French Francs (subject to Section 6.09(e)), and (iii) in euro with respect to UK Facility Loans made in euro (subject to Section 6.09(e)); provided, however, that if any Event of Default shall have occurred and be continuing, all amounts outstanding hereunder shall bear interest thereafter at the Default Rate. (b) Interest on each UK Facility Loan shall be computed on the basis of a year of 365 days for Advances in British Pounds Sterling and 360 days for Advances in French Francs or euro and calculated for the actual number of days elapsed. Interest on each UK Facility Loan shall be paid (i) on the last day of the applicable Interest Period for each such Offshore Rate Loan and, if the Interest Period extends for more than three months, also at intervals of three months after the first day of the Interest Period and (ii) upon payment in full of the principal of each such Loan. Interest on amounts not paid when due shall be payable on demand. 3.03 Payment of Principal. The principal amount of each UK Facility Loan shall be due and payable to the UK Facility Agent for the benefit of each UK Facility Lender in full on the Total Facility Termination Date. The principal amount of any Offshore Rate Loan may be prepaid only at the end of the applicable Interest Period unless the UK Facility Borrowers shall pay to the UK Facility Agent for the account of the UK Facility Lenders the additional amount, if 56 63 any, required under Section 6.05 and, in the case of a prepayment of any Offshore Rate Loan in French Francs or euro, the applicable UK Facility Borrower notifies the UK Facility Agent at least three (3) Business Days prior to such prepayment. All prepayments of UK Facility Loans made by the UK Facility Borrowers shall be in the Applicable Currency of the respective UK Facility Loan (subject to Section 6.09(e)) in the amount of (i) Pound 1,000,000 (or the French Franc Equivalent Amount thereof if in French Francs, or the euro Equivalent Amount thereof if in euro) or (ii) such greater amount which is an integral multiple of Pound 500,000 (or the French Franc Equivalent Amount thereof if in French Francs, or the euro Equivalent Amount thereof if in euro), or (iii) the amount equal to all UK Facility Outstandings, or (iv) such other amount as necessary to comply with Section 3.01(a) or 3.07. 3.04 Manner of Payment. (a) Each payment of principal (including any prepayment) and payment of interest and fees in respect of UK Facility Loans, and any other amount required to be paid to the UK Facility Lenders with respect to the UK Facility Loans, shall be made to the UK Facility Agent at its Principal Office, for the account of each UK Facility Lender's Applicable Lending Office, to be recorded in British Pounds Sterling and, if applicable, French Francs or euro, as set forth in Section 3.01(b). Each such payment shall be made in the Applicable Currency of the UK Facility Loan in Same Day Funds before 1:00 P.M. (London, England time) on the date such payment is due. The UK Facility Agent may, but shall not be obligated to, debit the amount of any such payment which is not made by such time to any ordinary deposit account, if any, of the applicable UK Facility Borrower with the UK Facility Agent. The UK Facility Borrowers shall give the UK Facility Agent prior telephonic notice of any payment of principal, such notice to be given by (i) not later than 11:00 A.M. (London, England time) at least two (2) Business Days prior to the date of such payment in the case of payment of a UK Facility Loan in British Pounds Sterling and (ii) not later than 11:00 A.M. (London, England time) at least three (3) Business Days prior to the date of such payment in the case of payment of a UK Facility Loan in French Francs or euro. (b) The UK Facility Agent shall deem any payment by or on behalf of the UK Facility Borrowers hereunder that is not made both (i) in British Pounds Sterling in the case of UK Facility Loans made in British Pounds Sterling, in French Francs in the case of UK Facility Loans made in French Francs, or in euro in the case of UK Facility Loans made in euro (the foregoing subject to Section 6.09(e)) and, in either case, in Same Day Funds and (ii) prior to 1:00 P.M. (London, England time) to be a non-conforming payment. Any such payment shall not be deemed to be received by the UK Facility Agent until the later of (x) the time such funds become available funds in the required Applicable Currency and (y) the next Business Day. The UK Facility Agent shall give prompt telephonic notice to the applicable Authorized Representative and each of the UK Facility Lenders (confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of Section 11.01(a) and 11.01(b). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding Business Day) at the Default Rate or the maximum rate permitted by applicable law, 57 64 whichever is lower, from the date such amount was due and payable until the date such amount is paid in full. (c) In the event that any payment hereunder becomes due and payable on a day other than a Business Day, then such due date shall be extended to the next succeeding Business Day unless otherwise provided under clause (ii) of the definition of "Interest Period"; provided that interest shall continue to accrue during the period of any such extension. 3.05 Evidence of Indebtedness. Each UK Facility Borrower hereby authorizes each UK Facility Lender and the UK Facility Agent to record, from time to time, in its records, the date and amount of each UK Facility Loan; the interest rates payable by the applicable UK Facility Borrower in respect of each UK Facility Loan and any Interest Period applicable thereto; the dates and amounts of all payments received by such UK Facility Lender on account of principal, interest and fees; and the amount of all the UK Facility Loans which remain payable by the UK Facility Borrowers to such UK Facility Lender. All amounts and other information so recorded shall be prima facie evidence thereof. The failure to record, or any error in recording, any such amount or other information shall not limit or impair the obligations of the UK Facility Borrowers hereunder or under any Loan Document. 3.06 Pro Rata Payments. Except as otherwise provided herein, (a) each payment on account of the principal of and interest on the UK Facility Loans shall be made to the UK Facility Agent for the account of the UK Facility Lenders pro rata based on their Applicable Fronting Percentages for the UK Facility, (b) all payments to be made by the UK Facility Borrowers for the account of each of the UK Facility Lenders on account of principal, interest and fees shall be made without diminution, set-off, recoupment, counterclaim or, except as set forth in Section 6.06(a), deduction, and (c) the UK Facility Agent will promptly distribute payments received to the UK Facility Lenders. Notwithstanding the foregoing, in the event any UK Facility Lender shall not be able to make an Eurodollar Rate Loan under the circumstances provided in Section 6.01 or 6.03, interest shall be allocated to such UK Facility Lender according to the interest rate payable to such UK Facility Lender as set forth in Section 6.04. 3.07 Reductions. The UK Facility Borrowers shall, by notice from an Authorized Representative, have the right from time to time (but not more frequently than once during each fiscal quarter), upon not less than ten (10) Business Days' written notice to the UK Facility Agent, effective upon receipt, to reduce the Total UK Facility Commitment. The UK Facility Agent shall give each UK Facility Lender, within one (1) Business Day, telefacsimile notice, or telephonic notice (confirmed in writing), of such reduction. Each such reduction shall be in the aggregate amount of Pound 1,000,000 or such greater amount which is in an integral multiple of Pound 500,000, or the entire remaining Total UK Facility Commitment, and shall permanently reduce the Total UK Facility Commitment. No such reduction shall result in the payment of any Offshore Rate Loan other than on the last day of the Interest Period of such Loan unless such prepayment is accompanied by amounts due, if any, under Section 6.05. Each such reduction of the Total UK Facility Commitment shall be accompanied by payment of the principal amount of the UK Facility Loans to the extent that the UK Facility Outstandings exceed the Total UK Facility Commitment, or to the extent that the sum of the French Franc Outstandings plus the euro Outstandings exceeds the Total UK Alternative Currency Commitment, in each case after 58 65 giving effect to such reduction, together with accrued and unpaid interest on the amounts prepaid. Any reduction of the Total UK Facility Commitment hereunder shall result, ipso facto, in a pro rata reduction of the Total UK Alternative Currency Commitment so that, as reduced, the Sterling Equivalent Amount of the Total UK Alternative Currency Commitment shall at all times remain equal to 50% of the Total UK Facility Commitment. 3.08 Conversions and Elections of Subsequent Interest Periods. Subject to the limitations set forth below and in Article VI hereof, and provided that no Default or Event of Default shall have occurred and be continuing, the UK Facility Borrowers may, upon three (3) Business Days' notice to the UK Facility Agent prior to 11:00 A.M. (London, England time) in the case of an Offshore Rate Loan in British Pounds Sterling and four (4) Business Days' notice to the UK Facility Agent prior to 11:00 A.M. (London, England time) in the case of an Offshore Rate Loan in French Francs or in euro, elect a subsequent Interest Period for all or a portion of Offshore Rate Loans under the UK Facility to begin on the last day of the then current Interest Period for such Offshore Rate Loans. Notice of any such Continuations shall be effected by receipt of an appropriate Borrowing Notice and shall specify the effective date of such Continuation and the Interest Period to be applicable to the UK Facility Loan as Continued. Each Continuation pursuant to this Section 3.08 shall be subject to the limitations on Offshore Rate Loans set forth in the definition of "Interest Period" herein and in Section 3.01 and 3.03 and Article VI hereof. All such Continuations of UK Facility Loans shall be effected pro rata based on the Applicable Fronting Percentages of the UK Facility Lenders for the UK Facility and shall be in the same currency as the original such Loan. 3.09 Facility Fee. For the period beginning on the Closing Date and ending on the Total Facility Termination Date, the Company agrees to pay to the US Facility Agent, and the US Facility Agent shall then pay to each Lender at its office in the United States so designated thereby based on such Lender's Applicable Commitment Percentage, a Facility Fee equal to the Applicable Margin for Facility Fees multiplied by the Total UK Facility Commitment. Such payments of Facility Fees provided for in this Section 3.09 shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December beginning September 30, 2000 to and on the Total Facility Termination Date. Notwithstanding the foregoing, so long as any UK Facility Lender fails to make available any portion of its UK Facility Fronting Commitment when properly requested by a UK Facility Borrower, such Lender shall not be entitled to receive payment of its pro rata share of such Facility Fee until such Lender shall make available such portion. Such Facility Fee shall be calculated on the basis of a year of 365 days for the actual number of days elapsed. 3.10 Deficiency Advances. No UK Facility Lender shall be responsible for any default of any other UK Facility Lender in respect to such other UK Facility Lender's obligation to make any UK Facility Loan hereunder nor shall the UK Facility Fronting Commitment of any UK Facility Lender or the UK Facility Commitment of any Lender be increased as a result of such default of any other UK Facility Lender. Without limiting the generality of the foregoing, in the event any UK Facility Lender shall fail to advance funds to a UK Facility Borrower as herein provided, Bank of America may in its discretion, but shall not be obligated to, make a UK Facility Advance hereunder as a UK Facility Lender of all or any portion of such amount or amounts (each, a "deficiency advance") and shall thereafter be entitled to payments of principal 59 66 of and interest on such deficiency advance in the same manner and at the same interest rate or rates to which such other UK Facility Lender would have been entitled had it made such an advance; provided that, upon payment to Bank of America from such other UK Facility Lender of the entire outstanding amount of each such deficiency advance, together with accrued and unpaid interest thereon, from the most recent date or dates interest was paid to Bank of America by the applicable UK Facility Borrower on each UK Facility Loan comprising the deficiency advance, at the interest rate per annum equal to the UK Overnight Rate, then such payment shall be credited against the applicable UK Facility Outstanding owing to Bank of America in full payment of such deficiency advance and the applicable UK Facility Borrower shall be deemed to have borrowed the amount of such deficiency advance from such other UK Facility Lender as of the most recent date or dates, as the case may be, upon which any payments of interest were made by such UK Facility Borrower thereon. 3.11 Use of Proceeds. The proceeds of the UK Facility Loans made pursuant to the UK Facility hereunder shall be used by the UK Facility Borrowers to finance capital expenditures and Permitted Acquisitions and for other working capital and general corporate needs of the UK Facility Borrowers. 3.12 One Loan. (a) Subject to subsection (c) below, all UK Facility Loans and UK Facility Advances by the UK Facility Lenders to any UK Facility Borrower shall constitute the joint and several general obligation of each of the UK Facility Borrowers. Each UK Facility Borrower shall be jointly and severally liable to the UK Facility Agent and the UK Facility Lenders for all Obligations hereunder in respect of the UK Facility, regardless of whether such Obligations arise as a result of UK Facility Advances to such Borrower, it being stipulated and agreed that UK Facility Advances hereunder to any UK Facility Borrower inure to the benefit of each of the UK Facility Borrowers, and that the UK Facility Lenders are relying on the joint and several liability of the UK Facility Borrowers in extending credit under the UK Facility. (b) Subject to subsection (c) below, each UK Facility Borrower guarantees to the UK Facility Lenders the payment in full of all of the Obligations of the other UK Facility Borrowers to the UK Facility Lenders in respect of UK Facility and further guarantees the due performance by each other UK Facility Borrower of its respective duties and covenants made in favor of the UK Facility Agent and the UK Facility Lenders hereunder. Each UK Facility Borrower agrees that the joint and several liability of the UK Facility Borrowers shall not be impaired or affected by any modification, supplement, extension or amendment of any contract or agreement to which the parties thereto may hereafter agree, nor by any modification, release or other alteration of any of the rights of the UK Facility Agent and the UK Facility Lenders with respect to any collateral, nor by any delay, extension of time, renewal, compromise or other indulgence granted by the UK Facility Agent and the UK Facility Lenders with respect to any of the Obligations, nor by any other agreements or arrangements whatever with any other UK Facility Borrower, any guarantor or any other Person, each UK Facility Borrower hereby waiving all notice of any such delay, extension, release, substitution, renewal, compromise or other indulgence, and hereby consenting to be bound thereby as fully and effectually as if it had expressly agreed thereto in advance. The liability of each UK Facility Borrower hereunder is direct and unconditional as to all of the 60 67 Obligations hereunder in respect of the UK Facility, and may be enforced without requiring the UK Facility Agent or the UK Facility Lenders first to resort to any other right, remedy or security; no UK Facility Borrower shall have any right of subrogation, reimbursement or indemnity whatsoever, nor any right of recourse to security for any of the Obligations in respect of the UK Facility, unless and until all of said Obligations have been paid in full. (c) Notwithstanding subsections (a) and (b) above, the joint and several liability of each UK Facility Borrower for, and its obligation to guarantee payment of all Obligations of, the other UK Facility Borrowers in respect of the UK Facility shall not at any time exceed its UK Facility Maximum Amount. 3.13 Participations. On the Closing Date and each day thereafter until the Total Facility Termination Date, each Lender (including a UK Facility Lender if necessary) will be deemed to have absolutely, irrevocably and unconditionally purchased from each UK Facility Lender a Participation in UK Facility Outstandings owing to such UK Facility Lender in an amount such that, after such purchase, each Lender will have a Facility Credit Exposure under the UK Facility equal in amount to its Applicable Commitment Percentage multiplied by the UK Facility Outstandings (referred to as the "Facility Participation Amount" for such Lender in the UK Facility). Each such Participation of each Lender in the UK Facility shall be funded in accordance with Section 11.07. 3.14 Utilization Premium. For the period beginning on the Closing Date and ending on the Total Facility Termination Date, the UK Facility Borrowers agree to pay to the UK Facility Agent, who shall then pay to each UK Facility Lender at its office in the United Kingdom based on such UK Facility Lender's Applicable Fronting Percentage of the UK Facility, an additional interest payment which shall accrue for each day on which the amount of UK Facility Outstandings equals or exceeds an amount equal to fifty percent (50%) of the Total UK Facility Commitment as of such day, and shall be payable in an amount equal to the Utilization Premium multiplied by the amount of all UK Facility Outstandings calculated on the basis of a year of 360 days. Such additional interest payment shall be payable in arrears on the last Business Day of each March, June, September and December, beginning September 30, 2000. 61 68 ARTICLE IV The Canadian Facility 4.01 Advances. (a) Commitment. Subject to the terms and conditions of this Agreement, each Canadian Facility Lender severally agrees to make, on behalf of all the Lenders, Canadian Facility Advances in Canadian Dollars to the Canadian Facility Borrower from time to time from the Closing Date until (i) the Total Facility Termination Date in the case of the Canadian Facility Full Maturity Tranche and (ii) the Canadian Facility Renewable Tranche Termination Date in the case of the Canadian Facility Renewable Tranche, in each case on a pro rata basis as to the total borrowing requested by the Canadian Facility Borrower on any day determined by such Canadian Facility Lender's Applicable Fronting Percentage for the Canadian Facility, up to but not exceeding (A) in the case of Advances under the Canadian Facility Renewable Tranche, the Canadian Facility Renewable Tranche Fronting Commitment of such Canadian Facility Lender, and (B) in the case of Advances under the Canadian Facility Full Maturity Tranche, the Canadian Facility Full Maturity Tranche Fronting Commitment of such Canadian Facility Lender, and each Lender shall have a Participation in each such Canadian Facility Advance pursuant to Section 4.14 equal in amount to its Applicable Commitment Percentage times such Canadian Facility Advance; provided, however, that the Canadian Facility Lenders will not be required and shall have no obligation to make any Canadian Facility Advance (x) so long as a Default or an Event of Default has occurred and is continuing or (y) if the Lenders have accelerated the maturity of the Obligations as a result of an Event of Default; provided further, however, that immediately after giving effect to each such Canadian Facility Advance, (I) the Canadian Facility Outstandings shall not exceed the Total Canadian Facility Commitment, (II) the Canadian Facility Renewable Tranche Outstandings shall not exceed the Canadian Facility Renewable Tranche Commitment, and (III) the Canadian Facility Full Maturity Tranche Outstandings shall not exceed the Canadian Facility Full Maturity Tranche Commitment. Within such limits, the Canadian Facility Borrower may borrow, repay and reborrow Canadian Facility Loans hereunder, on a Business Day, from the Closing Date until, but (as to borrowings and reborrowings) not including, (i) the Total Facility Termination Date in the case of the Canadian Facility Full Maturity Tranche and (ii) the Canadian Facility Renewable Tranche Termination Date in the case of the Canadian Facility Renewable Tranche; provided, however, that (A) no Canadian Facility BA Rate Loan shall be made which has an Interest Period or maturity that extends beyond the Total Facility Termination Date, in the case of the Canadian Facility Full Maturity Tranche, or the Canadian Facility Renewable Tranche Termination Date, in the case of the Canadian Facility Renewable Tranche, and (B) each Canadian Facility BA Rate Loan may be repaid only on the last day of the Interest Period with respect thereto, unless such prepayment is accompanied by the additional payment, if any, due under Section 6.05. The Canadian Facility Borrower agrees that if at any time (x) the Canadian Facility Outstandings shall exceed the Total Canadian Facility Commitment, (y) the Canadian Facility Renewable Tranche Outstandings shall exceed the Canadian Facility Renewable Tranche Commitment, or (z) the Canadian Facility Full Maturity Tranche Outstandings shall exceed the Canadian Facility Full Maturity Tranche Commitment, then in any such case the Canadian Facility Borrower shall immediately repay a principal amount of the outstanding Canadian Facility Loans such that, as a result of such 62 69 reduction, (I) the Total Canadian Facility Commitment shall equal or exceed the Canadian Facility Outstandings, (II) the Canadian Facility Renewable Tranche Commitment shall equal or exceed the Canadian Facility Renewable Tranche Outstandings and (III) the Canadian Facility Full Maturity Tranche Commitment shall equal or exceed the Canadian Facility Full Maturity Tranche Outstandings. (b) Amounts, Advances and Rate Selection. (i) The principal amount outstanding on any Canadian Facility Loan shall be recorded in the Canadian Facility Agent's records in Canadian Dollars, based on the amount of any Canadian Facility Advance as reduced from time to time by the amount of any principal payments with respect to such Canadian Facility Loan. In the event a Canadian Facility Loan is Continued or Converted pursuant to Section 4.08, such election shall be treated as a Canadian Facility Advance for purposes of this Section 4.01. There shall be no more than ten (10) Canadian Facility BA Rate Loans outstanding at any one time under the Canadian Facility. (ii) Each Canadian Facility Loan and each Continuation and Conversion under Section 4.08 shall be in an amount not less than CAN $2,000,000 and, if greater, in integral multiples of CAN $100,000. (iii) For each Canadian Facility Advance, an Authorized Representative of the Canadian Facility Borrower shall give the Canadian Facility Agent (A) at least two (2) Business Days' irrevocable telefacsimile notice prior to 10:00 A.M. (Toronto, Canada time) of each Canadian Facility BA Rate Loan representing a borrowing or Continuation or Conversion hereunder and (B) at least two (2) Business Days' irrevocable telefacsimile notice prior to 10:00 A.M. (Toronto, Canada time) of each Canadian Facility Base Rate Loan representing a borrowing or Conversion hereunder. Each such notice shall be in the form of a Borrowing Notice in the form attached hereto as Exhibit D-3, which shall be effective upon receipt by the Canadian Facility Agent, and shall specify the Type of Canadian Facility Loan (Canadian Facility BA Rate or Canadian Facility Base Rate), the amount of the Canadian Facility Advance to be made, whether such advance is under the Canadian Facility Renewable Tranche or the Canadian Facility Full Maturity Tranche, the date of borrowing and the Interest Period (if a Canadian Facility BA Rate Loan) to be used in the computation of interest. Neither the Canadian Facility Agent nor any Canadian Facility Lender shall incur any liability to any Canadian Facility Borrower in acting upon any notice referred to above which the Canadian Facility Agent believes in good faith to have been given by an Authorized Representative of the Canadian Facility Borrower or for otherwise acting in good faith, and upon funding of Canadian Facility Loans by any Canadian Facility Lender in accordance with this Agreement pursuant to any such notice, such Canadian Facility Borrower shall have effected Canadian Facility Loans hereunder. A Borrowing Notice for a Canadian Facility BA Rate Loan shall be irrevocable, and the Canadian Facility Borrower shall be bound to make a borrowing in accordance therewith, unless such Canadian Facility Borrower pays to the Canadian Facility Lenders such amounts as may be due under Section 6.05 for failure of a borrowing of a Canadian Facility BA Rate Loan to occur on the date specified therefor in 63 70 the related Borrowing Notice. The duration of the initial Interest Period for each Canadian Facility BA Rate Loan shall be as specified in the initial Borrowing Notice. The Canadian Facility Borrower shall have the option to elect the duration of subsequent Interest Periods and to Continue or Convert the Loans in accordance with Section 4.08. If the Canadian Facility Agent does not receive a notice of election of the duration of an Interest Period or of the Conversion of a Loan by the time prescribed hereby and by Section 4.08, the Canadian Facility Borrower shall be deemed to have elected to Convert such Loan to or Continue such Loan as a Canadian Facility Base Rate Loan until the Canadian Facility Borrower notifies the Canadian Facility Agent in accordance with Section 4.08. (iv) Notice of receipt of each Borrowing Notice in respect of Canadian Facility Loans shall be provided by the Canadian Facility Agent to each Canadian Facility Lender by telefacsimile with reasonable promptness, but not later than 12:00 noon (Toronto, Canada time) on the same day as the Canadian Facility Agent's receipt of such notice from the Canadian Facility Borrower so long as receipt is prior to 10:00 A.M. (Toronto, Canada time). The Canadian Facility Agent shall determine the Canadian Facility Fixed BA Rate for a Canadian Facility BA Rate Loan at 10:00 A.M. (Toronto, Canada time) on the day of such proposed Canadian Facility Fixed BA Rate, and not later than 12:00 noon (Toronto, Canada time) on such date, the Canadian Facility Agent shall provide the Canadian Facility Borrower and each Canadian Facility Lender notice by telefacsimile transmission of the amount of the Canadian Facility Loan or Loans required to be made by each Canadian Facility Lender on such date, and the applicable Canadian Facility Fixed BA Rate. (v) Not later than 12:00 noon (Toronto, Canada time) on the date specified for each Canadian Facility Advance, each Canadian Facility Lender shall, pursuant to the terms and subject to the conditions of this Agreement, make the amount of the Canadian Facility Advance or Advances to be made by it on such day available to the Canadian Facility Borrower by depositing or transferring the proceeds thereof in Canadian Dollars and Same Day Funds to the Canadian Facility Agent at the Principal Office. The amount so received by the Canadian Facility Agent shall, subject to the terms of this Agreement, on the same day be made available to the Canadian Facility Borrower by delivery to the Canadian Facility Borrower's account with the Canadian Facility Agent. 4.02 Payment of Interest. (a) The Canadian Facility Borrower shall pay interest to the Canadian Facility Agent for the account of each Canadian Facility Lender on the outstanding and unpaid principal amount of each Canadian Facility Loan made by such Canadian Facility Lender for the period commencing on the date of such Canadian Facility Loan until such Loan shall be paid, Continued or Converted, as the case may be, at the then applicable Canadian Facility Base Rate for Canadian Facility Base Rate Loans or applicable Canadian Facility Fixed BA Rate for Canadian Facility BA Rate Loans, such payments to be made in Canadian Dollars; provided, however, that if any Event of Default shall have occurred and be continuing, all amounts outstanding hereunder shall bear interest thereafter at the Default Rate. 64 71 The Canadian Facility Agent's certificate as to each rate of interest payable hereunder shall be prima facie evidence of such rate. (b) Computation of Interest. The Canadian Facility Borrower shall pay to the Canadian Facility Agent for the benefit of the Canadian Facility Lenders interest on each Canadian Facility Loan, which interest shall be calculated on the outstanding principal amount daily for the period: (i) in the case of a Canadian Facility Base Rate Loan, commencing on and including the day on which it is advanced and ending on, but excluding, the day on which it is repaid; or (ii) in the case of a Canadian Facility BA Rate Loan, commencing on and including the first day of the Interest Period relative to such Canadian Facility BA Rate Loan and ending on, but excluding, the last day of such Interest Period, at the rate of interest per annum equal to: (i) the Canadian Facility Base Rate for Canadian Facility Base Rate Loans, on the basis of a year of 365 days for the actual number of days elapsed; or (ii) the Canadian Facility Fixed BA Rate for Canadian Facility BA Rate Loans, on the basis of a year of 365 days for the actual number of days elapsed. For the purposes of this Agreement and calculation of interest on the basis of a year of 365 days, each rate of interest determined pursuant to such calculation expressed as an annual rate for the purposes of the Interest Act (Canada) is equivalent to such rate as so determined multiplied by the number of days in the calendar year in which the same is to be ascertained and divided by 365. The parties further agree that for the purposes of the Interest Act (Canada), (i) the principle of deemed reinvestment of interest shall not apply to any interest calculation under this Agreement, and (ii) the rates of interest stipulated in this Agreement are intended to be nominal rates and not effective rates or yields. (c) Accrual and Payment of Interest. Interest on each Canadian Facility Loan shall accrue from day to day but shall not compound and shall be payable: (i) in the case of a Canadian Facility Base Rate Loan or any other amount payable hereunder other than in respect of a Canadian Facility BA Rate Loan, monthly in arrears on the last Business Day of each month; or (ii) in the case of a Canadian Facility BA Rate Loan, on the last day of the applicable Interest Period for each Canadian Facility BA Rate Loan and, if the Interest Period extends for more than three months, at intervals of three months after the first day of the Interest Period and upon payment in full of the principal amount of each such Loan. 65 72 4.03 Payment of Principal. Except as set forth in Section 4.13 with respect to Canadian Facility Term Loans, (i) the principal amount of each Canadian Facility Loan advanced under the Canadian Facility Full Maturity Tranche shall be due and payable to the Canadian Facility Agent for the benefit of the Canadian Facility Lenders in full on the Total Facility Termination Date and (ii) the principal amount of each Canadian Facility Loan advanced under the Canadian Facility Renewable Tranche shall be due and payable to the Canadian Facility Agent for the benefit of the Canadian Facility Lenders in full on the Canadian Facility Renewable Tranche Termination Date. The principal amount of any Canadian Facility Base Rate Loan may be prepaid in whole or in part at any time. The principal amount of any Canadian Facility BA Rate Loan may be prepaid only at the end of the applicable Interest Period unless the Canadian Facility Borrower shall pay to the Canadian Facility Agent for the account of the Canadian Facility Lenders the additional amount, if any, required under Section 6.05. All prepayments of Canadian Facility Loans made by the Canadian Facility Borrower shall be in the amount of (i) at least CAN $2,000,000 or (ii) the amount equal to all Canadian Facility Outstandings, or (iii) such other amount as necessary to comply with Section 4.01(a) or 4.07. 4.04 Manner of Payment. (a) Each payment of principal (including any prepayment) and payment of interest in respect of Canadian Facility Loans, and any other amount required to be paid to the Canadian Facility Lenders with respect to the Canadian Facility Loans, shall be made in Canadian Dollars to the Canadian Facility Agent at its Principal Office, for the account of each Canadian Facility Lender's Applicable Lending Office. Each such payment shall be made in Same Day Funds before 12:00 noon (Toronto, Canada time) on the date such payment is due. The Canadian Facility Agent may, but shall not be obligated to, debit the amount of any such payment which is not made by such time to any ordinary deposit account, if any, of the Canadian Facility Borrower with the Canadian Facility Agent. The Canadian Facility Borrower shall give the Canadian Facility Agent prior telephonic notice of any payment of principal, such notice to be given by not later than 10:00 A.M. (Toronto, Canada time) one (1) Business Day prior to the date of such payment. (b) The Canadian Facility Agent shall deem any payment by or on behalf of the Canadian Facility Borrower hereunder that is not made both (i) in Canadian Dollars and in Same Day Funds and (ii) prior to 12:00 noon (Toronto, Canada time) to be a non-conforming payment. Any such payment shall not be deemed to be received by the Canadian Facility Agent until the later of (x) the time such funds become available funds and (y) the next Business Day. The Canadian Facility Agent shall give prompt telephonic notice to the applicable Authorized Representative and each of the Canadian Facility Lenders (confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of Section 11.01(a) and 11.01(b). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding Business Day) at the Default or the maximum rate permitted by applicable law, whichever is lower, from the date such amount was due and payable until the date such amount is paid in full. 66 73 (c) In the event that any payment hereunder or under the Canadian Facility Loans which bear interest at the Canadian Facility Base Rate becomes due and payable on a day other than a Business Day, then such due date shall be extended to the next succeeding Business Day; provided that interest shall continue to accrue during the period of any such extension. 4.05 Evidence of Indebtedness. The Canadian Facility Borrower hereby authorizes each Canadian Facility Lender and the Canadian Facility Agent to record, from time to time, in its records, the date and amount of each Canadian Facility Loan; the interest rates payable by the Canadian Facility Borrower in respect of each Canadian Facility Loan and any Interest Period applicable thereto; the dates and amounts of all payments received by such Canadian Facility Lender on account of principal, interest and fees; and the amount of all the Canadian Facility Loans which remain payable by the Canadian Facility Borrower to such Canadian Facility Lender. All amounts and other information so recorded shall be prima facie evidence thereof. The failure to record, or any error in recording, any such amount or other information shall not limit or impair the obligations of the Canadian Facility Borrower hereunder or under any Loan Document. 4.06 Pro Rata Payments. Except as otherwise provided herein, (a) each payment on account of the principal of and interest on the Canadian Facility Loans shall be made to the Canadian Facility Agent for the account of the Canadian Facility Lenders pro rata based on their Applicable Fronting Percentages for the Canadian Facility, (b) all payments to be made by the Canadian Facility Borrower for the account of each of the Canadian Facility Lenders on account of principal, interest and fees shall be made without diminution, set-off, recoupment, counterclaim or, except as set forth in Section 6.06(a), deduction, and (c) the Canadian Facility Agent in all other cases will promptly distribute payments received to the Canadian Facility Lenders. Notwithstanding the foregoing, in the event any Canadian Facility Lender shall not be able to make a Canadian Facility BA Rate Loan under the circumstances provided in Section 6.01 or 6.03, interest shall be allocated to such Canadian Facility Lender according to the interest rate payable to such Canadian Facility Lender as set forth in Section 6.04. 4.07 Reductions. The Canadian Facility Borrower shall, by notice from an Authorized Representative, have the right from time to time (but not more frequently than once during each fiscal quarter), upon not less than ten (10) Business Days' written notice to the Canadian Facility Agent, effective upon receipt, to reduce the Total Canadian Facility Commitment. The Canadian Facility Agent shall give each Canadian Facility Lender, within one (1) Business Day, telefacsimile notice, or telephonic notice (confirmed in writing), of such reduction. Each such reduction shall be in the aggregate amount of CAN $5,000,000 or such greater amount which is in an integral multiple of CAN $5,000,000 or the entire remaining Total Canadian Facility Commitment, shall permanently reduce the Total Canadian Facility Commitment and shall result in a pro rata reduction of both the Canadian Facility Full Maturity Tranche Commitment and the Canadian Facility Renewable Tranche Commitment, if such Canadian Facility Renewable Tranche Commitment remains outstanding at the time of such reduction. No such reduction shall result in the payment of any Canadian Facility BA Rate Loan other than on the last day of the Interest Period of such Loan unless such prepayment is accompanied by amounts due, if any, under Section 6.05. Each reduction of the Total Canadian Facility Commitment shall be 67 74 accompanied by payment of the Canadian Facility Loans to the extent that the (i) Canadian Facility Outstandings exceed the Total Canadian Facility Commitment, (ii) the Canadian Facility Renewable Tranche Outstandings exceed the Canadian Facility Renewable Tranche Commitment or (iii) the Canadian Facility Full Maturity Tranche Outstandings exceed the Canadian Facility Full Maturity Tranche Commitment, in each case after giving effect to such reduction, together with accrued and unpaid interest on the amounts prepaid. 4.08 Conversions and Elections of Subsequent Interest Periods . Provided that no Default or Event of Default shall have occurred and be continuing and subject to the limitations set forth below and in Article VI hereof, the Canadian Facility Borrower may request a Conversion or Continuation provided that: (a) the proceeds are used to retire the outstanding Canadian Facility Loan (the "Outstanding Loan"); (b) the Conversion or Continuance would otherwise be a permitted Canadian Facility Advance hereunder and the Canadian Facility Borrower complies with each provision hereof relative to the obtaining of a Canadian Facility Advance; (c) the aggregate principal amount of the Conversion or Continuance is not greater than the Outstanding Loan plus accrued interest in the case of Canadian Facility BA Rate Loans rounded up to the nearest CAN $100,000; and (d) each Conversion or Continuance is made contemporaneously with the retirement of the Outstanding Loan. Notice of any such Conversions or Continuation shall be effected by receipt of an appropriate Borrowing Notice and shall specify the effective date of such Conversion or Continuation and the Interest Period to be applicable to the Canadian Facility Loan as Continued or Converted and the Outstanding Loan to be retired. Each Continuation and Conversion pursuant to this Section 4.08 shall be subject to the limitations on Canadian Facility BA Rate Loans set forth in the definition of "Interest Period" herein and in Sections 4.01 and 4.03 and Article VI hereof. All such Continuations or Conversions of Canadian Facility Loans shall be effected pro rata based on the Applicable Fronting Percentages of the Canadian Facility Lenders for the Canadian Facility. 4.09 Facility Fee. For the period beginning on the Closing Date and ending on the Total Facility Termination Date in the case of the Canadian Facility Full Maturity Tranche, and on the Canadian Facility Renewable Tranche Termination Date in the case of the Canadian Facility Renewable Tranche, the Company agrees to pay to the US Facility Agent, and the US Facility Agent shall then pay to each Lender at its office in the United States so designated thereby based on such Lender's Applicable Commitment Percentage, (a) a Facility Fee equal to the Applicable Margin for Facility Fees with respect to the Canadian Facility Full Maturity Tranche multiplied by the Canadian Facility Full Maturity Tranche Commitment, and (b) a Facility Fee equal to the Applicable Margin for Facility Fees with respect to the Canadian Facility Renewable Tranche multiplied by the Canadian Facility Renewable Tranche 68 75 Commitment. Such payments of Facility Fees provided for in this Section 4.09 shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December of each year beginning September 30, 2000 to and on the Total Facility Termination Date in the case of the Canadian Facility Full Maturity Tranche and on the Canadian Facility Renewable Tranche Termination Date in the case of the Canadian Facility Renewable Tranche. Notwithstanding the foregoing, so long as any Canadian Facility Fronting Lender fails to make available any portion of its Canadian Facility Commitment when properly requested by the Canadian Facility Borrower, such Lender shall not be entitled to receive payment of its pro rata share of such Facility Fees until such Lender shall make available such portion. Such Facility Fees shall be calculated on the basis of a year of 360 days for the actual number of days elapsed. 4.10 Deficiency Advances. No Canadian Facility Lender shall be responsible for any default of any other Canadian Facility Lender in respect to such other Canadian Facility Lender's obligation to make any Canadian Facility Loan hereunder nor shall the Canadian Facility Fronting Commitment of any Canadian Facility Lender or the Canadian Facility Commitment of any Lender be increased as a result of such default of any other Canadian Facility Lender. Without limiting the generality of the foregoing, in the event any Canadian Facility Lender shall fail to advance funds to the Canadian Facility Borrower as herein provided, the Canadian Facility Agent may in its discretion, but shall not be obligated to, make a Canadian Facility Advance hereunder as a Canadian Facility Lender of all or any portion of such amount or amounts (each, a "deficiency advance") and shall thereafter be entitled to payments of principal of and interest on such deficiency advance in the same manner and at the same interest rate or rates to which such other Canadian Facility Lender would have been entitled had it made such advance hereunder; provided that, upon payment to the Canadian Facility Agent from such other Canadian Facility Lender of the entire outstanding amount of each such deficiency advance, together with accrued and unpaid interest thereon, from the most recent date or dates interest was paid to the Canadian Facility Agent by the Canadian Facility Borrower on each Canadian Facility Loan comprising the deficiency advance, at the interest rate per annum equal to the Canadian Overnight Rate, then such payment shall be credited against the applicable Canadian Facility Outstanding owing to the Canadian Facility Agent in full payment of such deficiency advance and the Canadian Facility Borrower shall be deemed to have borrowed the amount of such deficiency advance from such other Canadian Facility Lender as of the most recent date or dates, as the case may be, upon which any payments of interest were made by the Canadian Facility Borrower thereon. 4.11 Use of Proceeds. The proceeds of the Canadian Facility Loans made pursuant to the Canadian Facility hereunder shall be used by the Canadian Facility Borrower to finance capital expenditures and Permitted Acquisitions and for other working capital and general corporate needs of the Canadian Facility Borrower, including commercial paper backup liquidity. 4.12 Canadian Facility Extension. (a) With the unanimous consent of all Lenders under the Total Facilities, at each Canadian Facility Renewable Tranche Extension Date the Canadian Facility Borrower can elect to extend the Canadian Facility Renewable Tranche Termination Date for an additional period of 364 days with respect to the Unutilized Canadian Facility Renewable Tranche Commitment as at 69 76 such Canadian Facility Renewable Tranche Extension Date; provided, however, that in no event shall the Canadian Facility Renewable Tranche Termination Date be extended beyond the Total Facility Termination Date. (b) The Canadian Facility Borrower shall notify the Lenders of its request for such an extension by delivering to the Canadian Facility Agent and the Global Agent notice of such request signed by an Authorized Representative not more than sixty (60) days nor less than forty-five (45) days prior to the applicable Canadian Facility Renewable Tranche Extension Date. Notice of receipt of such request shall be provided by the Canadian Facility Agent to the Canadian Facility Lenders and to each other Facility Agent, who shall in turn provide notice of such request to the respective Lenders in such Facility. The Global Agent shall notify the Canadian Facility Borrower in writing not later than thirty (30) days prior to the applicable Canadian Facility Renewable Tranche Extension Date of the decision of the Lenders. Failure by any Lender to respond to a request for an extension shall constitute a refusal of such Lender to give its consent to such extension, and the Canadian Facility Renewable Tranche Termination Date shall not be extended. Failure by the Global Agent to give such notice to the Canadian Facility Borrower as a result of not receiving the consent of all Lenders to such extension shall constitute refusal by the Lenders to extend the Canadian Facility Renewable Tranche Termination Date. (c) If on any Canadian Facility Renewable Tranche Extension Date the Canadian Facility Borrower does not so elect to extend the Canadian Facility Renewable Tranche Termination Date then in effect, or if all Lenders under the Total Facilities do not unanimously consent to such extension, then as of such Canadian Facility Renewable Tranche Termination Date, (i) in addition to any reduction required under Section 4.13 hereof, the Total Canadian Facility Commitment as at such date shall be permanently reduced by an amount equal to the Canadian Facility Unutilized Renewable Tranche Commitment as at such date, (ii) the Canadian Facility Renewable Tranche Commitment shall be reduced to zero, and (iii) subject to the provisions of Section 4.13 hereof, all Canadian Facility Renewable Tranche Outstandings shall be due and payable in full. 4.13 Canadian Term Loan Option. (a) At each Canadian Facility Renewable Tranche Extension Date, the Canadian Facility Borrower can elect to convert any or all Canadian Facility Renewable Tranche Outstandings as of such Canadian Facility Renewable Tranche Extension Date into a term loan on such date in the original principal amount equal to such Canadian Facility Renewable Tranche Outstandings. Canadian Facility Loans so converted by the Canadian Facility Borrower in accordance with this Section 4.13 shall be referred to as the "Canadian Facility Term Loans." The Canadian Facility Term Loans shall be repaid in equal quarterly installments on the last Business Day of each March, June, September and December commencing with the first such date after the most recent Canadian Facility Renewable Tranche Extension Date and continuing until and including a final payment on the Total Facility Termination Date. The Canadian Facility Term Loans may be comprised of Canadian Facility Base Rate Loans and Canadian Facility BA Rate Loans as the Canadian Facility Borrower may elect in accordance with the provisions of this Article IV. The Canadian Facility Term Loans shall bear interest at a rate 70 77 equal to (i) the same terms as the Canadian Facility Loans prior to the conversion to Canadian Facility Term Loans plus .125% until the initial Continuation or Conversion thereof pursuant to Section 4.08 hereof and (ii) the Applicable Margin for either Canadian Facility Base Rate Loans or Eurodollar Rate Loans, as selected by the Borrower, plus .125%, at all times after the initial Continuation or Conversion thereof. Amounts repaid or prepaid on the Canadian Facility Term Loans may not be reborrowed, and the Total Canadian Facility Commitment shall be permanently reduced by any such amounts. (b) If on any Canadian Facility Renewable Tranche Extension Date the Canadian Facility Borrower does not so elect to convert all or a portion of its Canadian Facility Renewable Tranche Outstandings as of such date to Canadian Facility Term Loans as described in (a) above, then on the Canadian Facility Renewable Tranche Termination Date then in effect, (i) all Canadian Facility Renewable Tranche Outstandings as of such date which are not so converted shall be due and payable in full, and (ii) in addition to any reduction required under Section 4.12 hereof, the Total Canadian Facility Commitment as at such Canadian Facility Renewable Tranche Extension Date shall be permanently reduced by an amount equal to the Canadian Facility Renewable Tranche Outstandings as at such date which are not so converted. 4.14 Participations. On the Closing Date and each day thereafter until the Total Facility Termination Date, each Lender (including a Canadian Facility Lender if necessary) will be deemed to have absolutely, irrevocably and unconditionally purchased from each Canadian Facility Lender a Participation in Canadian Facility Outstandings owing to such Canadian Facility Lender in an amount such that, after such purchase, each Lender will have a Facility Credit Exposure under the Canadian Facility equal in amount to its Applicable Commitment Percentage multiplied by the Canadian Facility Outstandings (referred to as the "Facility Participation Amount" for such Lender in the Canadian Facility). Each such Participation of each Lender in the Canadian Facility shall be funded in accordance with Section 11.07. 4.15 Maximum Rate of Return. Notwithstanding any provision to the contrary contained in this Agreement, in no event shall the aggregate "interest" (as defined in Section 347 of the Criminal Code, Revised Statutes of Canada, 1985, C. 46 as the same may be amended, replaced or re-enacted from time to time) payable under this Agreement exceed the effective annual rate of interest on the "credit advanced" (as defined in that section) under this Agreement lawfully permitted under that section and, if any payment, collection or demand pursuant to this Agreement in respect of "interest" (as defined in that section) is determined to be contrary to the provisions of that section, such payment, collection or demand shall be deemed to have been made by mutual mistake of the Canadian Facility Borrower and the Canadian Facility Lenders and the amount of such payment or collection shall be refunded to the Canadian Facility Borrower; for purposes of this Agreement the effective annual rate of interest shall be determined in accordance with generally accepted actuarial practices and principles over the term of the applicable credit advanced on the basis of annual compounding of the lawfully permitted rate of interest and, in the event of dispute, a certificate of a Fellow of the Canadian Institute of Actuaries appointed by the Canadian Facility Agent will be conclusive for the purposes of such determination. 71 78 4.16 Utilization Premium. (a) For the period beginning on the Closing Date and ending on the Canadian Facility Renewable Tranche Termination Date, the Canadian Facility Borrower agrees to pay to the Canadian Facility Agent, who shall then pay to each Canadian Facility Lender at its office in Canada based on such Canadian Facility Lender's Applicable Fronting Percentage of the Canadian Facility, an additional interest payment which shall accrue for each day on which the amount of Canadian Facility Renewable Tranche Outstandings equals or exceeds an amount equal to fifty percent (50%) of the Canadian Facility Renewable Tranche Commitment as of such day, and shall be payable in an amount equal to the Utilization Premium multiplied by the amount of all Canadian Facility Renewable Tranche Outstandings calculated on the basis of a year of 360 days. Such additional interest payment shall be payable in arrears on the last Business Day of each March, June, September and December, beginning September 30, 2000. (b) For the period beginning on the Closing Date and ending on the Total Facility Termination Date, the Canadian Facility Borrower agrees to pay to the Canadian Facility Agent, who shall then pay to each Canadian Facility Lender at its office in Canada based on such Canadian Facility Lender's Applicable Fronting Percentage of the Canadian Facility, an additional interest payment which shall accrue for each day on which the amount of Canadian Facility Full Maturity Tranche Outstandings equals or exceeds an amount equal to fifty percent (50%) of the Canadian Facility Full Maturity Tranche Commitment as of such day, and shall be payable in an amount equal to the Utilization Premium multiplied by the amount of all Canadian Facility Full Maturity Tranche Outstandings calculated on the basis of a year of 360 days. Such additional interest payment shall be payable in arrears on the last Business Day of each March, June, September and December, beginning September 30, 2000. 72 79 ARTICLE V The Australian Facility 5.01 Advances. (a) Commitment. Subject to the terms and conditions of this Agreement, each Australian Facility Lender severally agrees to make, on behalf of all the Lenders, Australian Facility Advances in Australian Dollars or New Zealand Dollars (as specified in a Borrowing Notice) to the Australian Facility Borrower requesting such Australian Facility Advance, as the case may be, as specified in such Borrowing Notice, from time to time from the Closing Date until the Total Facility Termination Date, on a pro rata basis as to the total borrowing requested by such Australian Facility Borrower on any day determined by such Australian Facility Lender's Applicable Fronting Percentage for the Australian Facility, up to but not exceeding (i) in the case of Advances in Australian Dollars, the Australian Dollar Fronting Commitment of such Australian Facility Lender, and (ii) in the case of Advances in New Zealand Dollars, the New Zealand Dollar Fronting Commitment of such Australian Facility Lender, and each Lender shall have a Participation in each such Australian Facility Advance pursuant to Section 5.13 equal in amount to its Applicable Commitment Percentage times such Australian Facility Advance; provided, however, that the Australian Facility Lenders will not be required and shall have no obligation to make any Australian Facility Advance (A) so long as a Default or an Event of Default has occurred and is continuing or (B) if the Lenders have accelerated the maturity of the Obligations as a result of an Event of Default; provided further, however, that immediately after giving effect to each such Australian Facility Advance, (x) the Australian Facility Outstandings shall not exceed the Total Australian Facility Commitment and (y) the New Zealand Dollar Outstandings shall not exceed the Total New Zealand Dollar Commitment. Within such limits, the Australian Facility Borrowers may borrow, repay and reborrow Australian Facility Loans hereunder, on a Business Day, from the Closing Date until, but (as to borrowings and reborrowings) not including, the Total Facility Termination Date; provided, however, that the aggregate principal amount outstanding to any Australian Facility Borrower shall not at any time exceed its Australian Facility Maximum Amount; and provided further, however, that (i) no Offshore Rate Loan shall be made which has an Interest Period that extends beyond the Total Facility Termination Date and (ii) each Offshore Rate Loan may be repaid only on the last day of the Interest Period with respect thereto, unless such prepayment is accompanied by the additional payment, if any, due under Section 6.05. The Australian Facility Borrowers agree that if at any time the Australian Facility Outstandings shall exceed the Total Australian Facility Commitment or the New Zealand Dollar Outstandings shall exceed the Total New Zealand Dollar Commitment, the Australian Facility Borrowers shall immediately repay a principal amount of the outstanding Australian Facility Loans such that, as a result of such reduction, the Total Australian Facility Commitment shall equal or exceed the Australian Facility Outstandings and the Total New Zealand Dollar Commitment shall equal or exceed the New Zealand Dollar Outstandings. 73 80 (b) Amounts, Advances and Rate Selection. (i) The principal amount outstanding on any Australian Facility Loan shall be recorded in the Australian Facility Agent's records in Australian Dollars in the case of an Australian Facility Advance of Australian Dollars and in New Zealand Dollars in the case of an Australian Facility Advance of New Zealand Dollars, in each case based on the amount of any Australian Facility Advance as reduced from time to time by the amount of any principal payments with respect to such Australian Facility Advance. In the case of an Australian Facility Advance of New Zealand Dollars, the Australian Facility Agent shall also record the principal amount outstanding on any such Australian Facility Loan in Australian Dollars, based on the Australian Dollar Equivalent Amount of such Australia Facility Advance determined based on the Spot Rate of Exchange as of the date of such Advance, as reduced from time to time by any principal payments with respect thereto. In the event an Australian Facility Loan is Continued or Converted pursuant to Section 5.08, such election shall be treated as an Australian Facility Advance in the Applicable Currency of such Loan for purposes of this Section 5.01, with the Australian Dollar Equivalent Amount of the principal amount of any such Loan in New Zealand Dollars determined based on the Spot Rate of Exchange as of the date of such Continuation or Conversion. The Australian Facility Agent shall adjust its books to reflect the new Australian Dollar Equivalent Amount of such Australian Facility Loan, and in the event that such adjustment would cause the Australian Facility Outstandings to exceed the Total Australian Facility Commitment, or the New Zealand Dollar Outstandings to exceed the Total New Zealand Dollar Commitment, the Australian Facility Borrowers shall, immediately on the effective date of such Continuation or Conversion, repay the portion of such Continued or Converted Loan (applying the new Spot Rate of Exchange) necessary to ensure that thereafter the Total Australian Facility Commitment shall equal or exceed the Australian Facility Outstandings and the Total New Zealand Dollar Commitment shall equal or exceed the New Zealand Dollar Outstandings. There shall be no more than four (4) Offshore Facility Loans outstanding at any one time under the Australian Facility. (ii) Each Australian Facility Loan and each Continuation and Conversion under Section 5.08 shall be (A) in the case of Offshore Rate Loans, in an amount not less than AUS $5,000,000 (or the New Zealand Dollar Equivalent Amount thereof if in New Zealand Dollars), and, if greater, in integral multiples of AUS $500,000 (or the New Zealand Dollar Equivalent Amount thereof if in New Zealand Dollars), and (B) in the case of Australian Facility Base Rate Loans, in an amount not less than AUS $5,000,000 (or the New Zealand Dollar Equivalent Amount thereof if in New Zealand Dollars), and, if greater, in integral multiples of AUS $500,000 (or the New Zealand Dollar Equivalent Amount thereof if in New Zealand Dollars). (iii) For each Australian Facility Advance an Authorized Representative shall give the Australian Facility Agent at least (A) three (3) Business Days' irrevocable telefacsimile notice prior to 11:00 A.M. (Sydney, Australia time) of each Offshore Rate Loan representing a borrowing or Continuation or Conversion hereunder, and (B) three 74 81 (3) Business Days' irrevocable telefacsimile notice prior to 11:00 A.M. (Sydney, Australia time) of each Australian Facility Base Rate Loan representing a borrowing or Continuation or Conversion hereunder. Each such notice shall be in the form of a Borrowing Notice in the form attached hereto as Exhibit D-4, which shall be effective upon receipt by the Australian Facility Agent, and shall specify the Type of Loan, whether the Loan is to be made in Australian Dollars or New Zealand Dollars, the amount of the Australian Facility Advance to be made, the date of borrowing and the Interest Period (if an Offshore Rate Loan) to be used in the computation of interest. Neither the Australian Facility Agent nor any Australian Facility Lender shall incur any liability to any Australian Facility Borrower in acting upon any notice referred to above which the Australian Facility Agent believes in good faith to have been given by an Authorized Representative of such Australian Facility Borrower or for otherwise acting in good faith, and upon funding of Australian Facility Loans by any Australian Facility Lender in accordance with this Agreement pursuant to any such notice, such Australian Facility Borrower shall have effected Australian Facility Loans hereunder. A Borrowing Notice for an Offshore Rate Loan shall be irrevocable, and Australian Facility Borrower giving such notice shall be bound to make a borrowing in accordance therewith, unless such Australian Facility Borrower pays to the Australian Facility Lenders such amounts as may be due under Section 6.05 for failure of a borrowing of an Offshore Rate Loan to occur on the date specified therefor in a Borrowing Notice. The duration of the initial Interest Period for each Australian Facility Loan shall be as specified in the initial Borrowing Notice. The Australian Facility Borrowers shall have the option to elect the duration of subsequent Interest Periods and to Continue or Convert the Australian Facility Loans in accordance with Section 5.08. If the Australian Facility Agent does not receive a notice of election of duration of an Interest Period or of the Conversion of a Loan by the time prescribed hereby and by Section 5.08, the applicable Australian Facility Borrower shall be deemed to have elected to Convert such Loan to or Continue such Loan as an Australian Facility Base Rate Loan until such Australian Facility Borrower notifies the Australian Facility Agent in accordance with Section 5.08. (iv) Notice of receipt of each Borrowing Notice in respect of Australian Facility Loans, together with the amount of each Australian Facility Lender's portion of an Advance requested thereunder and the applicable interest rate, shall be provided by the Australian Facility Agent to each Australian Facility Lender by telefacsimile with reasonable promptness, but (provided the Australian Facility Agent shall have received such notice by 11:00 A.M. (Sydney, Australia time)) not later than 2:00 P.M. (Sydney, Australia time) on the same day as the Australian Facility Agent's receipt of such notice from the applicable Australian Facility Borrower. (v) Each Australian Facility Lender shall, pursuant to the terms and subject to the conditions of this Agreement, not later than 12:00 noon (Sydney, Australia time) on the date specified for such Australian Facility Advance, make the amount of the Australian Facility Advance to be made by it on such day available to the applicable Australian Facility Borrower by depositing or transferring the proceeds thereof in Australian Dollars or New Zealand Dollars, as requested, and in Same Day Funds to the Australian Facility Agent at its Principal Office. The amount so received by the 75 82 Australian Facility Agent shall, subject to the terms of this Agreement, be made available to the applicable Australian Facility Borrower by deposit of the proceeds to an account of such Australian Facility Borrower maintained at the Principal Office or otherwise as shall be directed in the applicable Borrowing Notice. 5.02 Payment of Interest. (a) The Australian Facility Borrowers shall pay interest to the Australian Facility Agent for the account of each Australian Facility Lender on the outstanding and unpaid principal amount of each Australian Facility Loan made by such Australian Facility Lender for the period commencing on the date of such Australian Facility Loan until such Loan shall be paid, Continued or Converted, as the case may be, at the then applicable Australian Facility Base Rate for Australian Facility Base Rate Loans or applicable Offshore Rate for Offshore Rate Loans, such payments to be made (i) in Australian Dollars with respect to Australian Facility Loans made in Australian Dollars, and (ii) in New Zealand Dollars with respect to Australian Facility Loans made in New Zealand Dollars; provided, however, that if any Event of Default shall have occurred and be continuing, all amounts outstanding hereunder shall bear interest thereafter at the Default Rate. (b) Interest on each Australian Facility Loan shall be computed on the basis of a year of 365/366 days and calculated for the actual number of days elapsed. Interest on each Australian Facility Loan shall be paid (i) quarterly in arrears on the last Business Day of each fiscal quarter, commencing September 30, 2000, for each Australian Facility Base Rate Loan, (ii) on the last day of the applicable Interest Period for each Offshore Rate Loan and, if the Interest Period extends for more than three months, also at intervals of three months after the first day of the Interest Period and (iii) upon payment in full of the principal of each such Loan. Interest on amounts not paid when due shall be payable on demand. 5.03 Payment of Principal. The principal amount of each Australian Facility Loan shall be due and payable to the Australian Facility Agent for the benefit of each Australian Facility Lender in full on the Total Facility Termination Date. The principal amount of any Australian Facility Base Rate Loan may be prepaid in whole or in part at any time. The principal amount of any Offshore Rate Loan may be prepaid only at the end of the applicable Interest Period unless the Australian Facility Borrowers shall pay to the Australian Facility Agent for the account of the Australian Facility Lenders the additional amount, if any, required under Section 6.05. All prepayments of Australian Facility Loans made by the Australian Facility Borrowers shall be in the Applicable Currency of the respective Australian Facility Loan in the amount of (i) AUS $5,000,000 (or the New Zealand Dollar Equivalent Amount thereof if in New Zealand Dollars), or (ii) such greater amount which is an integral multiple of AUS $1,000,000 (or the New Zealand Dollar Equivalent Amount thereof if in New Zealand Dollars), or (iii) the amount equal to all Australian Facility Outstandings, or (iv) such other amount as necessary to comply with Section 5.01(a) or 5.07. 76 83 5.04 Manner of Payment. (a) Each payment of principal (including any prepayment) and payment of interest and fees in respect of Australian Facility Loans, and any other amount required to be paid to the Australian Facility Lenders with respect to the Australian Facility Loans, shall be made to the Australian Facility Agent at its Principal Office, for the account of each Australian Facility Lender's Applicable Lending Office, to be recorded in Australian Dollars and, if applicable, New Zealand Dollars, as set forth in Section 5.01(b). Each such payment shall be made in Applicable Currency of the Australian Facility Loan in Same Day Funds before 12:00 noon (Sydney, Australia time) on the date such payment is due. The Australian Facility Agent may, but shall not be obligated to, debit the amount of any such payment which is not made by such time to any ordinary deposit account, if any, of the applicable Australian Facility Borrower with the Australian Facility Agent. The Australian Facility Borrowers shall give the Australian Facility Agent prior telephonic notice of any payment of principal, such notice to be given by not later than 11:00 A.M. (Sydney, Australia time), at least three (3) Business Days prior to the date of such payment. (b) The Australian Facility Agent shall deem any payment by or on behalf of the Australian Facility Borrowers hereunder that is not made both (i) in Australian Dollars in the case of Australian Facility Loans made in Australian Dollars or in New Zealand Dollars in the case of Australian Facility Loans made in New Zealand Dollars and, in either case, in Same Day Funds and (ii) prior to 12:00 noon (Sydney, Australia time) to be a non-conforming payment. Any such payment shall not be deemed to be received by the Australian Facility Agent until the later of (x) the time such funds become available funds in the required Applicable Currency and (y) the next Business Day. The Australian Facility Agent shall give prompt telephonic notice to the applicable Authorized Representative and each of the Australian Facility Lenders (confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of Section 11.01(a) and 11.01(b). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding Business Day) at the Default Rate or the maximum rate permitted by applicable law, whichever is lower, from the date such amount was due and payable until the date such amount is paid in full. (c) In the event that any payment hereunder becomes due and payable on a day other than a Business Day, then such due date shall be extended to the next succeeding Business Day unless otherwise provided under clause (ii) of the definition of "Interest Period"; provided that interest shall continue to accrue during the period of any such extension. 5.05 Evidence of Indebtedness. Each Australian Facility Borrower hereby authorizes each Australian Facility Lender and the Australian Facility Agent to record, from time to time, in its records, the date and amount of each Australian Facility Loan; the interest rates payable by the applicable Australian Facility Borrower in respect of each Australian Facility Loan and any Interest Period applicable thereto; the dates and amounts of all payments received by such Australian Facility Lender on account of principal, interest and fees; and the amount of all the Australian Facility Loans which remain payable by the Australian Facility Borrowers to such 77 84 Australian Facility Lender. All amounts and other information so recorded shall be prima facie evidence thereof. The failure to record, or any error in recording, any such amount or other information shall not limit or impair the obligations of the Australian Facility Borrowers hereunder or under any Loan Document. 5.06 Pro Rata Payments. Except as otherwise provided herein, (a) each payment on account of the principal of and interest on the Australian Facility Loans shall be made to the Australian Facility Agent for the account of the Australian Facility Lenders pro rata based on their Applicable Fronting Percentages for the Australian Facility, (b) all payments to be made by the Australian Facility Borrowers for the account of each of the Australian Facility Lenders on account of principal, interest and fees shall be made without diminution, set-off, recoupment, counterclaim or, except as set forth in Section 6.06(a), deduction, and (c) the Australian Facility Agent will promptly distribute payments received to the Australian Facility Lenders. Notwithstanding the foregoing, in the event any Australian Facility Lender shall not be able to make an Offshore Rate Loan under the circumstances provided in Section 6.01 or 6.03, interest shall be allocated to such Australian Facility Lender according to the interest rate payable to such Australian Facility Lender as set forth in Section 6.04. 5.07 Reductions. The Australian Facility Borrowers shall, by notice from an Authorized Representative, have the right from time to time (but not more frequently than once during each fiscal quarter), upon not less than ten (10) Business Days' written notice to the Australian Facility Agent, effective upon receipt, to reduce the Total Australian Facility Commitment. The Australian Facility Agent shall give each Australian Facility Lender, within two (2) Business Days, telefacsimile notice, or telephonic notice (confirmed in writing), of such reduction. Each such reduction shall be in the aggregate amount of AUS $5,000,000 or such greater amount which is in an integral multiple of AUS $1,000,000, or the entire remaining Total Australian Facility Commitment, and shall permanently reduce the Total Australian Facility Commitment. No such reduction shall result in the payment of any Offshore Rate Loan other than on the last day of the Interest Period of such Loan unless such prepayment is accompanied by amounts due, if any, under Section 6.05. Each such reduction of the Total Australian Facility Commitment shall be accompanied by payment of the principal amount of the Australian Facility Loans to the extent that the Australian Facility Outstandings exceed the Total Australian Facility Commitment or the New Zealand Dollar Outstandings exceed the Total New Zealand Dollar Commitment, in each case after giving effect to such reduction, together with accrued and unpaid interest on the amounts prepaid. Any reduction of the Total Australian Facility Commitment hereunder shall result, ipso facto, in a pro rata reduction of the Total New Zealand Dollar Commitment so that, as reduced, the Australian Dollar Equivalent Amount of the Total New Zealand Dollar Commitment shall at all times remain equal to 10% of the Total Australian Facility Commitment. 5.08 Conversions and Elections of Subsequent Interest Periods. Subject to the limitations set forth below and in Article VI hereof, the Australian Facility Borrowers may: (a) upon notice to the Australian Facility Agent on or before 11:00 A.M. (Sydney, Australia time) on any Business Day, Convert all or a part of Offshore Rate Loans to Australian 78 85 Facility Base Rate Loans under the Australian Facility on the last day of the Interest Period for such Offshore Rate Loans; and (b) provided that no Default or Event of Default shall have occurred and be continuing, upon five (5) Business Days' notice to the Australian Facility Agent prior to 11:00 A.M. (Sydney, Australia time): (i) elect a subsequent Interest Period for all or a portion of Offshore Rate Loans under the Australian Facility to begin on the last day of the then current Interest Period for such Offshore Rate Loans; and (ii) Convert Australian Facility Base Loans to Offshore Rate Loans under the Australian Facility on any Business Day. Notice of any such Continuations or Conversions shall be effected by receipt of an appropriate Borrowing Notice and shall specify the effective date of such Continuation or Conversion and the Interest Period to be applicable to the Australian Facility Loan as Continued or Converted. Each Continuation and Conversion pursuant to this Section 5.08 shall be subject to the limitations on Offshore Rate Loans set forth in the definition of "Interest Period" herein and in Section 5.01 and 5.03 and Article VI hereof. All such Continuations or Conversions of Australian Facility Loans shall be effected pro rata based on the Applicable Fronting Percentages of the Australian Facility Lenders for the Australian Facility and shall be in the same currency as the original such Loan. 5.09 Facility Fee. For the period beginning on the Closing Date and ending on the Total Facility Termination Date, the Company agrees to pay to the US Facility Agent, and the US Facility Agent shall then pay to each Lender at its office in the United States so designated thereby based on such Lender's Applicable Commitment Percentage, a Facility Fee equal to the Applicable Margin for Facility Fees multiplied by the Total Australian Facility Commitment. Such payments of Facility Fees provided for in this Section 5.09 shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December beginning September 30, 2000 to and on the Total Facility Termination Date. Notwithstanding the foregoing, so long as any Australian Facility Lender fails to make available any portion of its Australian Facility Fronting Commitment when properly requested by an Australian Facility Borrower, such Lender shall not be entitled to receive payment of its pro rata share of such Facility Fee until such Lender shall make available such portion. Such Facility Fee shall be calculated on the basis of a year of 365/366 days for the actual number of days elapsed. 5.10 Deficiency Advances. No Australian Facility Lender shall be responsible for any default of any other Australian Facility Lender in respect to such other Australian Facility Lender's obligation to make any Australian Facility Loan hereunder nor shall the Australian Facility Fronting Commitment of any Australian Facility Lender or the Australian Facility Commitment of any Lender be increased as a result of such default of any other Australian Facility Lender. Without limiting the generality of the foregoing, in the event any Australian Facility Lender shall fail to advance funds to an Australian Facility Borrower as herein provided, the Australian Facility Agent may in its discretion, but shall not be obligated to, make an 79 86 Australian Facility Advance hereunder as an Australian Facility Lender of all or any portion of such amount or amounts (each, a "deficiency advance") and shall thereafter be entitled to payments of principal of and interest on such deficiency advance in the same manner and at the same interest rate or rates to which such other Australian Facility Lender would have been entitled had it made such advance; provided that, upon payment to the Australian Facility Agent from such other Australian Facility Lender of the entire outstanding amount of each such deficiency advance, together with accrued and unpaid interest thereon, from the most recent date or dates interest was paid to the Australian Facility Agent by the applicable Australian Facility Borrower on each Australian Facility Loan comprising the deficiency advance, at the interest rate per annum equal to the customary rate set by the Australian Facility Agent for the correction of errors among banks in Australia for three (3) Business Days and thereafter at the Australian Facility Base Rate, then such payment shall be credited against the applicable Australian Facility Outstanding owing to the Australian Facility Agent in full payment of such deficiency advance and the applicable Australian Facility Borrower shall be deemed to have borrowed the amount of such deficiency advance from such other Australian Facility Lender as of the most recent date or dates, as the case may be, upon which any payments of interest were made by such Australian Facility Borrower thereon. 5.11 Use of Proceeds. The proceeds of the Australian Facility Loans made pursuant to the Australian Facility hereunder shall be used by the Australian Facility Borrowers to finance capital expenditures and Permitted Acquisitions and for other working capital and general corporate needs of the Australian Facility Borrowers. 5.12 One Loan. (a) Subject to subsection (c) below, all Australian Facility Loans and Australian Facility Advances by the Australian Facility Lenders to any Australian Facility Borrower shall constitute the joint and several general obligation of each of the Australian Facility Borrowers. Each Australian Facility Borrower shall be jointly and severally liable to the Australian Facility Agent and the Australian Facility Lenders for all Obligations hereunder in respect of the Australian Facility, regardless of whether such Obligations arise as a result of Australian Facility Advances to such Borrower, it being stipulated and agreed that Australian Facility Advances hereunder to any Australian Facility Borrower inure to the benefit of each of the Australian Facility Borrowers, and that the Australian Facility Lenders are relying on the joint and several liability of the Australian Facility Borrowers in extending credit under the Australian Facility. (b) Subject to subsection (c) below, each Australian Facility Borrower guarantees to the Australian Facility Lenders the payment in full of all of the Obligations of the other Australian Facility Borrowers to the Australian Facility Lenders in respect of Australian Facility and further guarantees the due performance by each other Australian Facility Borrower of its respective duties and covenants made in favor of the Australian Facility Agent and the Australian Facility Lenders hereunder. Each Australian Facility Borrower agrees that the joint and several liability of the Australian Facility Borrowers shall not be impaired or affected by any modification, supplement, extension or amendment of any contract or agreement to which the parties thereto may hereafter agree, nor by any modification, release or other alteration of any of the rights of the Australian Facility Agent and the Australian Facility Lenders with respect to any 80 87 collateral, nor by any delay, extension of time, renewal, compromise or other indulgence granted by the Australian Facility Agent and the Australian Facility Lenders with respect to any of the Obligations, nor by any other agreements or arrangements whatever with any other Australian Facility Borrower, any guarantor or any other Person, each Australian Facility Borrower hereby waiving all notice of any such delay, extension, release, substitution, renewal, compromise or other indulgence, and hereby consenting to be bound thereby as fully and effectually as if it had expressly agreed thereto in advance. The liability of each Australian Facility Borrower hereunder is direct and unconditional as to all of the Obligations hereunder in respect of the Australian Facility, and may be enforced without requiring the Australian Facility Agent or the Australian Facility Lenders first to resort to any other right, remedy or security; no Australian Facility Borrower shall have any right of subrogation, reimbursement or indemnity whatsoever, nor any right of recourse to security for any of the Obligations in respect of the Australian Facility, unless and until all of said Obligations have been paid in full. (c) Notwithstanding subsections (a) and (b) above, the joint and several liability of each Australian Facility Borrower for, and its obligation to guarantee payment of, all Obligations of the other Australian Facility Borrowers in respect of the Australian Facility shall not at any time exceed its Australian Facility Maximum Amount. 5.13 Participations. On the Closing Date and each day thereafter until the Total Facility Termination Date, each Lender (including an Australian Facility Lender if necessary) will be deemed to have absolutely, irrevocably and unconditionally purchased from each Australian Facility Lender a Participation in Australian Facility Outstandings owing to such Australian Facility Lender in an amount such that, after such purchase, each Lender will have a Facility Credit Exposure under the Australian Facility equal in amount to its Applicable Commitment Percentage multiplied by the Australian Facility Outstandings (referred to as the "Facility Participation Amount" for such Lender in the Australian Facility). Each such Participation of each Lender in the Australian Facility shall be funded in accordance with Section 11.07. 5.14 Utilization Premium. For the period beginning on the Closing Date and ending on the Total Facility Termination Date, the Australian Facility Borrowers agree to pay to the Australian Facility Agent, who shall then pay to each Australian Facility Lender at its office in Australia based on such Australian Facility Lender's Applicable Fronting Percentage of the Australian Facility, an additional interest payment which shall accrue for each day on which the amount of Australian Facility Outstandings equals or exceeds an amount equal to fifty percent (50%) of the Total Australian Facility Commitment as of such day, and shall be payable in an amount equal to the Utilization Premium multiplied by the amount of all Australian Facility Outstandings calculated on the basis of a year of 360 days. Such additional interest payment shall be payable in arrears on the last Business Day of each March, June, September and December, beginning September 30, 2000. 81 88 ARTICLE VI Changes in Circumstances 6.01 Increased Cost and Reduced Return. (a) If, after the date hereof, the adoption of any applicable law, rule, or regulation, or any change in any applicable law, rule, or regulation, or any change in the interpretation or administration thereof by any Governmental Authority, central bank, or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its Applicable Lending Office) with any request or directive (whether or not having the force of law) of any such Governmental Authority, central bank, or comparable agency: (i) shall subject such Lender (or its Applicable Lending Office) to any tax, duty, or other charge with respect to any Fixed Rate Loans, any Note, or its obligation to make or to Participate in Fixed Rate Loans; or shall change the basis of taxation of any amounts payable to such Lender (or its Applicable Lending Office) under this Agreement or any Note in respect of any Fixed Rate Loans (other than taxes imposed on the overall net income of such Lender by the jurisdiction in which such Lender has its principal office or such Applicable Lending Office); (ii) shall impose, modify, or deem applicable any reserve, special deposit, assessment, compulsory loan, or similar requirement (other than the Applicable Reserve Requirement utilized in the determination of the Eurodollar Rate or the Offshore Rate) relating to any extensions of credit or other assets of, or any deposits with or other liabilities or commitments of, such Lender (or its Applicable Lending Office), including the Applicable Facility Commitments or Applicable Fronting Commitments of such Lender hereunder; or (iii) shall impose on such Lender (or its Applicable Lending Office) or the London or applicable offshore interbank market any other condition affecting this Agreement or any Note or any of such extensions of credit or liabilities or commitments; and the result of any of the foregoing is to increase the cost to such Lender (or its Applicable Lending Office) of making, Converting into, Continuing, or maintaining or participating in any Fixed Rate Loan or to reduce any sum received or receivable by such Lender (or its Applicable Lending Office) under this Agreement or any Note with respect to any Fixed Rate Loan, then each Borrower in the Facility or Facilities in which such Lender has made, or is obligated to make, such Fixed Rate Loans to which such increased costs relate shall pay to such Lender on demand such amount or amounts as will compensate such Lender for such increased cost or reduction. If any Lender requests compensation by any Borrower under this Section 6.01(a), the applicable Borrower may, by notice to such Lender (with a copy to the Applicable Facility Agent and the Global Agent), suspend the obligation of such Lender to make or Continue Loans of the Type with respect to which such compensation is requested, or to Convert Loans of any other Type into Loans of such Type, until the event or condition giving rise to such request ceases to 82 89 be in effect (in which case the provisions of Section 6.04 shall be applicable); provided that such suspension shall not affect the right of such Lender to receive the compensation so requested. (b) If, after the date hereof, any Lender shall have determined that the adoption of any applicable law, rule, or regulation regarding capital adequacy or any change therein or in the interpretation or administration thereof by any Governmental Authority, central bank, or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, central bank, or comparable agency, has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender's obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change, request, or directive (taking into consideration its policies with respect to capital adequacy), then from time to time upon demand each Applicable Borrower in any Facility in which such Lender has made or is obligated to make Loans shall pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. (c) Each Lender shall promptly notify the Borrowers and the Agents of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section 6.01 and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming compensation under this Section 6.01 shall furnish to the Borrowers and the Agents a statement setting forth the additional amount or amounts to be paid to it hereunder which shall be conclusive in the absence of manifest error. In determining such amount, such Lender may use any reasonable averaging and attribution methods. 6.02. Limitation on Types of Loans. If on or prior to the first day of any Interest Period for any Fixed Rate Loan: (a) the Applicable Facility Agent in the Facility in which such Fixed Rate Loan is to be made or Continued or Converted determines (which determination shall be conclusive) that by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate or Offshore Rate or Canadian Facility BA Rate, as the case may be, for such Interest Period; or (b) the Required Fronting Lenders in the Facility in which such Fixed Rate Loan is to be made or Continued or Converted determine (which determination shall be conclusive) and notify the Applicable Facility Agent and the Global Agent that (i) the Eurodollar Rate will not adequately and fairly reflect the cost to the Lenders in such Facility of funding Fixed Rate Loans for such Interest Period or (ii) that the Offshore Rate does not represent, in the case of the UK Facility Lenders, the effective cost to those Lenders for deposits in the Applicable Currency of comparable amounts for the applicable Interest Period or, in the case of the Australian Facility Lenders, the effective bid rate for bills of exchange of such tenor in Australian Dollars for such Lenders or (iii) that the Canadian Facility BA Rate does not represent, in the case of the 83 90 Canadian Facility Lenders, the effective cost to those Lenders for banker's acceptances of comparable amounts for the applicable Interest Period; then the Applicable Facility Agent shall give the Applicable Borrowers prompt notice thereof specifying the relevant Type of Loans and the relevant amounts or periods, and so long as such condition remains in effect, the Applicable Lenders in such Facility or Facilities shall be under no obligation to make additional Loans of such Type, Continue Loans of such Type, or to Convert Loans of any other Type into Loans of such Type and the Applicable Borrower shall, on the last day(s) of the then current Interest Period(s) for the outstanding Loans of the affected Type, either repay such Loans or Convert such Loans into another Type of Loan in accordance with the terms of this Agreement. 6.03. Illegality. Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for any Lender or its Applicable Lending Office to make, maintain, or fund any Fixed Rate Loans hereunder, then such Lender shall promptly notify the Applicable Borrowers in the Facility or Facilities in which such Lender has made or is obligated to make such Fixed Rate Loans and such Lender's obligation to make or Continue any Fixed Rate Loans and to Convert other Types of Loans into such Fixed Rate Loans shall be suspended until such time as such Lender may again make, maintain, and fund such Fixed Rate Loans (in which case the provisions of Section 6.04 shall be applicable). 6.04. Treatment of Affected Loans. If the obligation of any Lender to make a particular Type of Fixed Rate Loan or to Continue, or to Convert Loans of any other Type into, Loans of a particular Type shall be suspended pursuant to Section 6.01 or 6.03 hereof (Loans of such Type being herein called "Affected Loans" and such Type being herein called the "Affected Type"), such Lender's Affected Loans shall be automatically Converted into, in the case of the US Facility, the Canadian Facility or the Australian Facility, a Floating Rate Loan applicable to the Facility or Facilities in which the Affected Loans were made or, in the case of the UK Facility, a UK Facility Alternative Rate Loan (each referred to as "Substitute Base Rate Loans") on the last day(s) of the then current Interest Period(s) for Affected Loans (or, in the case of a Conversion required by Section 6.03 hereof, on such earlier date as such Lender may specify to the Applicable Borrower with a copy to the Applicable Facility Agent and the Global Agent) and, unless and until such Lender gives notice as provided below that the circumstances specified in Section 6.01 or 6.03 hereof that gave rise to such Conversion no longer exist: (a) to the extent that such Lender's Affected Loans have been so Converted, all payments and prepayments of principal that would otherwise be applied to such Lender's Affected Loans shall be applied instead to its Substitute Base Rate Loans; and (b) all Loans that would otherwise be made or Continued by such Lender as Loans of the Affected Type shall be made or Continued instead as Substitute Base Rate Loans, and all Loans of such Lender that would otherwise be Converted into Loans of the Affected Type shall be Converted instead into (or shall remain as) Substitute Base Rate Loans. If such Lender gives notice to the Applicable Borrowers (with a copy to the Applicable Facility Agent and the Global Agent) that the circumstances specified in Section 6.01 or 6.03 hereof that 84 91 gave rise to the Conversion of such Lender's Affected Loans pursuant to this Section 6.04 no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when Loans of the Affected Type made by other Lenders are outstanding, such Lender's Substitute Base Rate Loans shall be automatically Converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding Loans of the Affected Type, to the extent necessary so that, after giving effect thereto, all Loans held by the Lenders holding Loans of the Affected Type and by such Lender are held pro rata (as to principal amounts, Types, and Interest Periods) in accordance with their respective Applicable Fronting Percentage applicable to the Facility or Facilities in which the Affected Loans were made. 6.05. Compensation. Upon the request of any Lender, each Applicable Borrower in any Facility in which such Lender has made or is obligated to make Loans shall pay to such Lender such amount or amounts as shall be sufficient (in the reasonable opinion of such Lender) to compensate it for any loss, cost, or expense (including loss of anticipated profits) incurred by it as a result of: (a) any payment, prepayment, or Conversion of a Fixed Rate Loan for any reason (including, without limitation, the acceleration of the Loans pursuant to Section 11.01) on a date other than the last day of the Interest Period for such Loan; or (b) any failure by the Applicable Borrower for any reason (including, without limitation, the failure of any condition precedent specified in Article VII to be satisfied) to borrow, Convert, Continue, or prepay a Fixed Rate Loan on the date for such borrowing, Conversion, Continuation, or prepayment specified in the relevant notice of borrowing, prepayment, Continuation, or Conversion under this Agreement. 6.06 Taxes. (a) Any and all payments by any Borrower to any Lender or any Agent under this Agreement and any other Loan Document shall be made free and clear of, and without deduction or withholding for, any Taxes. In addition, each Borrower shall pay all Other Taxes. (b) If any Borrower shall be required by law to deduct or withhold any Taxes, Other Taxes or Further Taxes from or in respect of any sum payable hereunder to any Lender or any Agent, then: (i) the sum payable shall be increased as necessary so that, after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section 6.06), such Lender or Agent, as the case may be, receives and retains an amount equal to the sum it would have received and retained had no such deductions or withholdings been made; (ii) such Borrower shall make such deductions and withholdings; (iii) such Borrower shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law; and 85 92 (iv) such Borrower shall also pay to such Lender or Applicable Facility Agent for the account of such Lender, at the time interest is paid, Further Taxes in the amount that the respective Lender specifies as necessary to preserve the after-tax yield the Lender would have received if such Taxes, Other Taxes or Further Taxes had not been imposed. (c) The Company and each Borrower jointly and severally agree to indemnify and hold harmless each Lender and each Agent for the full amount of (i) Taxes, (ii) Other Taxes, and (iii) Further Taxes in the amount that the respective Lender specifies as necessary to preserve the after-tax yield the Lender would have received if such Taxes, Other Taxes or Further Taxes had not been imposed, and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes, Other Taxes or Further Taxes were correctly or legally asserted. Payment under this indemnification shall be made within 30 days after the date the applicable Lender or Agent makes written demand therefor. (d) Within 30 days after the date of any payment by the applicable Borrower of Taxes, Other Taxes or Further Taxes, such Borrower shall furnish to each Applicable Lender or the Applicable Facility Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment satisfactory to such Lender or Agent. (e) If any Borrower is required to pay any amount to any Lender or Agent pursuant to subsection (b) or (c) of this Section 6.06, then such Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its Applicable Lending Office so as to eliminate any such additional payment by such Borrower which may thereafter accrue, if such change in the sole judgment of such Lender is not otherwise disadvantageous to such Lender. (f) Each US Facility Lender organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement in the case of each Lender listed on the signature pages hereof and on or prior to the date on which it becomes a US Facility Lender in the case of each other Lender, and from time to time thereafter if requested in writing by any US Facility Borrower or the US Facility Agent (but only so long as such Lender remains lawfully able to do so), shall provide the Company and the US Facility Agent with (i) Internal Revenue Service Form 1001 or 4224, as appropriate, or any successor form prescribed by the Internal Revenue Service, certifying that such Lender is entitled to benefits under an income tax treaty to which the United States is a party which reduces the rate of withholding tax on payments of interest or certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States, (ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any successor form prescribed by the Internal Revenue Service, and (iii) any other form or certificate required by any taxing authority (including any certificate required by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying that such Lender is entitled to an exemption from or a reduced rate of tax on payments pursuant to this Agreement or any of the other Loan Documents. (g) Each UK Facility Lender (other than a Lender entitled to receive payments of interest in respect of each UK Facility Loan free of withholding or deduction for or on account of 86 93 United Kingdom income tax under Section 349(3)(a) of the Income and Corporation Taxes Act 1988 of the United Kingdom (a "UK Qualifying Lender"); provided that this subsection (e) shall apply to a UK Qualifying Lender which loses such status, other than through a change in any applicable law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof after the Closing Date or effective date thereafter it becomes a Lender, from the date of such loss) shall deliver to the appropriate Person such application forms, certificates, documents or other evidence as may be required from time to time, properly completed and duly executed by such UK Facility Lender, to enable the UK Facility Borrowers to be able to pay interest on the UK Facility Loans of such UK Facility Lender without withholding or deduction for or on account of any United Kingdom income tax. (h) Each Canadian Facility Lender that is organized under the laws of any jurisdiction other than Canada or any political subdivision thereof (a "Non-Canadian Lender") agrees to deliver to the Canadian Facility Borrower and Canadian Facility Agent upon request such certificates, documents or other evidence as may be required from time to time, properly completed and duly executed by such Non-Canadian Lender, to establish the basis for any applicable exemption from or reduction of taxes with respect to any payments to such Non-Canadian Lender of principal, interest, fees, commissions or any other amount payable under this Agreement or the Canadian Facility Loans. (i) Each Australian Facility Lender that is organized under the laws of any jurisdiction other than Australia or any political subdivision thereof, (a "Non-Australian Lender") agrees to deliver to the Australian Facility Borrowers and Australian Facility Agent upon request such certificates, documents or other evidence as may be required from time to time, properly completed and duly executed by such Non-Australian Lender, to establish the basis for any applicable exemption from or reduction of taxes with respect to any payments to such Non-Australian Lender of principal, interest, fees, commissions or any other amount payable under this Agreement or the Australian Facility Loans, other than with respect to payments made on or in connection with Australian Facility Loans advanced in New Zealand Dollars. (j) For any period with respect to which a Lender has failed to provide the Company and the Applicable Facility Agent with the appropriate form pursuant to Section 6.06(f), (g), (h) or (i), as applicable (unless such failure is due to a change in treaty, law, or regulation occurring subsequent to the date on which a form originally was required to be provided), such Lender shall not be entitled to indemnification under Section 6.06(a), (b), or (c) with respect to Taxes imposed by the United States, United Kingdom, Canada or Australia, as applicable (specifically exempting from this Section 6.06(j), and thereby preserving each Lender's rights to indemnification hereunder with respect to, Taxes imposed by New Zealand); provided, however, that should a Lender, which is otherwise exempt from or subject to a reduced rate of withholding tax, become subject to Taxes because of its failure to deliver a form required hereunder, each Applicable Borrower shall take such steps as such Lender shall reasonably request to assist such Lender to recover such Taxes. 87 94 (k) Without prejudice to the survival of any other agreement of any Borrower hereunder, the agreements and obligations of each Borrower contained in this Section 6.06 shall survive the occurrence of the Total Facility Repayment Date. 6.07 Replacement Lender. In the event any Lender seeks additional compensation pursuant to this Article VI or is restricted from making any Fixed Rate Loan under this Agreement (a "Restricted Lender"), so long as no Default or Event of Default shall have occurred and be continuing and the Company has obtained a commitment from another Lender or an Eligible Assignee to become a Lender for all purposes hereunder, the Company may cause such Restricted Lender to be replaced by, and to assign all its Loans, Applicable Facility Commitments, Applicable Fronting Commitments, Participations and other Obligations owing thereto pursuant to Section 13.01 to, such other Lender or an Eligible Assignee reasonably acceptable to the Applicable Facility Agent(s) and the Global Agent which is not similarly restricted and will not seek such additional compensation. Such Restricted Lender agrees to execute and to deliver to the Global Agent and to each Applicable Facility Agent of each Facility in which such Restricted Lender has made or was obligated to make Loans an Assignment and Acceptance with such replacement Lender as provided in Section 13.01 hereof upon payment at par of all principal, interest, fees and other amounts owing under this Agreement to such Restricted Lender. The Company shall pay to the Applicable Facility Agent the processing fee required by Section 13.01(a)(iv) in connection with such assignment. 6.08 Funding. In the event any Borrower elects to obtain any Loans as Fixed Rate Loans, or elects to Continue any Fixed Rate Loans or Convert any portion of the principal amount of any Floating Rate Loans to Fixed Rate Loans, each Lender may, if it so elects, fulfill its obligation to make or Continue any portion of the principal amount of any Loan as, or to Convert any portion of the principal amount of any Loan into, a Fixed Rate Loan in accordance with any election made by such Borrower by causing a foreign branch or affiliate of such Lender or an international banking facility created by such Lender to make such Fixed Rate Loan; provided, that in such event such Fixed Rate Loan shall be deemed to have been made by such Lender, and the obligation of the Borrower to repay such Fixed Rate Loan shall nevertheless be to such Lender and shall be deemed to be held by such Lender, to the extent of such Fixed Rate Loan, for the account of such foreign branch, affiliate or international banking facility. In addition, the Borrowers hereby consent and agree that, for purposes of any determination to be made for purposes of this Agreement (including Sections 6.01, 6.02, 6.03 and 6.04), it shall be conclusively assumed that each Lender elected to fund all Fixed Rate Loans by purchasing deposits in the Applicable Currency in its eurocurrency office's interbank eurocurrency market. 6.09 Economic and Monetary Union in the European Community. (a) As a result of the implementation of the European economic and monetary union ("EMU"), the French Franc and the euro are at the Closing Date, and anticipated until December 31, 2001 to be, both recognized by the central bank or comparable governmental authority of France and, subject to Section 6.09(e) below, any amount borrowed hereunder by any party hereto in the French Franc shall be payable in French Francs and any amount borrowed hereunder in the euro shall be payable in the euro. After the European Central Bank and/or the comparable government authority ceases to recognize the French Franc, then the amount so 88 95 payable shall be determined by redenominating or converting such French Francs into the euro at the exchange rate officially fixed by the European Central Bank for the purpose of implementing the EMU. (b) The Applicable Borrowers shall from time to time, at the request of any Lender, pay to such Lender the amount of any losses, damages, liabilities, claims, reduction in yield, additional expense or increased cost incurred by, or of any reduction in any amount payable to or in the effective return on its capital to, or any decrease or delay in the payment of interest or other return foregone by, such Lender or any of its affiliates as a result of any political, tax, liquidity, currency exchange or market risk resulting from the introduction of, changeover to or operation of the euro in any applicable nation or eurocurrency market. (c) Without prejudice and in addition to any method of conversion or rounding prescribed by any EMU Legislation and without prejudice to (i) the liabilities for Indebtedness of the Borrowers to the Lenders under or pursuant to this Agreement or (ii) each Lender's Commitment, any reference in this Agreement to a minimum amount (or an integral multiple thereof) in a national currency of a Subsequent Participant to be paid to or by the UK Facility Agent shall immediately, upon it becoming a Participating Member State, be replaced by a reference to such reasonably comparable and convenient amount (or an integral multiple thereof) in the euro unit as the UK Facility Agent may specify. (d) Notwithstanding Sections 3.02, 3.03 and 3.04, if and to the extent that EMU Legislation provides that amounts denominated in the euro or French Franc may be paid within France in either the euro or the French Franc by crediting an account of the creditor in France, payments with respect to the UK Facility Alternative Currency Tranche may be made in either the euro or French Franc. (e) The UK Facility Agent may from time to time further modify the terms of, and practices contemplated by, this Agreement with respect to the euro to the extent the UK Facility Agent determines, in its reasonable discretion, that such modifications are necessary or convenient to reflect new laws, regulations, customs or practices developed in connection with the euro. The UK Facility Agent may effect such modifications, and this Agreement shall be deemed so amended, without the consent of the Borrower or Lenders to the extent such modifications are not materially disadvantageous to the Borrower and the Lenders, upon notice thereto. 89 96 ARTICLE VII Conditions to Making Loans 7.01 Conditions of Initial Advance. The obligation of the Lenders to make the initial Advance is subject to the following conditions precedent: (a) The Global Agent shall have received, on the Closing Date in form and substance satisfactory to the Agents and the Lenders the following: (i) executed originals of each of this Agreement and the Notes and the other Loan Documents, together with all schedules and exhibits thereto in form and substance satisfactory to the Agents and the Lenders; (ii) favorable written opinion of counsel to the Company as US Facility Borrower and Guarantor, and special U.S. counsel to each other Borrower dated the Closing Date, addressed to the Agents and the Lenders and satisfactory to special counsel to the Global Agent, substantially in the form of Exhibit G attached hereto; (iii) resolutions of the board of directors (or of the appropriate committee thereof) of each of the Borrowers certified by its secretary or assistant secretary as of the Closing Date, approving and adopting the Loan Documents to be executed by such Borrower, and authorizing the execution and delivery thereof; specimen signatures of officers of each Borrower executing the Loan Documents, certified by the Secretary or Assistant Secretary of such Borrower; (iv) the Organizational Documents of each of the Borrowers certified as of a recent date by the Secretary of State or comparable official of its jurisdiction of organization or, if no such certification is available, by the secretary or assistant secretary of such Borrower; (v) the Operating Documents of each of the Borrowers certified as of the Closing Date as true and correct by the secretary or assistant secretary of such Borrower; (vi) certificates issued as of a recent date by the Secretary of State or comparable official of the jurisdiction of the formation of each of the Borrowers as to the corporate good standing of such Borrower therein; (vii) all fees payable by the Borrowers on the Closing Date to the Agents and the Lenders; (viii) financial statements of the Borrower and its Subsidiaries required to be delivered pursuant to Section 8.02(b)(i) hereof; 90 97 (ix) a certificate of an Authorized Representative of the Company reasonably satisfactory to the Agents and the Lenders as to the matters set forth in Section 7.01(b)(ii) through (iv) and 7.01(c)(i); and (x) such other documents, instruments, certificates and opinions as any Agent or any Lender may reasonably request on or prior to the Closing Date in connection with the consummation of the transactions contemplated hereby; (b) Each of the following shall have occurred or be true: (i) The Global Agent shall have completed all due diligence with respect to the Company and its Subsidiaries in scope and determination satisfactory to the Global Agent in its sole discretion; (ii) There shall not be any action, suit, investigation or proceeding pending or threatened in any court or before any arbitrator or governmental instrumentality that (a) purports to affect the transactions contemplated hereby, (b) would reasonably be expected to have a Material Adverse Effect or (c) would reasonably be expected to have a material adverse effect on the ability of the Loan Parties to perform their respective obligations hereunder or under the other Loan Documents; (iii) The Company and its Subsidiaries shall be in compliance with all existing financial and material contractual obligations before and immediately after giving effect to the financings and other transactions contemplated hereby; (iv) The Company and its Subsidiaries shall have received all government, shareholder and third-party approvals, consents and waivers, and shall have made or given all necessary filings and notices, as shall be required to consummate the transactions contemplated hereby without the occurrence of any default under, conflict with or violation of (A) any applicable law, rule, regulation, order or decree of any court or other Governmental Authority or arbitral authority, (B) any Organizational Document or Operating Agreements of the Company or any Subsidiary or (C) any agreement, document or instrument to which any of the Company or any Subsidiary is a party or by which any of them or their properties is bound, if such default, conflict or violation would reasonably be expected to result in a Material Adverse Effect; and all applicable waiting periods shall have expired without any action being taken or threatened in writing by any authority that could restrain, prevent or impose any material adverse conditions on the making of any Loan or other transactions contemplated hereby, and no law or regulation shall be applicable which would reasonably be expected to have a Material Adverse Effect; and (c) In the good faith judgment of the Agents and the Lenders: (i) There shall not have occurred a material adverse change in the business, assets, liabilities, operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken as a whole since February 29, 2000 or in the facts or 91 98 information regarding such entities most recently delivered to the Global Agent by the Company or any Borrower; (ii) There shall not have occurred and be continuing a material adverse change in the market for syndicated credit facilities similar in nature to the Facilities or a material disruption of, or a material adverse change in, financial, banking or capital market conditions, in each case as determined by the Global Agent in its reasonable discretion. 7.02 Conditions of Loans. The obligations of the Lenders to make any Advances on or subsequent to the Closing Date are subject to the satisfaction of the following conditions: (a) the Applicable Facility Agent under a specific Facility shall have received a Borrowing Notice if required hereby; (b) the representations and warranties of the Borrowers set forth in Article VII hereof and in each of the other Loan Documents shall be true and correct on and as of the date of such Advance, with the same effect as though such representations and warranties had been made on and as of such date, except to the extent that such representations and warranties expressly relate to an earlier date and except that the financial statements referred to in Section 8.02(b) shall be deemed to be those financial statements most recently delivered to the Agents and the Lenders pursuant to Section 9.01 hereof; (c) at the time of each such Advance, no Default or Event of Default shall have occurred and be continuing; (d) immediately after giving effect to a US Facility Advance, (i) the US Facility Outstandings shall not exceed the Total US Facility Commitment and (ii) the US Facility Revolving Credit Outstandings shall not exceed the US Facility Revolving Credit Facility; (e) immediately after giving effect to a Canadian Facility Advance, (i) the Canadian Facility Outstandings shall not exceed the Total Canadian Facility Commitment, (ii) the Canadian Facility Renewable Tranche Outstandings shall not exceed the Canadian Facility Renewable Tranche Commitment, and (iii) the Canadian Facility Full Maturity Tranche Outstandings shall not exceed the Canadian Facility Full Maturity Tranche Commitment; (f) immediately after giving effect to a UK Facility Advance, (i) the UK Facility Outstandings shall not exceed the Total UK Facility Commitment, and the sum of the French Franc Outstandings plus the euro Outstandings shall not exceed the Total UK Alternative Currency Commitment, and (ii) the aggregate amount borrowed by, and outstanding to, any UK Facility Borrower shall not exceed its UK Facility Maximum Amount; (g) immediately after giving effect to an Australian Facility Advance, (i) the Australian Facility Outstandings shall not exceed the Total Australian Facility Commitment and the New Zealand Dollar Outstandings shall not exceed the Total New Zealand Dollar Commitment, and (ii) the aggregate amount borrowed by, and outstanding to, any Australian Facility Borrower shall not exceed its Australian Facility Maximum Amount. 92 99 Each request for a borrowing, Continuation or Conversion of Loans shall constitute a representation and warranty by the Borrowers that the conditions set forth in clauses (b) and (c) above have been satisfied as of the date thereof and that as of the date of such Advance there has not been any material adverse change in the business, operations or financial condition of the Company and its Subsidiaries. 93 100 ARTICLE VIII Representations and Warranties 8.01 Representations and Warranties as to Borrowers and Subsidiaries. Each Borrower represents and warrants to and in favor of the Agents and each Lender with respect to itself and to its Subsidiaries (which representations and warranties shall survive the delivery of the documents mentioned herein and the making of Loans) that: (a) Organization and Authority. (i) each Borrower and each of its Subsidiaries is an entity duly organized and validly existing under the laws of the jurisdiction of its formation; (ii) each Borrower and each of its Subsidiaries (A) has the requisite power and authority to own its properties and assets and to carry on its business as now being conducted, and (B) is qualified to do business in every jurisdiction in which failure so to qualify would have a Material Adverse Effect; (iii) each Borrower has the requisite power and authority to execute, deliver and perform this Agreement and the Notes, and to borrow hereunder, and to execute, deliver and perform each of the other Loan Documents to which it is a party, including without limitation, in the case of the Company, the Guaranty; and (iv) when executed and delivered, each of the Loan Documents to which such Borrower is a party will be valid and binding obligations of such Borrower, enforceable against such Borrower in accordance with its terms, subject to the effect of any applicable bankruptcy, moratorium, insolvency, reorganization or other similar law affecting the enforceability of creditors' rights generally and to the effect of general principles of equity which may limit the availability of equitable remedies (whether in a proceeding at law or in equity). (b) Loan Documents. The execution, delivery and performance by each Borrower of each of the Loan Documents to which it is a party: (i) have been duly authorized by all requisite Organizational Action (including any required shareholder approval) of such Borrower required for the lawful execution, delivery and performance thereof; (ii) do not violate any provisions of (A) applicable law, rule or regulation, (B) any judgment, writ, order, determination, decree or arbitral award of any Governmental Authority or arbitral authority binding on such Borrower or its Subsidiaries or its or their properties, (C) the Organizational Documents or Operating Documents of such Borrower or its Subsidiaries or (D) any provisions of any indenture, agreement or other instrument to which such Borrower or any of its Subsidiaries is a party, or by which the properties or assets of such Borrower or its Subsidiaries are bound; 94 101 (iii) does not and will not be in conflict with, result in a breach of or constitute an event of default, or an event which, with notice or lapse of time, or both, would constitute an event of default, under any contract, indenture, agreement or other instrument or document to which the Borrower or any of its Subsidiaries is a party or by which any of their properties are bound; and (iv) does not and will not result in the creation or imposition of any Lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of such Borrower or any of its Subsidiaries. (c) Solvency. Each Borrower and each of its Subsidiaries is Solvent after giving effect to the transactions contemplated by this Agreement and the other Loan Documents and assuming an Advance on the Closing Date equal to the Applicable Total Facility Commitment for the Facility in which such Borrower is an Applicable Borrower. 8.02 Representations and Warranties of the Company. The Company represents and warrants with respect to itself and its Subsidiaries (which representations and warranties shall survive the delivery of the documents mentioned herein and the making of Loans) that: (a) Subsidiaries and Stockholders. It has no Subsidiaries other than those Persons listed as Subsidiaries in Schedule 8.02(a) hereto and additional Subsidiaries acquired after the Closing Date as permitted under Section 10.08 hereof. The outstanding shares or other equity interests (including options, warrants and other rights to acquire any interest) of each such Subsidiary have been duly authorized and validly issued and are fully paid and nonassessable; and the Company and each such Subsidiary owns beneficially and of record all the shares and other interests it is listed as owning in Schedule 8.02(a), free and clear of any Lien. (b) Financial Condition. (i) The Company has heretofore furnished to each Lender an audited unqualified consolidated balance sheet of the Company and its Subsidiaries as at February 29, 2000 and the notes thereto and the related consolidated statements of income, stockholders' equity and cash flow for the Fiscal Year then ended, all as examined and certified by Ernst & Young, LLP. Except as set forth therein, such financial statements (including the notes thereto) present fairly the financial condition of the Company and its Subsidiaries as of the end of such Fiscal Year and results of their operations and the changes in their stockholders' equity for the Fiscal Year then ended, all in conformity with Generally Accepted Accounting Principles applied on a Consistent Basis. Except as disclosed therein, neither the Company nor any Subsidiary has, as of the date hereof, any known and material direct liability; (ii) since the later of (A) the date of the audited financial statements delivered pursuant to Section 8.02(b)(i) hereof or (B) the date of the audited financial statements most recently delivered pursuant to Section 9.01(a) hereof, the Company and its Subsidiaries have not suffered or endured any Material Adverse Effect; and 95 102 (iii) except as set forth in (A) the audited financial statements delivered pursuant to Section 8.02(b)(i) hereof or (B) the audited financial statements most recently delivered pursuant to Section 9.01(a) hereof, the Company and its Subsidiaries have not incurred, other than in the ordinary course of business, any material Contingent Obligation or other liability, obligation or commitment, contingent or otherwise, which remain outstanding or unsatisfied. (c) Title to Properties. The Company and its Subsidiaries have good and marketable title to all their respective real and personal properties, subject to no transfer restrictions, or Liens of any kind, except for the transfer restrictions and Liens permitted under Section 10.03 hereof. (d) Taxes. The Company and its Subsidiaries have filed or caused to be filed all federal, state and local tax returns which are required to be filed by them and, except for taxes and assessments being contested in good faith by appropriate proceedings diligently conducted and against which satisfactory reserves reflected in the financial statements described in Section 8.02(b)(i) as required by Generally Accepted Accounting Principles have been established, have paid or caused to be paid all taxes as shown on said returns or on any assessment received by them, to the extent that such taxes have become due. (e) Other Agreements. Neither the Company nor any Subsidiary is (i) a party to or subject to any judgment, order, decree or any agreement or instrument, or subject to other restrictions, which individually or in the aggregate could reasonably be expected to result in a Material Adverse Effect; or (ii) in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument to which the Company or any Subsidiary is a party, which default, if not remedied within any applicable grace period, could reasonably be expected to result in a Material Adverse Effect. (f) Litigation. Except as set forth on Schedule 8.02(f) attached hereto, there is no action, suit, investigation or proceeding at law or in equity or by or before any governmental instrumentality or agency or arbitral body pending, or, to the best knowledge of the Company, threatened by or against the Company or any Subsidiary or affecting the Company or any Subsidiary or any properties or rights of the Company or any Subsidiary, which, if determined adversely to the Company or such Subsidiary, could reasonably be expected to result in a Material Adverse Effect. (g) Margin Stock. The proceeds of the borrowings made hereunder will be used by the Company and the other Borrowers only for the purposes set forth in Section 2.11, Section 3.11, Section 4.11 and Section 5.11 hereof. None of such proceeds will be used, directly or indirectly, for the purpose of purchasing or carrying any margin stock (as such term is defined in Regulation U, as amended (12 C.F.R. Part 221), of the Board) or for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry margin stock or for 96 103 any other purpose which might constitute any of the Loans under this Agreement a "purpose credit" within the meaning of said Regulation U or Regulation X (12 C.F.R. Part 224) of the Board. Neither the Company nor any agent acting in its behalf has taken or will take any action which might cause this Agreement or any of the documents or instruments delivered pursuant hereto to violate any regulation of the Board or to violate the Securities Exchange Act of 1934, or the Securities Act of 1933, or any state securities laws, in each case as in effect on the date hereof. (h) Intellectual Property. The Company and its Subsidiaries own or have the right to use, under valid license agreements or otherwise, all patents, licenses, franchises, trademarks, trademark rights, trade names, trade name rights, trade secrets, copyrights and know how necessary and material to the conduct of their businesses as now conducted, in all cases without known conflict with any patent, license, franchise, trademark, trade secret and confidential commercial or proprietary information, trade name, copyright, rights to trade secrets or other proprietary rights of any other Person. (i) No Untrue Statement. Neither (a) this Agreement or any other Loan Document or certificate or document executed and delivered by or on behalf of the Company or any other Borrower or any Subsidiary in accordance with or pursuant to any Loan Document nor (b) any statement, representation or warranty provided to the Agents in connection with the negotiation or preparation of the Loan Documents contains any misrepresentation or untrue statement of material fact or omits to state a material fact necessary, in light of the circumstance under which it was made, in order to make any such warranty, representation or statement contained therein not misleading. (j) No Consents, Etc. Neither the respective businesses or properties of the Company or any Subsidiary nor any circumstance in connection with the execution, delivery and performance of the Loan Documents and the transactions contemplated thereby, is such as to require a consent, approval or authorization of, or filing, registration or qualification with, any Governmental Authority or any other Person on the part of the Company or any Borrower or any Subsidiary as a condition to the execution, delivery and performance of, or consummation of the transactions contemplated by, this Agreement or the other Loan Documents, or if so, such consent, approval, authorization, filing, registration or qualification has been duly obtained or effected, as the case may be. (k) ERISA. (i) The Company, each ERISA Affiliate and each Subsidiary is in compliance with all applicable provisions of ERISA, the Code and the regulations and published interpretations thereunder and in compliance with all Foreign Benefit Laws and the regulations and published interpretations thereunder with respect to all Employee Benefit Plans, except for any required amendments for which the remedial amendment period as defined in Section 401(b) of the Code has not yet expired and except for failures to so comply that would not, in the aggregate, reasonably be expected to result in a Material Adverse Effect. Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code has been determined, or the Company or such ERISA 97 104 Affiliate or its Subsidiaries is in the process of obtaining a determination by the Internal Revenue Service, to be so qualified, each trust related to such Employee Benefit Plan has been determined to be exempt under Section 501(a) of the Code, and each Employee Benefit Plan subject to any Foreign Benefit Law has received the required approvals by any Governmental Authority regulating such Employee Benefit Plan, except for such qualifications, exemptions and approvals the absence of which could not reasonably be expected to result in a Material Adverse Effect. No material liability has been incurred by the Company or any ERISA Affiliate (including, without limitation, taxes, penalties, funding deficiencies and required contributions, installments or other payments) which remains unsatisfied with respect to any Employee Benefit Plan or any Multiemployer Plan. No Termination Event has occurred or is reasonably expected to occur with respect to any Employee Benefit Plan, and neither the Company nor any ERISA Affiliate has incurred any unpaid withdrawal liability with respect to any Multiemployer Plan, which event or liability could reasonably be expected to result in a Material Adverse Effect; and (ii) To the best of the Company's knowledge, each Employee Benefit Plan subject to Title IV of ERISA or the funding of which is regulated by any Foreign Benefit Law, maintained by the Company, any ERISA Affiliate or any Subsidiary, has been administered in accordance with its terms and is in compliance in all material respects with all applicable requirements of ERISA and other applicable laws, regulations and rules and any applicable Foreign Benefit Law. (l) No Default. As of the date hereof, there does not exist any Default or Event of Default hereunder. (m) Hazardous Materials. The Company, each Borrower and each Subsidiary are in compliance with all applicable Environmental Laws, except for such noncompliance that could not reasonably be expected to result in a Material Adverse Effect, and have been issued and maintain all required federal, state and local permits, licenses, certificates and approvals pertaining to Hazardous Materials that are necessary to the conduct of their businesses, except for any such permits, licenses, certificates or approvals the absence of which could not reasonably be expected to result in a Material Adverse Effect. Neither the Company, any Borrower nor any Subsidiary has been notified of any pending or threatened action, suit, proceeding or investigation, and neither the Company, any Borrower nor any Subsidiary is aware of any fact, which (A) calls into question, or could reasonably be expected to call into question, compliance by the Company, any Borrower or any Subsidiary with any Environmental Laws, except for such noncompliance that could not reasonably be expected to result in a Material Adverse Effect, or (B) seeks, or could reasonably be expected to form the basis of a meritorious proceeding to seek to suspend, revoke or terminate any license, permit, certification or approval necessary for the operation of the Company's or any Subsidiary's facility or the generation, handling, storage, treatment or disposal of any Hazardous Material that is necessary to the conduct of its business, except for any such license, permit, certification or approval the absence of which could not reasonably be expected to result in a Material Adverse Effect, or (iii) seeks to cause, or could reasonably be expected to form the basis of a meritorious proceeding to cause, any property of the Company or any Subsidiary to be subject to any restrictions on ownership, use, occupancy or transferability under any Environmental Law, which such restrictions could 98 105 reasonably be expected to have a Material Adverse Effect, or (iv) constitutes a reasonable basis to conclude that the Company or any Subsidiary is a potentially responsible party with regard to any release or threatened release of a Hazardous Material. 99 106 ARTICLE IX Affirmative Covenants Until the Total Facility Repayment Date, unless the Required Lenders shall otherwise consent in writing, the Company will and will cause each Subsidiary to: 9.01 Financial Reports, Etc. (a) As soon as practical and in any event within 95 days after the end of each Fiscal Year of the Company, deliver or cause to be delivered to the Agents and each Lender (i) consolidated balance sheets of the Company and its Subsidiaries as at the end of such Fiscal Year, and the notes thereto, and the related consolidated statements of income, stockholders' equity and cash flow and the respective notes thereto for such Fiscal Year, setting forth in each case comparative financial statements for the preceding Fiscal Year, all prepared in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis and containing, with respect to the consolidated financial statements, opinions of Ernst & Young, LLP, or such other independent certified public accountants selected by the Company and approved by the Required Lenders, which are unqualified as to the scope of the audit performed and as to the "going concern" status of the Company and its Subsidiaries and without any exception not acceptable to the Lenders; (ii) a copy of the Company's Form 10-K as filed with the Securities and Exchange Commission; and (iii) a certificate of an Authorized Representative demonstrating compliance with Sections 10.01 and 10.02 of this Agreement as of such Fiscal Year end and the Outstandings under each Facility as of such Fiscal Year end, which certificate shall be in the form attached as Exhibit H; (b) as soon as practical and in any event within 50 days after the end of each fiscal quarter (except the last fiscal quarter of the Fiscal Year) of the Company, deliver to the Agents and each Lender (i) consolidated balance sheets of the Company and its Subsidiaries as at the end of such fiscal quarter and the related consolidated statements of income, stockholders' equity and cash flow for such fiscal quarter and for the period from the beginning of the Fiscal Year through the end of such reporting period, prepared without notes and accompanied by a certificate of an Authorized Representative to the effect that such financial statements present fairly the financial position of the Company and its Subsidiaries as of the end of such fiscal period and the results of their operations and the changes in their financial position for such fiscal period, in conformity with the standards set forth in GAAP with respect to interim financials; (ii) a copy of the Company's Form 10-Q for such quarterly period as filed with the Securities and Exchange Commission; and (iii) a certificate of an Authorized Representative as of such fiscal quarter end similar to that required pursuant to Section 9.01(a)(iii); (c) promptly upon their becoming available to the Company, deliver to the Agents and each Lender a copy of (i) all regular or special reports or effective registration statements which the Company or any Subsidiary shall file with the Securities and Exchange Commission (or any successor thereto) or any securities exchange, and (ii) all reports, proxy statements, 100 107 financial statements and other information distributed by the Company to its stockholders, bondholders or the financial community in general; and (d) promptly, from time to time, deliver or cause to be delivered to the Agents or to each Lender such other information regarding the Company's and each Subsidiary's operations, business affairs and financial condition as any such Agent or Lender may reasonably request to the extent such statements exist. The Agents and the Lenders are hereby authorized to deliver a copy of any such financial or other information delivered hereunder to the Lenders (or any affiliate of any Lender) or to the Agents, to any Governmental Authority having jurisdiction over any of the Agents or the Lenders pursuant to any written request therefor or in the ordinary course of examination of loan files, or to any other Person who shall acquire or consider the acquisition of a participation interest in or assignment of any Loan permitted by this Agreement. 9.02 Debt Ratings. Notify the Global Agent of any change in any Debt Rating on the same date that such change is effective. 9.03 Maintain Properties. Maintain all properties necessary to its operations in good working order and condition, ordinary wear and tear excepted, make all needed repairs, replacements and renewals to such properties, and maintain free from Liens all trademarks, trade names, patents, copyrights, trade secrets, know-how and other intellectual property and proprietary information (or adequate licenses thereto), in each case as are necessary to conduct its business as currently conducted or as contemplated hereby, all in accordance with customary business practices. 9.04 Existence, Qualification, Etc. Except as otherwise expressly permitted under Section 10.05 hereof, do or cause to be done all things necessary to preserve and keep in full force and effect its existence and all material rights and franchises, trade names, trademarks and permits and maintain its license or qualification to do business as a foreign corporation and good standing in each jurisdiction in which its ownership or lease of property or the nature of its business makes such license or qualification necessary and in which the failure to maintain such license or qualification could reasonably be expected to result in a Material Adverse Effect. 9.05 Regulations and Taxes. Comply with or contest in good faith by appropriate proceedings diligently conducted all statutes and governmental regulations and pay all taxes, assessments, governmental charges, claims for labor, supplies, rent and any other obligation which, if unpaid, might become a Lien against any of its properties except liabilities being contested in good faith by appropriate proceedings diligently conducted and against which adequate reserves as required by GAAP have been established. 9.06 Insurance. Maintain with financially sound and reputable insurers insurance with respect to its properties and business and against such liabilities, casualties and contingencies of such types and in such amounts as is customary in the case of corporations engaged in the same or a similar business or having similar properties similarly situated. 101 108 9.07 True Books. Keep true books of record and account in which full, true and correct entries will be made of all of its dealings and transactions, and set up on its books such reserves as may be required by Generally Accepted Accounting Principles with respect to doubtful accounts and all taxes, assessments, charges, levies and claims and with respect to its business in general, and include such reserves in interim as well as year-end financial statements. 9.08 Right of Inspection. Permit any Person designated by any Lender or any Agent, at such Lender's or Agent's expense, to visit and inspect any of the properties, corporate books and financial reports of the Company and its Subsidiaries, and to discuss its affairs, finances and accounts with its principal officers and independent certified public accountants, all at such reasonable times, at reasonable intervals and with reasonable prior notice; provided, however, that following the occurrence and during the continuation of any Default or Event of Default, such visits or inspections shall be at the expense of the Company. 9.09 Observe all Laws. Conform to and duly observe in all material respects all laws, rules and regulations and all other valid requirements of any Governmental Authority with respect to the conduct of its business. 9.10 Covenants Extending to Subsidiaries. Cause each of its Subsidiaries to do with respect to itself, its business and its assets, each of the things required of the Company in Sections 9.02 through 9.08, inclusive, Section 9.14 and Section 9.16. 9.11 Officer's Knowledge of Default. Upon any executive officer of the Company obtaining knowledge of the occurrence of any Default or Event of Default hereunder or under any other obligation of the Company or any Subsidiary to any Lender, or any event, development or occurrence which could reasonably be expected to result in a Material Adverse Effect, cause such executive officer or an Authorized Representative promptly to notify the Agents and each of the Lenders of the nature thereof, the period of existence thereof, and what action the Company or such Subsidiary proposes to take with respect thereto. 9.12 Suits or Other Proceedings. Upon any executive officer of the Company obtaining knowledge of any litigation, dispute or other proceedings being instituted or threatened against the Company or any Subsidiaries, or any attachment, levy, execution or other process being instituted against any assets of the Company or any Subsidiaries, making a claim or claims in an aggregate amount greater than $10,000,000 not otherwise covered by insurance, or could reasonably be expected to have a material adverse effect on the Company and its Subsidiaries, cause such executive officer or an Authorized Representative promptly to deliver to the Agents and each of the Lenders written notice thereof stating the nature and status of such litigation, dispute, proceeding, levy, execution or other process. 9.13 Environmental Compliance. (a) If the Company or any Subsidiary shall receive in writing any letter, notice, complaint, order, directive, claim or citation alleging that the Company or any Subsidiary (i) has violated any Environmental Law, (ii) has released or is about to release any Hazardous Material other than in compliance with all Environmental Laws (or suffered or permitted such action by 102 109 any other Person on or in respect of property owned or operated by the Company or any Subsidiary or any other Person handling, transporting, or disposing of any Hazardous Material on behalf of the Company or any Subsidiary), or (iii) is liable for the costs of cleaning up, removing, remediating or responding to a release or threatened release of Hazardous Materials, which allegation in any of the foregoing instances, if true, could reasonably be expected to result in a Material Adverse Effect, the Company and any Subsidiary shall (a) provide prompt written notice thereof to the Agents describing in reasonable detail the nature of the matter and what action the Company or the applicable Subsidiary proposes to take with respect thereto, and (b) within the time period permitted by the applicable Environmental Law or the Governmental Authority responsible for enforcing such Environmental Law, remove or remedy, or cause the applicable Subsidiary to remove or remedy, such violation or release or satisfy such liability, unless and only during the period that the applicability of the Environmental Law, the fact of such violation or liability or the action required to remove or remedy such violation is being contested by the Company or the applicable Subsidiary by appropriate proceedings diligently conducted and all reserves with respect thereto as may be required under Generally Accepted Accounting Principles, if any, have been made, and no Lien in connection therewith shall have attached to any property of the Company or the applicable Subsidiary which shall have become enforceable against creditors of such Person. (b) Except for Hazardous Materials necessary for the routine maintenance of the properties owned or operated by the Company and its Subsidiaries or as brought on to such properties in the ordinary course of the Company's or any Subsidiary's business, which Hazardous Material shall be used in compliance in all material respects with all applicable Environmental Laws, the Company covenants that it shall, and shall cause each Subsidiary to, not permit any Hazardous Materials to be brought on to the real property owned or operated by the Company and its Subsidiaries, or if so brought or found located thereon, shall be immediately removed, with proper disposal, and all environmental cleanup requirements shall be diligently undertaken pursuant to all Environmental Laws unless the presence of such Hazardous Materials could not reasonably be expected to result in a Material Adverse Effect. 9.14 Further Assurances. At the Borrowers' cost and expense, upon request of any of the Agents, duly execute and deliver or cause to be duly executed and delivered, to the Agents such further instruments, documents and certificates, and do and cause to be done such further acts that may be reasonably necessary or advisable in the opinion of the Agents or any of them to carry out more effectively the provisions and purposes of this Agreement and the other Loan Documents. 9.15 Continued Operations. Continue at all times to conduct its business and engage principally in the same line or lines of business substantially as heretofore conducted. 9.16 Use of Proceeds. Use the proceeds of the Loans solely for the purposes specified in Sections 2.11, 3.11, 4.11 and 5.11, as applicable. 103 110 ARTICLE X Negative Covenants Until the Total Facility Repayment Date, unless the Required Lenders shall otherwise consent in writing, the Company will not, nor will it permit any Subsidiary to: 10.01 Consolidated Funded Indebtedness to Consolidated Total Capitalization. Permit the ratio of Consolidated Funded Indebtedness to Consolidated Total Capitalization to exceed 0.55 to 1.00 at any time. 10.02 Consolidated EBIT to Consolidated Interest Expense. Permit the ratio of Consolidated EBIT to Consolidated Interest Expense for the Four-Quarter Period immediately preceding the date of computation to be less than 3.00 to 1.00 at any time. 10.03 Liens . Incur, create or permit to exist any Lien, charge or other encumbrance of any nature whatsoever with respect to any property or assets now owned or hereafter acquired by the Company or any of its Subsidiaries, other than (a) Liens existing as of the date hereof, and (i) as set forth in Schedule 10.03 attached hereto, (ii) as otherwise exist in France, South Africa and Mexico or (iii) which attach only to office or retail equipment; (b) Liens imposed by law for taxes, assessments or charges of any Governmental Authority for claims not yet due or which are being contested in good faith by appropriate proceedings diligently conducted, and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with Generally Accepted Accounting Principles; (c) statutory or contractual Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and other Liens imposed by law or created in the ordinary course of business and in existence less than 90 days from the date of creation thereof for amounts not yet due or which are being contested in good faith by appropriate proceedings diligently conducted, and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with Generally Accepted Accounting Principles; (d) Liens incurred or deposits made (i) in the ordinary course of business (including, without limitation, performance and surety bonds) in connection with workers' compensation, unemployment insurance and other types of social security benefits or (ii) to secure the performance of tenders, bids, leases, contracts (other than for the repayment of Indebtedness), statutory obligations and other similar obligations or arising as a result of progress payments under government contracts; (e) easements (including reciprocal easement agreements and utility agreements), rights-of-way, covenants, consents, reservations, encroachments or title defects, variations and zoning and other restrictions, charges or encumbrances (whether or not recorded) affecting real 104 111 property, which do not interfere materially with the ordinary conduct of the business of the Company or any Subsidiary and which do not materially detract from the value of the property to which they attach or materially impair the use thereof to the Company or any Subsidiary; (f) purchase money Liens to secure Indebtedness for Money Borrowed incurred to purchase fixed assets, provided such Indebtedness represents not more than 100% of the purchase price of such assets as of the date of purchase thereof and no property other than the assets so purchased secures such Indebtedness; (g) Liens arising in connection with Capital Leases provided that no such Lien shall extend to or cover any property or assets other than assets subject to the Capital Leases; and (h) other Liens not otherwise permitted by paragraphs (a) through (g) of this Section 10.03 to secure Indebtedness for Money Borrowed in an aggregate principal amount outstanding that does not result in a Default under Section 10.01 or 10.02. 10.04 Transfer of Assets. Sell, lease, transfer or otherwise dispose of any assets of the Company or any Subsidiary other than: (a) dispositions of inventory in the ordinary course of business; (b) dispositions of assets or property that are (i) substantially worn, damaged, obsolete, (ii) in the judgment of the Company, no longer useful in its business or that of any Subsidiary or (iii) replaced within a reasonable period of time with assets, property of similar or better quality performing similar functions; and (c) transfers of assets necessary to give effect to merger or consolidation transactions permitted by Section 10.05. 10.05 Merger or Consolidation. (a) Consolidate with or merge into any other Person; or (b) permit any other Person to merge into it; provided, however, that any Person may merge into the Company or any other Borrower so long as no Default or Event of Default occurs or is created or results from such transaction; and provided further, that any Subsidiary which is not a Borrower may merge with and into any other entity if the survivor is or becomes a Subsidiary of the Company. 10.06 Transactions with Affiliates. Enter into any transaction after the Closing Date, including, without limitation, the purchase, sale, lease or exchange of property, real or personal, or the rendering of any service, with any Affiliate of the Company, except (a) that such Persons may render services to the Company or its Subsidiaries for compensation at the same rates generally paid by Persons engaged in the same or similar businesses for the same or similar services, (b) that the Company or any Subsidiary may render services to such Person for 105 112 compensation at the same rates generally charged by the Company or such Subsidiary, (c) in the case of either (a) or (b), in the ordinary course of business and pursuant to the reasonable requirements of the Company's (or any Subsidiary's) business and consistent with past practice of the Company and its Subsidiaries and upon fair and reasonable terms no less favorable to the Company (or any Subsidiary) than would be obtained in a comparable arm's-length transaction with a Person not an Affiliate, and (d) that the Company or its Subsidiaries may continue those transactions described on Schedule 10.06 attached hereto. 10.07 ERISA. With respect to any Pension Plan, Employee Benefit Plan or Multiemployer Plan: (a) permit the occurrence of any Termination Event which would result in any material liability on the part of the Company, any ERISA Affiliate, or any Subsidiary to the PBGC or any Governmental Authority; or (b) permit the present value of all benefit liabilities under all Employee Benefit Plans to exceed materially the current value of the assets of such Employee Benefit Plans allocable to such benefit liabilities; or (c) permit any material accumulated funding deficiency (as defined in Section 302 of ERISA and Section 412 of the Code) with respect to any Pension Plan, whether or not waived; or (d) fail to make any contribution or payment to any Multiemployer Plan which the Company or any ERISA Affiliate may be required to make under any agreement relating to such Multiemployer Plan, or any law pertaining thereto; or (e) engage, or permit the Company or any ERISA Affiliate to engage, in any prohibited transaction under Section 406 of ERISA or Sections 4975 of the Code for which a material civil penalty pursuant to Section 502(I) of ERISA or a material tax pursuant to Section 4975 of the Code may be imposed; or (f) permit the establishment of any Employee Benefit Plan providing post-retirement welfare benefits or establish or amend any Employee Benefit Plan which establishment or amendment could result in material liability to the Company or any ERISA Affiliate or any Subsidiary or materially increase the obligation of the Company or any ERISA Affiliate or any Subsidiary to a Multiemployer Plan; or (g) fail, or permit the Company or any ERISA Affiliate or any Subsidiary to fail, to establish, maintain and operate each Employee Benefit Plan in compliance with the provisions of ERISA, the Code, all applicable Foreign Benefit Laws and all other applicable laws and the regulations and interpretations thereof except for such failure that could not reasonably be expected to result in a Material Adverse Effect. 10.08 Acquisitions. Enter into any agreement, contract, binding commitment or other arrangement providing for, or otherwise effect, the acquisition of a controlling equity or other ownership interest in, or all or substantially all of the assets of, any Person, or take any action to 106 113 solicit the tender of securities or proxies in respect thereof in order to effect any such acquisition, other than Permitted Acquisitions. 10.09 Negative Pledge. Enter into or cause, suffer or permit to exist any agreement with any Person other than the Agents and the Lenders pursuant to this Agreement or any other Loan Documents which prohibits or limits the ability of the Company or any Subsidiary to create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired. 10.10 Dissolution, Etc. Wind up, liquidate or dissolve (voluntarily or involuntarily) or commence or suffer any proceedings seeking any such winding up, liquidation or dissolution, except in connection with a merger or consolidation permitted pursuant to Section 10.05 hereof. 10.11 Restrictive Agreements. Enter into or cause, suffer or permit to exist any agreement with any other Person which prohibits, limits or restricts the ability of any Subsidiary to make any payments, directly or indirectly, to the Borrowers by way of dividends, advances, repayments of loans or advances, or other returns on investments, or any other agreement or arrangement which restricts the ability of any such Subsidiary to make any payment, directly or indirectly, to the Borrowers. 107 114 ARTICLE XI Events of Default and Acceleration 11.01 Events of Default. If any one or more of the following events (herein called "Events of Default") shall occur for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any Governmental Authority), that is to say: (a) if default shall be made in the due and punctual payment of the principal of any Loan, when and as the same shall be due and payable whether pursuant to any provision of Article II, Article III, Article IV or Article V hereof, at maturity, by acceleration or otherwise; or (b) if default shall be made in the due and punctual payment of any amount of interest on any Loan or in the due and punctual payment of any other obligation or of any fees or other amounts payable to any of the Lenders or the Agents on the date on which the same shall be due and payable and such default shall continue for five (5) days following the date such payment is due; or (c) if default shall be made in the performance or observance of any covenant set forth in Sections 9.08, 9.11, 9.12, 9.15 or 9.16 or Article X hereof; or (d) (i) if a default shall be made in the performance or observance of, or shall occur under, any covenant, agreement or provision contained in this Agreement (other than as described in clause (a), (b) or (c) above) and such default shall continue for thirty (30) or more days after the earlier of receipt of notice of such default by the Authorized Representative from any Agent or any Borrower becomes aware of such default, or (ii) if a default shall be made in the performance or observance of, or shall occur under, any covenant, agreement or provision contained in any of the other Loan Documents (including without limitation failure of the Guarantor to pay to the Lenders all of the Guarantors' Obligations in accordance with and as defined in, the Guaranty on the Business Day on which such payment has been demanded in accordance with the terms of the Guaranty) or in any instrument or document evidencing or creating any obligation, guaranty, Lien or security interest in favor of any Agent or any Lender or delivered to any of the Lenders in connection with or pursuant to this Agreement or any of the Obligations (beyond any applicable grace period contained therein), or (iii) if any Loan Document ceases to be in full force and effect (other than by reason of any action by any Agent or any Lender), or (iv) if without the written consent of all the Lenders, this Agreement or any other Loan Document shall be disaffirmed or shall terminate, be terminable or be terminated or become void or unenforceable for any reason whatsoever (other than in accordance with its terms in the absence of default or by reason of any action by the Agents or any Lender); or (e) if there shall occur (i) a default, which is not waived, in the payment of any principal, interest, premium or other amount with respect to any Indebtedness (other than the Loans and other Obligations) of the Company or any Subsidiary and the amount of such Indebtedness is not less than the US Dollar Equivalent Amount of US $20,000,000 in the 108 115 aggregate outstanding, or (ii) any other event of default as specified in any agreement or instrument under or pursuant to which any such Indebtedness may have been issued, created, assumed, guaranteed or secured by the Borrower or any Subsidiary, and in any such case set forth in clause (i) or (ii) above, such default or event of default shall continue for more than the period of grace, if any, therein specified, or such default or event of default shall permit (or, with the giving of notice or lapse of time or both, would permit) the holder of any such Indebtedness (or any agent or trustee acting on behalf of one or more holders) to accelerate the maturity thereof; or (f) if any representation, warranty or other statement of fact contained herein or in any other Loan Document shall be false or misleading in any material respect when given; or (g) if the Company or any Subsidiary shall be unable to pay its debts generally as they become due; file a petition to take advantage of any insolvency statute; make an assignment for the benefit of its creditors; commence a proceeding for the appointment of a custodian, receiver, trustee, liquidator or conservator of itself or of the whole or any substantial part of its property; file a petition or answer seeking receivership, liquidation, reorganization or arrangement or similar relief under the federal bankruptcy laws or any other applicable law or statute; or (h) if a court of competent jurisdiction shall enter an order, judgment or decree appointing a custodian, receiver, trustee, liquidator or conservator of the Company or any Subsidiary or of the whole or any substantial part of its properties and such order, judgment or decree continues unstayed and in effect for a period of sixty (60) days, or approve a petition filed against the Company or any Subsidiary seeking receivership, liquidation, reorganization or arrangement or similar relief under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state or similar law of any other country or province thereof, which petition is not dismissed within sixty (60) days; or if, under the provisions of any other law for the relief or aid of debtors, a court of competent jurisdiction shall assume custody or control of the Company or any Subsidiary or of the whole or any substantial part of its properties, which control is not relinquished within sixty (60) days; or if there is commenced against the Company or any Subsidiary any proceeding or petition seeking receivership, liquidation, reorganization, arrangement or similar relief under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state or similar law of any other country or province thereof, which proceeding or petition remains undismissed for a period of sixty (60) days; or if the Company or any Subsidiary takes any action to indicate its consent to or approval of any such proceeding or petition; or (i) if (i) one or more judgments or orders for the payment of money where the amount not covered by insurance (or the amount as to which the insurer denies liability) is in an aggregate amount in excess of the US Dollar Equivalent Amount of US $20,000,000 is rendered against the Company or any Subsidiary, or (ii) there is any attachment, injunction or execution against any of the Company's or any Subsidiary's properties for any amount in excess of the US Dollar Equivalent Amount of US $20,000,000 in the aggregate; and such judgment, attachment, injunction or execution remains unpaid, unstayed, undischarged, unbonded or undismissed for a period of thirty (30) days; or 109 116 (j) if there shall occur any Change of Control; then, and in any such event and at any time thereafter, if such Event of Default or any other Event of Default shall then be continuing, (A) either or both of the following actions may be taken: (i) the Global Agent, with the consent of the Required Lenders with respect to the Total Facilities, may, and at the direction of the Required Lenders with respect to the Total Facilities, shall, declare any obligation of the Lenders to make further Loans terminated, whereupon the obligation of each Lender to make further Loans hereunder shall terminate immediately, and (ii) the Global Agent shall at the direction of the Required Lenders with respect to the Total Facilities, at their option, declare by notice to the Borrowers any or all of the Obligations to be immediately due and payable, and the same, including all interest accrued thereon and all other obligations of the Borrowers to the Agents and the Lenders, shall forthwith become immediately due and payable without presentment, demand, protest, notice or other formality of any kind, all of which are hereby expressly waived, anything contained herein or in any instrument evidencing the Obligations to the contrary notwithstanding; provided, however, that notwithstanding the above, if there shall occur an Event of Default under clause (g) or (h) above, then the obligations of the Lenders to make Loans hereunder shall automatically terminate and any and all of the Obligations shall be immediately due and payable without the necessity of any action by the Global Agent or the Required Lenders with respect to the Total Facilities or notice by the Global Agent or the Required Lenders with respect to the Total Facilities; provided further, however, that neither the Required Lenders with respect to a specific Facility nor the Applicable Facility Agent shall have any power or authority under this Section 11.01 separate or apart from that of the Required Lenders of the Total Facilities; and (B) The Agents and each of the Lenders shall have all of the rights and remedies available under the Loan Documents or under any applicable law. 11.02 Global Agent to Act. In case any one or more Events of Default shall occur and be continuing, the Global Agent may, and at the direction of the Required Lenders with respect to the Total Facilities shall, proceed to protect and enforce their rights or remedies either by suit in equity or by action at law, or both, whether for the specific performance of any covenant, agreement or other provision contained herein or in any other Loan Document, or to enforce the payment of the Obligations or any other legal or equitable right or remedy. 11.03 Cumulative Rights. No right or remedy herein conferred upon the Lenders or the Agents is intended to be exclusive of any other rights or remedies contained herein or in any other Loan Document, and every such right or remedy shall be cumulative and shall be in addition to every other such right or remedy contained herein and therein or now or hereafter existing at law or in equity or by statute, or otherwise. 110 117 11.04 No Waiver. No course of dealing between the Borrowers and any Lender or any Agent or any failure or delay on the part of any Lender or any Agent in exercising any rights or remedies under any Loan Document or otherwise available to it shall operate as a waiver of any rights or remedies and no single or partial exercise of any rights or remedies shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or of the same right or remedy on a future occasion. 11.05 Allocation of Proceeds. If an Event of Default has occurred and not been waived, and the maturity of the Obligations has been accelerated pursuant to Article XI hereof, all payments received by the Agents hereunder in respect of any principal of or interest on the Obligations or any other amounts payable by the Borrowers hereunder shall be applied by the Agents in the following order: (a) amounts due to the Lenders pursuant to Sections 2.09, 3.09, 4.09, 5.09 and 13.05 hereof, to be applied for the ratable benefit of the lenders without distinction or preference as among facilities; (b) amounts due to the Agents pursuant to Section 12.08 hereof, to be applied for the ratable benefit of the Agents; (c) payments of interest on Loans, to be applied for the ratable benefit of the Lenders, without distinction or preference as among Australian Facility Loans, Canadian Facility Loans, UK Facility Loans and US Facility Loans; (d) payments of principal on Loans, to be applied for the ratable benefit of the Lenders, without distinction or preference as among Australian Facility Loans, Canadian Facility Loans, UK Facility Loans and US Facility Loans; (e) amounts due to the Agents or the Lenders pursuant to Section 13.10, to be applied for the ratable benefit of the Agents and the Lenders; (f) payments of all other Obligations due under any of the Loan Documents, if any, to be applied for the ratable benefit of the Lenders and the Agents; and (g) any surplus remaining after application as provided for herein, to the Borrowers or as otherwise may be required by applicable law. 11.06 Judgment Currency. The Borrowers, the Agents and each Lender hereby agree that if, in the event that a judgment is given in relation to any sum due to any Agent or any Lender hereunder, such judgment is given in a currency (the "Judgment Currency") other than that in which such sum was originally denominated (the "Original Currency"), the Borrowers agree to indemnify such Agent or Lender, as the case may be, to the extent that the amount of the Original Currency which could have been purchased thereby in accordance with normal banking procedures on the Business Day following receipt of such sum is less than the sum which could have been so purchased thereby had such purchase been made on the day on which such judgment was given or, if such day is not a Business Day, on the Business Day immediately preceding the giving of such 111 118 judgment, and if the amount so purchased exceeds the amount which could have been so purchased thereby had such purchase been made on the day on which such judgment was given or, if such day is not a Business Day, on the Business Day immediately preceding such judgment, such Agent or Lender agrees to remit such excess to the Borrowers. The agreements in this Section 11.06 shall survive payment of any such judgment. 11.07 Funding and Payment of Participations; Conversion to US Dollars. (a) At any time after the occurrence and during the continuance of an Event of Default, the Applicable Lenders having Applicable Fronting Commitments aggregating more than 50% of the Applicable Total Facility Commitment with respect to any specific Facility (the "Required Fronting Lenders") may, by written notice to the Applicable Facility Agent (with a copy to the Company and the Global Agent) not later than 11:00 A.M. (local time of the Principal Office of the Applicable Facility Agent) on the second Business Day preceding the proposed date of funding and payment by each Lender of all Participations purchased in such Facility as provided in Article II, Article III, Article IV, or Article V hereof (the "Facility Participation Payment Date"), request each Lender to fund and pay for its Participation in such Facility and deliver to the Applicable Facility Agent on the Facility Participation Payment Date an aggregate amount of the Applicable Currency equal to such Participation (or the British Pounds Sterling Equivalent Amount or Australian Dollar Equivalent Amount of such Participation, as applicable). At the option of such Required Fronting Lenders, and as set forth in such notice, (i) all outstanding Loans under such Facility immediately shall be converted into Loans denominated in US Dollars in an aggregate principal amount equal to the US Dollar Equivalent Amount of the aggregate principal amount of such Loans based on the Spot Rate of Exchange on such Facility Participation Payment Date, and (ii) each such Participation shall be funded in an aggregate amount of US Dollars equal to the US Dollar Equivalent Amount of such Participation. The Applicable Facility Agent will promptly provide written notice of any such request to the other Facility Agents, who shall promptly provide notice thereof to the Lenders in their respective Facilities. (b) On the applicable Facility Participation Payment Date, each Participant in the specific Facility shall deliver the amount of such Participant's Facility Participation Amount with respect to such Facility in the Applicable Currency and in Same Day Funds to the Applicable Facility Agent; provided, however, that no Participant shall be responsible for any default by any other Participant in such other Participant's obligation to pay such amount. Upon receipt of any such amounts from the Participants, the Applicable Facility Agent shall distribute such amounts in Same Day Funds to the Applicable Lenders in such amounts such that, after such distribution, each Applicable Lender and each Participant in such Facility has a Facility Credit Exposure under such Facility, expressed as a percentage of the Aggregate Facility Credit Exposure under such Facility, equal to its Applicable Commitment Percentage. In order to evidence further such Participation (and without prejudice to the effectiveness of the Participation provisions set forth above), each Participant agrees to enter into a separate participation agreement at the request of any Applicable Lender in such Facility in form and substance reasonably satisfactory to such Lender. 112 119 (c) In the event that any Participant fails to make available to the Applicable Facility Agent the amount of its Participation as provided herein, the Applicable Facility Agent shall be entitled to recover such amount on behalf of the Applicable Lenders on demand from such Participant together with interest at the customary rate set by such Applicable Facility Agent for the correction of errors among banks for three (3) Business Days and thereafter at a rate per annum equal to the Applicable Base Rate with respect to such Facility (or, with respect to the UK Facility, the Default Rate). A certificate of the Applicable Facility Agent submitted to any Lender with respect to amounts owing hereunder shall be conclusive in the absence of manifest error. (d) In the event that any Applicable Lender in a specific Facility receives a payment in respect of any Loan made under such Facility, whether directly from the Applicable Borrower or Borrowers or otherwise, in which Participants have purchased Participations, such Applicable Lender shall promptly distribute to the Applicable Facility Agent, for distribution to each such Participant that has paid all such amounts payable by it hereunder with respect to any Loan made under such Facility by such Applicable Lender, such Participant's Applicable Commitment Percentage of such payment. Any payment to any Participant pursuant to the preceding sentence shall be made in US Dollars or Applicable Currency (whichever currency was delivered for payment of such Participation) in Same Day Funds by such Applicable Facility Agent. If any payment received by any Applicable Lender in a specific Facility pursuant to the immediately preceding sentence with respect to any Loan made under such Facility by it shall be required to be returned by such Applicable Lender after such time as such Applicable Lender has distributed such payment to the Applicable Facility Agent, each Participant that has received a portion of such payment shall pay to such Applicable Lender an amount equal to its Applicable Commitment Percentage of such amount to be returned; provided, however, that no Participant shall be responsible for any default by any other Participant in that other Participant's obligation to pay such amount. (e) Anything contained herein to the contrary notwithstanding, each Participant's obligation to pay for its purchase of Participations pursuant to subsection (a) shall be absolute, irrevocable and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which such Lender or Participant may have against any Applicable Lender, the Applicable Facility Agent, any Borrower or any other Person for any reason whatsoever; (ii) the occurrence or continuance of an Event of Default or a Default; (iii) any adverse change in the condition (financial or otherwise) of any Borrower; (iv) any breach of this Agreement or any other Loan Document by any Borrower, the Guarantor or any other Lender; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. (f) Anything contained in this Agreement to the contrary notwithstanding, no amendment, modification, termination or waiver of any provision of this Agreement or of the other Loan Documents, and no consent to any departure by any Borrower therefrom, shall (i) modify, terminate or waive any provision of this Section 11.07 in any manner adverse to any Lender without the written concurrence of such Lender, or (ii) modify, terminate or waive any provision of this Section 11.07 in any manner adverse to any Participant without the written concurrence of such Participant. 113 120 (g) In no event shall (i) the Participation of any Participant in any Loans pursuant to this Section 11.07 be construed as a loan or other extension of credit by such Participant to any Borrower, any Lender or any Facility Agent, (ii) this Agreement be construed to require any Participant to make any Loans or to otherwise extend any credit to any Borrower, any Lender or any Agent under this Agreement or under the other Loan Documents, or (iii) this Agreement be construed to require any Participant to fund or pay any amount in respect of its Participation in any Loan except as set forth herein. 114 121 ARTICLE XII The Agents 12.01 Appointment, Powers, and Immunities. Each Lender hereby irrevocably appoints and authorizes Bank of America to act as the Global Agent, National City Bank to act as the US Facility Agent, Bank of America International Limited to act as the UK Facility Agent, Bank One Canada to act as the Canadian Facility Agent, and Bank One, NA, Australia Branch to act as the Australian Facility Agent under this Agreement and the other Loan Documents with such powers and discretion as are specifically delegated to the Global Agent and the Applicable Facility Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. Each Agent (which terms as used in this Article hereof shall include its affiliates and its own and its affiliates' officers, directors, employees, and agents): (a) shall not have any duties or responsibilities except those expressly set forth in this Agreement and shall not be a trustee or fiduciary for any Lender; (b) shall not be responsible to the Lenders for any recital, statement, representation, or warranty (whether written or oral) made in or in connection with any Loan Document or any certificate or other document referred to or provided for in, or received by any of them under, any Loan Document, or for the value, validity, effectiveness, genuineness, enforceability, or sufficiency of any Loan Document, or any other document referred to or provided for therein or for any failure by any Borrower or any other Person to perform any of its obligations thereunder; (c) shall not be responsible for or have any duty to ascertain, inquire into, or verify the performance or observance of any covenants or agreements by any Borrower or the satisfaction of any condition or to inspect the property (including the books and records) of any Borrower or any of its Subsidiaries or affiliates; (d) shall not be required to initiate or conduct any litigation or collection proceedings under any Loan Document; and (e) shall not be responsible for any action taken or omitted to be taken by it under or in connection with any Loan Document, except for its own gross negligence or willful misconduct. Each Agent may employ agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. Each of the Global Co-Syndication Agents, in and only in its capacity as a Global Co-Syndication Agent, shall have no duties under this Article XII. 12.02 Reliance by Agents. Each Agent shall be entitled to rely upon any certification, notice, instrument, writing, or other communication (including, without limitation, any thereof by telephone or telefacsimile) believed by it to be genuine and correct and to have been signed, sent or made by or on behalf of the proper Person or Persons, and upon advice and statements of 115 122 legal counsel (including counsel for any Borrower), independent accountants, and other experts selected by such Agent. As to any matters not expressly provided for by this Agreement, none of the Agents shall be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders with respect to the Total Facilities, in the case of the Global Agent, or the Required Lenders with respect to a specific Facility or with respect to the Total Facilities, as the context may require, in the case of any Agent, and such instructions shall be binding on all of the Applicable Lenders; provided, however, no Agent shall be required to take any action that exposes it to personal liability or that is contrary to any Loan Document or applicable law or unless it shall first be indemnified to its satisfaction by the Applicable Lenders against any and all liability and expense which may be incurred by it by reason of taking any such action. 12.03 Defaults. No Agent shall be deemed to have knowledge or notice of the occurrence of a Default or Event of Default unless it has received written notice from another Agent or a Lender or a Borrower specifying such Default or Event of Default and stating that such notice is a "Notice of Default"; provided, that each Lender shall use its best reasonable efforts to deliver such notice to its Applicable Facility Agent upon its knowledge of any Default or Event of Default; provided further, that the failure to deliver such notice shall not result in any liability to any other Lender or Agent. In the event that any Facility Agent receives such a notice of the occurrence of a Default or Event of Default, such Facility Agent shall give prompt notice thereof to the Applicable Lenders in its specific Facility and the other Agents, including the Global Agent. In the event that the Global Agent receives such a notice of the occurrence of a Default or Event of Default, the Global Agent shall give prompt notice thereof to all Facility Agents. The Global Agent shall (subject to Section 12.02 hereof) take such action with respect to such Default or Event of Default as shall reasonably be directed by the Required Lenders with respect to the Total Facilities, provided that, unless and until the Global Agent shall have received such directions, the Global Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interest of the Lenders. 12.04 Rights as Lender. With respect to its Applicable Facility Commitments and the Loans made by it, each of Bank of America (and any successor acting as Global Agent), National City Bank (and any successor acting as US Facility Agent), BAIL (and any successor acting as UK Facility Agent), Bank One Canada (and any successor acting as Canadian Facility Agent) and Bank One, NA, Australia Branch (or any successor acting as Australian Facility Agent) in its capacity as a Lender hereunder, if such Agent is a Lender hereunder, shall have the same rights and powers as a Lender hereunder as any other Lender and may exercise the same as though it were not acting as the Global Agent, US Facility Agent, UK Facility Agent, Canadian Facility Agent or Australian Facility Agent, as applicable, and the term "Lender" or "Lenders" shall, unless the context otherwise indicates, include each of the Agents in its individual capacity, if such Agent is a Lender hereunder. Each of Bank of America (and any successor acting as Global Agent), National City Bank (and any successor acting as US Facility Agent), BAIL (and any successor acting as UK Facility Agent), Bank One Canada (and any successor acting as Canadian Facility Agent) and Bank One, NA, Australia Branch (or any successor acting as Australian Facility Agent) and their respective affiliates may (without having to account therefor 116 123 to any Lender) accept deposits from, lend money to, make investments in, provide services to, and generally engage in any kind of lending, trust, or other business with any Borrower or any of its Subsidiaries or affiliates as if it were not acting as Global Agent, US Facility Agent, UK Facility Agent, Canadian Facility Agent or Australian Facility Agent, as applicable, and each of Bank of America (and any successor acting as Global Agent), National City Bank (and any successor acting as US Facility Agent), BAIL (and any successor acting as UK Facility Agent), Bank One Canada (and any successor acting as Canadian Facility Agent) and Bank One, NA, Australia Branch (and any successor acting as Australian Facility Agent) and their respective affiliates may accept fees and other consideration from any Borrower or any of its Subsidiaries or affiliates for services in connection with this Agreement or otherwise without having to account for the same to the Lenders. 12.05 Indemnification. The Lenders agree to indemnify the Agents (to the extent not reimbursed under Section 13.10 hereof, but without limiting the obligations of the Borrowers under such Section), for its or their ratable share (based on their Applicable Commitment Percentages) of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including attorneys' fees), or disbursements of any kind and nature whatsoever that may be imposed on, incurred by or asserted against any of the Agents (including by any Lender) in any way relating to or arising out of any Loan Document or the transactions contemplated thereby or any action taken or omitted by any of the Agents under any Loan Document; provided that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the Person to be indemnified. Without limitation of the foregoing, each Lender agrees to reimburse the Agents promptly upon demand for its or their ratable share (based on their Applicable Commitment Percentages) of any costs or expenses payable by the Borrowers under Section 13.06, to the extent that the Agents are not promptly reimbursed for such costs and expenses by the Borrowers. The agreements contained in this Section shall survive payment in full of the Obligations, termination of each Commitment and the occurrence of the Total Facility Repayment Date. 12.06 Non-Reliance on Agents and Other Lenders. Each Lender agrees that it has, independently and without reliance on any of the Agents or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Borrowers and their Subsidiaries and decision to enter into this Agreement and that it will, independently and without reliance upon any of the Agents or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under the Loan Documents. Except for notices, reports, and other documents and information expressly required to be furnished to the Lenders by the Agents hereunder, the Agents shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition, or business of any Borrower or any of its Subsidiaries or affiliates that may come into the possession of any of the Agents or any of its affiliates. 12.07 Resignation of an Agent. Any of the Agents may resign at any time by giving notice thereof (a) with respect to the resignation of the Global Agent, to the Lenders, the Borrowers and the Facility Agents, and (b) with respect to the resignation of any Applicable Facility Agent, to the Applicable Lenders, the Applicable Borrowers, the Company and the 117 124 Global Agent. Upon any such resignation of the Global Agent, the Required Lenders with respect to the Total Facilities shall have the right to appoint a successor Global Agent, which shall be a Lender under or a Lender Affiliate with respect to the Total Facilities at such time and which, so long as no Default or Event of Default exists, shall be acceptable to the Company, which acceptance shall not be unreasonably withheld or delayed. Upon any such resignation of an Applicable Facility Agent, the Required Lenders with respect to the specific Facility shall have the right to appoint a successor Facility Agent for such Facility, which shall be a Lender under or a Lender Affiliate with respect to such Facility at such time and which, so long as no Default or Event of Default exists, shall be acceptable to the Company, which acceptance shall not be unreasonably withheld or delayed. If no successor Global Agent or Applicable Facility Agent shall have been so appointed and shall have accepted such appointment within thirty (30) days after the retiring Global Agent or Applicable Facility Agent's giving of notice of resignation, then the resignation of the retiring Global Agent or Applicable Facility Agent as the case may be, shall nonetheless thereupon be effective and the Facility Agents, in the case of the Global Agent's resignation, or the Applicable Facility Lenders, in the case of an Applicable Facility Agent's resignation, shall perform all the obligations of the retiring Agent hereunder until such time, if any, as the Required Lenders shall appoint a successor Agent as provided for above. Upon the acceptance of any appointment as Global Agent or Applicable Facility Agent hereunder by a successor, such successor shall thereupon succeed to and become vested with all the rights, powers, discretion, privileges, and duties of the retiring Global Agent or Applicable Facility Agent, and the retiring Global Agent or Applicable Facility Agent shall be discharged from its duties and obligations hereunder. After any retiring Global Agent or Applicable Facility Agent's resignation hereunder as Global Agent or Applicable Facility Agent, the provisions of this Article XII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Global Agent or Applicable Facility Agent. 12.08 Fees. The Borrowers agree to pay to each of the Agents, for its individual account, an annual fee as from time to time agreed to by the Borrowers and the Global Agent or Applicable Facility Agent, as applicable, in writing. 118 125 ARTICLE XIII Miscellaneous 13.01 Assignments and Participations. (a) Each Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Loans, its Notes, its Applicable Facility Commitments, its Applicable Fronting Commitments and its Participations); provided, however, that (i) each such assignment shall be to an Eligible Assignee; (ii) except in the case of an assignment to another Lender or an assignment of all of a Lender's rights and obligations in the US Facility, UK Facility, Canadian Facility or Australian Facility, respectively, under this Agreement, any such partial assignment shall be in an amount at least equal to US $5,000,000 of such Lender's US Facility Commitment, Pound 3,000,000 of such Lender's UK Facility Commitment (if any), CAN $7,000,000 of such Lender's Canadian Facility Commitment (if any) and AUS $5,000,000 of such Lender's Australian Facility Commitment (if any); (iii) each such assignment by a Lender shall be of a constant, and not varying, percentage of all of its rights and obligations (including Loans, Applicable Facility Commitments, Applicable Fronting Commitments and Participations) under this Agreement with respect to each Facility; (iv) the parties to such assignment shall execute and deliver to each Applicable Facility Agent and the Global Agent for their acceptance an Assignment and Acceptance in the form of Exhibit B hereto, together with any Note subject to such assignment and a processing fee of US $5,000 payable pro rata to the Global Agent and each Applicable Facility Agent; (v) each assignee must be a US Facility Lender and a Lender under at least one (1) additional Facility after giving effect to any assignment hereunder; and (vi) such assignee shall have an office located in the United States. Upon execution, delivery, and acceptance of such Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of such assignment, have the obligations, rights, and benefits of a Lender hereunder and the assigning Lender shall, to the extent of such assignment, relinquish its rights and be released from its obligations under this Agreement. Upon the consummation of any assignment pursuant to this Section, the assignor, the Applicable Facility Agent and the Applicable Borrowers shall make appropriate arrangements so that, if required, new Notes are issued to the assignor and the assignee. If the assignee is not incorporated under the laws of the appropriate jurisdiction for the Applicable Facilities, it shall deliver to the Borrowers and the 119 126 Applicable Facility Agent certification as to exemption from deduction or withholding of Taxes in accordance with Section 6.06. (b) Each Applicable Facility Agent shall maintain at its address referred to in Section 13.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Applicable Lenders and each Applicable Facility Commitment of, and principal amount of the Outstandings owing to, each such Applicable Lender from time to time (the "Register"). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Applicable Borrowers, the Global Agent, the Applicable Facility Agent and the Applicable Lender may treat each Person whose name is recorded in the Register as a Lender hereunder under the Applicable Facility for all purposes of this Agreement. The Register shall be available for inspection by any Applicable Borrower or any Applicable Lender at any reasonable time and from time to time upon reasonable prior notice. (c) Upon its receipt of an Assignment and Acceptance executed by the parties thereto, together with any Note subject to such assignment and payment of the processing fee, the Global Agent and the Applicable Facility Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit B hereto, accept such Assignment and Acceptance and record the information contained therein in the Register, and the Applicable Facility Agent shall thereafter give prompt notice thereof to the parties thereto. (d) Each Lender may sell participations to one or more Persons in all or a portion of its rights and obligations under this Agreement (including all or a portion of its Applicable Facility Commitments, Applicable Fronting Commitments, Participations and Outstandings owing thereto); provided, however, that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the participant shall be entitled to the benefit of the yield protection provisions contained in Article VI and the right of set-off contained in Section 13.03, (iv) the Applicable Borrowers and Applicable Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement, and (v) such Lender shall retain the sole right to enforce the obligations of the Applicable Borrowers relating to its Loans and its Notes and its Participations and to approve any amendment, modification, or waiver of any provision of this Agreement (other than amendments, modifications, or waivers decreasing or reducing the amount of principal of or the rate at which interest is payable or the amount of fees payable on such Loans or Notes, extending any scheduled principal payment date or date fixed for the payment of interest on such Loans or Notes, releasing the Guarantor or any Borrower or providing for any assignment of their Obligations, or extending any Applicable Facility Commitment of such Lender), each of which may, if so agreed in writing, require the prior consent of any such participant in such Lender's Commitments and Participations and Outstandings owing thereto before such Lender approves any such amendment, modification or waiver. (e) Notwithstanding any other provision set forth in this Agreement, any Lender may at any time assign and pledge all or any portion of its Loans, its Notes, its Obligations and its interest under the Loan Documents to any Federal Reserve Bank as collateral security pursuant 120 127 to Regulation A and any Operating Circular issued by such Federal Reserve Bank. No such assignment shall release the assigning Lender from its obligations hereunder. (f) Any Lender may furnish any information concerning any Borrower or any of its Subsidiaries in the possession of such Lender from time to time to assignees and participants (including prospective assignees and participants) evaluating the assignment or participation and subject to the prior execution by such party of the form of confidentiality agreement required by the Company as of the Closing Date of all Lenders. (g) In the event that any Lender fails to maintain an Investment Grade Rating (a "Non-Rated Lender"), such Lender shall be replaced as soon as practicable by, and assign all its Loans, Applicable Facility Commitments, Applicable Fronting Commitments, Participations and other Obligations owing thereto pursuant to Section 13.01 to, a financial institution selected by the Company and willing to become a Lender for all purposes hereunder which is an Eligible Assignee. Such Non-Rated Lender agrees to execute and deliver to the Global Agent and to the Applicable Facility Agent of each Facility in which such Non-Rated Lender has made or was obligated to make Loans an Assignment and Acceptance with such replacement Lender upon payment at par by such replacement lender of all principal, interest, fees and other amounts owing under this Agreement to such Non-Rated Lender. The Non-Rated Lender shall pay to the Applicable Facility Agent the processing fee required by Section 13.01(a)(iv) in connection with such assignment. Upon acceptance of the Assignment and Acceptance and satisfaction of all other conditions in Section 13.01(a), (b), (c), such replacement lender shall become a Lender hereunder. (h) No Borrower may assign any rights, powers, duties or obligations under this Agreement or the other Loan Documents without the prior written consent of all the Lenders. 13.02 Notices. Any notice shall be presumed to have been received by any party hereto and be effective (i) on the day on which delivered (including hand delivery by commercial courier service) to such party (against receipt therefor), (ii) on the date of receipt at such address or telefacsimile number as may from time to time be specified by such party in written notice to the other parties hereto, or (iii) on the fifth Business Day after the date on which mailed, if sent prepaid by certified or registered mail, return receipt requested, in each case delivered, transmitted or mailed, as the case may be, to the address or telefacsimile number, as appropriate, set forth below or such other address or number as such party shall specify by notice thereunder: (a) if to any Borrower: c/o American Greetings Corporation One American Road Cleveland, Ohio 44144 Attention: Manager of Treasury Operations Telefacsimile: (216) 252-6791 Telephone: (216) 252-7300 121 128 with a copy to: American Greetings Corporation One American Road Cleveland, Ohio 44144 Attention: General Counsel Telefacsimile: (216) 252-6741 Telephone: (216) 252-7300 (b) if to the Authorized Representative: At the address set forth for receipt of notices in the notice of appointment thereof. (c) if to the Global Agent: Bank of America, N.A. 1455 Market Street, 12th Floor San Francisco, California 94103 Attention: Gary Flieger, Agency Services Telefacsimile: (415) 436-3484 Telephone: (415) 436-3425 with a copy to: Bank of America, N.A. 231 South LaSalle Street Chicago, Illinois 60697 Attention: Gretchen Spoo Telefacsimile: (312) 987-0303 Telephone: (312) 828-6654 (d) if to the Agents: At the addresses set forth on the signature pages hereof. (e) if to the Lenders: At the addresses set forth on the signature pages hereof and on the signature page of each Assignment and Acceptance. 122 129 13.03 Right of Set-off; Adjustments. (a) Upon the occurrence and during the continuance of any Event of Default, each Lender (and each of its affiliates) is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender (or any of its affiliates) to or for the credit or the account of any Applicable Borrower against any and all of the Obligations of such Borrower now or hereafter existing under this Agreement, any other Loan Document and the Note of such Borrower held by such Lender, irrespective of whether such Lender shall have made any demand under this Agreement, any other Loan Document or such Notes and although such Obligations may be unmatured. Each Lender agrees promptly to notify the Applicable Borrower, the Global Agent and the Applicable Facility Agent after any such set-off and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Lender under this Section 13.03(a) are in addition to other rights and remedies (including, without limitation, other rights of set-off) that such Lender may have. (b) Each Lender agrees that if it shall, through the exercise of a right of banker's lien, set-off, counterclaim or otherwise, obtain payment with respect to its Obligations (other than pursuant to Article VI) which results in its receiving more than its pro rata share of the aggregate payments with respect to all of the Obligations in a specific Facility, or with respect to all of the Obligations in the Total Facilities, after acceleration thereof pursuant to Section 11.01(A) (other than any payment expressly provided hereunder to be distributed on other than a pro rata basis and payments pursuant to Article VI), then (i) such Lender shall be deemed to have simultaneously purchased from the other Applicable Lenders or all Lenders, as the case may be, a share in their Obligations so that the amount of the Obligations held by each of the Applicable Lenders or all Lenders, as the case may be, shall be pro rata and (ii) such other adjustments shall be made from time to time as shall be equitable to ensure that the Lenders share such payments ratably; provided, however, that for purposes of this Section 13.03(b) the terms "pro rata" and "ratably" shall be determined with respect to the Applicable Commitment Percentage of each Lender after subtraction of amounts, if any, by which any such Lender has not funded its share of the outstanding Loans. If all or any portion of any such excess payment is thereafter recovered from the Lender which received the same, the purchase provided in this Section 13.03 (b) shall be rescinded to the extent of such recovery, without interest. The Borrowers expressly consent to the foregoing arrangements and agree that each Lender so purchasing a portion of the other Lenders' Obligations may exercise all rights of payment (including, without limitation, all rights of set-off, banker's lien or counterclaim) with respect to such portion as fully as if such Lender were the direct holder of such portion. 13.04 Survival. All covenants, agreements, representations and warranties made herein shall survive the making by the Lenders of the Loans and the execution and delivery to the Lenders of this Agreement and the Notes and shall continue in full force and effect so long as any Obligations remain outstanding or any Lender has any commitment hereunder or any Borrower has continuing obligations hereunder unless otherwise provided herein. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and permitted assigns of such party and all covenants, provisions and agreements 123 130 by or on behalf of the Borrowers which are contained in the Loan Documents shall inure to the benefit of the successors and permitted assigns of the Lenders or any of them. 13.05 Expenses. Each Borrower jointly and severally agrees to pay on demand all reasonable costs and expenses of the Global Agent, the Canadian Facility Agent and the Australian Facility Agent in connection with the syndication, preparation, due diligence, execution, delivery, administration, modification, and amendment of this Agreement, the other Loan Documents, and the other documents to be delivered hereunder, including, without limitation, the reasonable fees and expenses of counsel (including the allocated cost of internal counsel) for the Global Agent and the allocated cost of internal counsel for the Canadian Facility Agent and the Australian Facility Agent with respect thereto and with respect to advising the Agents as to their rights and responsibilities under the Loan Documents. Each Borrower further agrees jointly and severally to pay on demand all costs and expenses of each Agent and each Lender, if any (including, without limitation, reasonable attorneys' fees and expenses), in connection with the enforcement or preservation of rights under this Agreement (whether through negotiations, legal proceedings, or otherwise), any other Loan Documents and any other documents to be delivered hereunder. The agreements contained in this Section shall survive payment in full of the Obligations, termination of each Commitment and the occurrence of the Total Facility Repayment Date. 13.06 Amendments and Waivers. Any provision of this Agreement or any other Loan Document may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrowers and the Required Lenders with respect to the Total Facilities, and, if Article XII or the rights or duties of the Global Agent or any Applicable Facility Agent are affected thereby, by the Global Agent and/or the Applicable Facility Agent, as applicable; provided that no such amendment or waiver shall, unless signed by all the Lenders, (i) increase the US Facility Commitment, UK Facility Commitment, Canadian Facility Commitment or Australian Facility Commitment, or the US Facility Fronting Commitment, UK Facility Fronting Commitment, Canadian Facility Fronting Commitment or Australian Facility Fronting Commitment, as applicable, of any Lender or increase the Total US Facility Commitment, the Total UK Facility Commitment, the Total Canadian Facility Commitment or the Total Australian Facility Commitment; (ii) reduce the principal of or rate of interest on any Loan or any fees or other amounts payable hereunder; (iii) postpone any date fixed for the payment of any scheduled installment of principal of or interest on any Loan or any fees or other amounts payable hereunder or the Total Facility Termination Date, the US Facility Revolving Credit Termination Date or the Canadian Facility Renewable Tranche Termination Date; (iv) change the percentage of the Applicable Facility Commitment or the Total Commitment, as applicable, or of the Aggregate Credit Exposure or the number of Lenders, which shall be required for the Lenders or any of them to take any action under this Section or any other provision of this Agreement; or (v) release or allow an assignment by any Borrower or the Guarantor; provided further, however, that the amendment or waiver of any of the following provisions of a specific Facility need only be signed by the Applicable Borrowers, the Applicable Facility Agent and the Required Lenders with respect to such Facility: (x) delivery of Borrowing Notices with respect to any Advance, Continuation or Conversion under the specific Facility, (y) delivery of notice for any reduction in the Applicable Total Facility Commitment, and (z) minimum or integral amounts of Advances or Loans under the specific Facility. 124 131 No notice to or demand on any Borrower in any case shall entitle such Borrower to any other or further notice or demand in similar or other circumstances, except as otherwise expressly provided herein. No delay or omission on any Lender's or any Agent's part in exercising any right, remedy or option shall operate as a waiver of such or any other right, remedy or option or of any Default or Event of Default. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law. 13.07 Counterparts . This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such fully-executed counterpart. 13.08 Termination. The termination of this Agreement shall not affect any rights of the Borrowers, the Lenders or the Agents or any obligation of any Borrower, the Lenders or any of the Agents, arising prior to the effective date of such termination, and the provisions hereof shall continue to be fully operative until all transactions entered into or rights created or obligations incurred prior to such termination have been fully disposed of, concluded or liquidated and the Obligations arising prior to or after such termination have been irrevocably paid in full. The rights granted to the Agents for the benefit of the Lenders hereunder and under the other Loan Documents shall continue in full force and effect, notwithstanding the termination of this Agreement, until termination of each Commitment and all of the Obligations have been paid in full after the termination hereof (other than Obligations in the nature of continuing indemnities or expense reimbursement obligations not yet due and payable, which shall continue) or the Borrowers have furnished the Lenders and the Agents with an indemnification satisfactory to the Agents and each Lender with respect thereto. All representations, warranties, covenants, waivers and agreements contained herein shall survive termination hereof until payment in full of the Obligations unless otherwise provided herein. Notwithstanding the foregoing, if after receipt of any payment of all or any part of the Obligations, any Lender is for any reason compelled to surrender such payment to any Person because such payment is determined to be void or voidable as a preference, impermissible setoff, a diversion of trust funds or for any other reason, this Agreement shall continue in full force and the Borrowers shall be liable to, and shall indemnify and hold the Agents and such Lender harmless for, the amount of such payment surrendered until the Agents and such Lender shall have been finally and irrevocably paid in full. The provisions of the foregoing sentence shall be and remain effective notwithstanding any contrary action which may have been taken by the Lenders in reliance upon such payment, and any such contrary action so taken shall be without prejudice to the Lenders' rights under this Agreement and shall be deemed to have been conditioned upon such payment having become final and irrevocable. 13.09 Usury Savings Clause. Notwithstanding any other provision herein, the aggregate interest rate charged with respect to any of the Obligations, including all charges or fees in connection therewith deemed in the nature of interest under applicable law shall not exceed the Highest Lawful Rate (as such term is defined below). If the rate of interest (determined without regard to the preceding sentence) under this Agreement at any time exceeds the Highest Lawful Rate; the outstanding amount of the Loans made hereunder shall bear interest at the Highest 125 132 Lawful Rate until the total amount of interest due hereunder equals the amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect. In addition, if when the Loans made hereunder are repaid in full the total interest due hereunder (taking into account the increase provided for above) is less than the total amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect, then to the extent permitted by law, the Applicable Borrowers shall pay to the Applicable Facility Agent an amount equal to the difference between the amount of interest paid and the amount of interest which would have been paid if the Highest Lawful Rate had at all times been in effect. Notwithstanding the foregoing, it is the intention of the Lenders and the Borrowers to confirm strictly to any applicable usury laws. Accordingly, if any Lender contracts for, charges, or received any consideration which constitutes interest in excess of the Highest Lawful Rate, then any such excess shall be cancelled automatically and, if previously paid, shall at such Lender's option be applied to the outstanding amount of the Loans made hereunder or be refunded to the Applicable Borrowers. As used in this paragraph, the term "Highest Lawful Rate" means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted for, charged, or received under the laws applicable to such Lender which are presently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than applicable laws now allow. 13.10 Indemnification; Limitation of Liability. (a) The Company and each Borrower jointly and severally agrees to indemnify absolutely and unconditionally and hold harmless each Agent and each Lender and each of their affiliates and their respective officers, directors, employees, agents, and advisors (each, an "Indemnified Party") from and against any and all claims, damages, losses, liabilities, costs, and expenses, including, without limitation, all claims, damages, losses, liabilities, costs and expenses described in Section 6.09 (the foregoing also to include, without limitation, reasonable attorneys' fees (including the allocated cost of internal counsel), settlement costs and disbursements) ("Indemnified Liabilities") that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation, or proceeding or preparation of defense in connection therewith) the Loan Documents, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Loans, except to the extent such Indemnified Liability is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence or willful misconduct. If and to the extent the foregoing may be unenforceable for any reason, the Company and each Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each Indemnified Liability which is permissible under applicable law. In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 13.10 applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Company, any Borrower, its directors, shareholders or creditors or an Indemnified Party or any other Person or any Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated. 126 133 (b) Without limiting the generality of Section 13.10(a) above, the Company and the Borrowers hereby jointly and severally agree to defend, indemnify and hold each Indemnified Party harmless from and against any and all Indemnified Liabilities (including, without limitation, assessment and cleanup costs and reasonable attorneys', consultants' and other experts' fees and disbursements, including those arising by reason of any of the aforesaid or an action against the Company or any Subsidiary under this indemnity) arising directly or indirectly from, out of or by reason of (a) the violation or alleged violation of any Environmental Law by the Company or any Subsidiary or with respect to any property owned, operated or leased by the Company or any Subsidiary or (b) the use, generation, handling, storage, transportation, treatment, emission, release, disclaim or disposal of any Hazardous Material by or in respect of the Company or any Subsidiary or on or with respect to property owned or leased or operated by the Company or any Subsidiary. (c) The Company and each Borrower agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to it, any of its Subsidiaries or Affiliates or any security holders or creditors thereof arising out of, related to or in connection with the transactions contemplated herein, except to the extent that such liability is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence or willful misconduct; provided, however, the Company and each Borrower agrees not to assert any claim against any of the Agents, any Lender, any of their affiliates, or any of their respective directors, officers, employees, attorneys, agents, and advisers, on any theory of liability, for special, indirect, consequential, or punitive damages arising out of or otherwise relating to the Loan Documents, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Loans. (d) Without prejudice to the survival of any other agreement of any Borrower hereunder, the agreements and obligations of the Company and each Borrower contained in this Section 13.10 shall survive the payment in full of the Obligations, termination of each Commitment and the occurrence of the Total Facility Repayment Date. 13.11 Agreement Controls. In the event that any term of any of the Loan Documents other than this Agreement conflicts with any express term of this Agreement, the terms and provisions of this Agreement shall control to the extent of such conflict. 13.12 Severability. If any provision of this Agreement or the other Loan Documents shall be determined to be illegal or invalid as to one or more parties hereto, then such provision shall remain in effect with respect to all parties, if any, as to whom such provision is neither illegal nor invalid, and in any event all other provisions hereof shall remain effective and binding on the parties hereto. 13.13 Entire Agreement. This Agreement, together with the other Loan Documents, constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all previous proposal, negotiations, representations and other communications between or among the parties, both oral and written, with respect thereto. 127 134 13.14 Governing Law; Waiver of Jury Trial. (A) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN THOSE LOAN DOCUMENTS WHICH EXPRESSLY PROVIDE THAT THEY SHALL BE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE. (B) EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH BORROWER EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY, ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH BORROWER HEREBY IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING. (C) EACH BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF SUCH BORROWER PROVIDED IN SECTION 13.02, OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK. (D) NOTHING CONTAINED IN SUBSECTION (A) OR (B) HEREOF SHALL PRECLUDE ANY AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE COURTS OF ANY JURISDICTION WHERE ANY BORROWER OR ANY BORROWER'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER 128 135 COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE UNDER APPLICABLE LAW. (E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH BORROWER, EACH AGENT AND THE LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY IRREVOCABLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING. Section 13.15 Special Funding Option. (a) Notwithstanding anything to the contrary contained herein, any Lender (for the purposes of this Section 13.15, a "Granting Lender") may grant to a special purpose funding vehicle (for the purposes of this Section 13.15, an "SPC") the option to make, on behalf of such Granting Lender, all or a portion of the Advances which such Granting Lender is obligated to make (a "Funding Obligation") under the applicable Facility, such option to be exercisable in the sole discretion of the SPC; provided, however, that (i) such Granting Lender's obligations under this Agreement and the Loan Documents shall remain unchanged, including without limitation the indemnification obligations of the Granting Lender pursuant to Section 12.05 hereof; (ii) such Granting Lender shall remain solely responsible to the other parties hereto for the performance of all Funding Obligations; (iii) the Applicable Borrowers and the Applicable Lenders shall continue to deal solely and directly with such Granting Lender in connection with such Granting Lender's rights and obligations under this Agreement; the Applicable Facility Agent shall continue to deal directly with the Granting Lender as agent for the SPC with respect to distribution of payment of principal, interest and fees, notices of Conversion and Continuation and all other matters; (iv) such Granting Lender shall retain the sole right to enforce the obligations of the Applicable Borrowers relating to its Loans and its Notes and its Participations and to approve any amendment, modification, or waiver of any provision of this Agreement, each of which may, if so agreed in writing between the Granting Lender and the SPC, require the prior consent of any such SPC which has exercised the option to undertake the Funding Obligation in connection with such Granting Lender's Commitments and Participations and Obligations owing thereto before the Granting Lender approves any such amendment, modification or waiver; 129 136 (v) the granting of such option shall not constitute an assignment to or participation of such SPC of or in the Granting Lender's Commitments and Participations and Obligations owing thereto; (vi) such SPC shall not become a Lender hereunder as a result of the granting of such option; (vii) such SPC shall not become obligated or committed to make Advances as a result of the granting of such option; (viii) if such SPC elects not to exercise such option or otherwise fails to make all or any part of an Advance, the Granting Lender shall retain its Funding Obligation and be obligated to make the entire Advance or any portion of such Advance not made by such SPC; and (b) Advances made by an SPC hereunder shall be deemed to satisfy the Funding Obligation and utilize the Applicable Facility Commitment and Applicable Fronting Commitment of the Granting Lender as if, and to the same extent, such Advances were made by such Granting Lender. (c) Each party hereto agrees that no SPC shall be liable for any indemnity or payment under this Agreement for which a Granting Lender would otherwise be liable so long as, and to the extent that, the Granting Lender provides such indemnity or makes such payment. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of the United States of America or any State thereof. (d) Notwithstanding anything to the contrary contained in this Agreement, an SPC may (i) at any time and without paying any processing fee therefor, assign or participate all or a portion of its interests in any Loans as they may exist consistent with the terms of this Section 13.15 to its Granting Lender or to any financial institutions providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Loans, and (ii) disclose on a confidential basis any nonpublic information relating to Advances made by such SPC hereunder to any rating agency, commercial paper dealer or provider of any surety or guarantee to such SPC. (e) This Section 13.15 may not be amended without the prior written consent of the Granting Lender on behalf of which such SPC has made all or any part of its Advances which remain outstanding at the time of such amendment. [Signature pages follow.] 130 137 IN WITNESS WHEREOF, the parties hereto have caused this instrument to be made, executed and delivered by their duly authorized officers as of the day and year first above written. AMERICAN GREETINGS CORPORATION By: /s/ Dale A. Cable -------------------------------------------- Name: Dale A. Cable ------------------------------------------ Title: Vice President - Treasurer ----------------------------------------- CARLTON CARDS (FRANCE) S.N.C. By: /s/ Gerald M. Fryer -------------------------------------------- Name: Gerald M. Fryer ------------------------------------------ Title: Gerant ----------------------------------------- CARLTON CARDS LIMITED, a UK entity By: /s/ Morry Weiss -------------------------------------------- Name: Morry Weiss ------------------------------------------ Title: Executive Director ----------------------------------------- UK GREETINGS LIMITED By: /s/ Mary Ann Corrigan-Davis -------------------------------------------- Name: Mary Ann Corrigan-Davis ------------------------------------------ Title: Director ----------------------------------------- HANSON WHITE GROUP LIMITED By: /s/ Mary Ann Corrigan-Davis -------------------------------------------- Name: Mary Ann Corrigan-Davis ------------------------------------------ Title: Director ----------------------------------------- Signature Page 1 of 21 138 CAMDEN GRAPHICS LIMITED By: /s/ Mary Ann Corrigan-Davis -------------------------------------------- Name: Mary Ann Corrigan-Davis ------------------------------------------ Title: Director ----------------------------------------- CARLTON CARDS LIMITED, a Canadian Company By: /s/ Phyllis Alden -------------------------------------------- Name: Phyllis Alden ------------------------------------------ Title: Secretary ----------------------------------------- JOHN SANDS (AUSTRALIA) LTD. By: /s/ Mary Ann Corrigan-Davis -------------------------------------------- Name: Mary Ann Corrigan-Davis ------------------------------------------ Title: President ----------------------------------------- JOHN SANDS (N.Z.) LTD. By: /s/ Mary Ann Corrigan-Davis -------------------------------------------- Name: Mary Ann Corrigan-Davis ------------------------------------------ Title: President ----------------------------------------- JOHN SANDS HOLDING CORP. By: /s/ Mary Ann Corrigan-Davis -------------------------------------------- Name: Mary Ann Corrigan-Davis ------------------------------------------ Title: President ----------------------------------------- Signature Page 2 of 21 139 BANK OF AMERICA, N.A., as Global Agent By: /s/ Gary Flieger -------------------------------------------- Name: Gary Flieger Title: Vice President Wire Transfer Instructions: Bank of America, N.A. Dallas, Texas ABA # 111000012 Account No. 3750836479 Account Name: Credit Services Ref: American Greetings Address for Other Notices; Bank of America, N.A. 1455 Market Street, 12th Floor San Francisco, California 94103 Attention: Gary Flieger Telephone: (415) 436-3484 Telefacsimile: (415) 436-3425 Signature Page 3 of 21 140 BANK OF AMERICA, N.A., as US Facility Lender By: /s/ Gretchen A. Spoo -------------------------------------------- Name: Gretchen A. Spoo Title: Vice President Lending Office: Bank of America, N.A. Attention: Myrna Lara, Credit Services Representative 1850 Gateway Boulevard Concord, California 94520 Telephone: (925) 675-8391 Telefacsimile: (925) 969-2819 Wire Transfer Instructions: Bank of America, N.A. Dallas, Texas ABA # 111000012 Account No. 3750836479 Account Name: Credit Services Ref: American Greetings Address for Other Notices: Bank of America, N. A. Attention: Gretchen Spoo 231 South LaSalle Chicago, Illinois 60697 Telephone: (312) 828-6654 Telefacsimile: (312) 987-0303 Signature Page 4 of 21 141 BANK OF AMERICA INTERNATIONAL LIMITED, as U.K. Facility Agent By: /s/ Graham Radford -------------------------------------------- Name: Graham Radford Title: Assistant Vice President Lending Office: Bank of America International Limited Attention: Karen Hall/Loans Agency 1 Alie Street London E1 8DE England Telephone: 011 44 20 8313 2992 Telefacsimile: 011 44 20 8313 2149 Wire Transfer Instructions: With respect to US Dollars: Bank of America, N.A., New York Account Bank of America, N.A., London A/c no. 37/60564 For further credit to Bank of America International Limited, London A/c no. 10985218 With respect to British Pounds Sterling: Bank of America, N.A., London CHAPS Code 16-50-50 Account Bank of America International Limited, London A/c no. 10985010 With respect to French Francs: Bank of America, N.A., London Account Bank of America International Limited, London A/c no. 10985292 With respect to euro: Bank of America, N.A., London Account Bank of America International Limited, London A/c no. 10985292 Signature Page 5 of 21 142 BANK OF AMERICA, N.A., as UK Facility Lender By: /s/ Gretchen Spoo -------------------------------------------- Name: Gretchen Spoo Title: Vice President Lending Office: Patricia A. Chambers, Loan Service Bank of America, N.A. 26 Elmfield Road Bromley, BR1 1WA Tel: 011 44 20 8313 2613 Fax: 011 44 20 8313 2140 Wire Transfer Instructions: With respect to British Pounds Sterling: direct by CHAPS to: Bank of America, N.A., London Chaps Code: 16-50-50 Swift Address: BOFAGB22 With respect to French Francs: Bank of America, N.A., London Swift Address: BOFAGB22 With respect to euro: Bank of America, N.A., London Swift Address: BOFAGB22 Attn.: Loan Service Ref.: American Greetings Address for Other Notices: Geraldine Simmons, US Multinationals Bank of America, N.A., London Branch 1 Alie Street London, E1 8 DE Tel.: 011 44 20 7634 4261 Fax: 011 44 20 7634 4707 Signature Page 6 of 21 143 NATIONAL CITY BANK, as US Facility Agent, US Facility Lender and as UK Facility Lender By: /s/ Robert S. Coleman ---------------------------------------------- Name: Robert S. Coleman Title: Vice President and Senior Lending Officer Lending Office: National City Bank 1900 E. Ninth Street, #01-2077 Cleveland, Ohio 44114 Attention: Robert S. Coleman Telephone: (216) 575-9714 Telefacsimile: (216) 222-0003 E-mail: Robert.Coleman@National-City.com Wire Transfer Instructions: National City Bank Cleveland, Ohio ABA No.: 041000124 Account No.: 151804 Account Name: Commercial Loan Operations Attn: Vern Johnson Operations Contact: National City Bank 1900 E. Ninth Street, #01-2077 Cleveland, Ohio 44114 Attention: Revette Vickerstaff, Manager Telephone: (216) 488-7080 Telefacsimile: (216) 488-7110 Signature Page 7 of 21 144 BANK ONE, NA, AUSTRALIA BRANCH, as Australian Facility Agent and as Australian Facility Lender By: /s/ Gary C. Wilson -------------------------------------------- Name: Gary C. Wilson ------------------------------------------ Title: Senior Vice President ----------------------------------------- Lending Office: Bank One, NA, Australia Branch 90 Collins Street 19th FL STE-NMELB-1 Melbourne, Australia Credit Contact in Australia: Craig Jensen Vice President Telephone: (613) 9668 2302 Telefacsimile: (613) 9650 2721 Sharon Tai Credit Underwriter Telephone: (612) 9250 2130 Telefacsimile: (612) 9223 1823 Credit Contact in U.S.: Bank One, Michigan 611 Woodward MS# 8073 Detroit, MI 48226 Attn: Wes Sliwinski, Underwriter Telephone: (313) 225-1782 Telefacsimile: (313) 225-1671 E-mail: wieslaw_sliwinski@em.fcnbd.com Wire Transfer Instructions: Payment is to be made via RTGS Bank One, NA - Australia BSB 915 510 BIC Code: FNBCAU2X Ref: John Sands For Administrative Matters: Barry Chenoweth Loan Representative Phone: (618) 8228 2244 Fax: (618) 8223 2948 Signature Page 8 of 21 145 For Funding Transactions: Josh Whiting Dealer Trading Phone: 1-800-682-2244 or (618) 8223 2209 Fax: (618) 8223 2948 Signature Page 9 of 21 146 BA AUSTRALIA LIMITED, as Australian Facility Lender By: /s/ Tony Dowling -------------------------------------------- Name: Tony Dowling Title: Director By: /s/ Warren R. Whitley -------------------------------------------- Name: Warren R. Whitley Title: Company Secretary Lending Office: BA Australia Limited Level 63, MLC Centre 19-29 Martin Place Sydney, New South Wales 2000 Australia Attention: Evelyn Kirk Telephone: 612.9931.4237 Telefacsimile: 612.9221.1023 Wire Transfer Instructions: Payments in Australian Dollars ------------------------------ Bank of America, NA Sydney branch Account No.: 11191019 BSB No.: 232001 Deposits to be made through: any Commonwealth Bank of Australia Branch for further credit to Bank of America, NA Sydney Payments in New Zealand Dollars Account Name: Bank of America NA Sydney branch Bank: Bank of New Zealand, Wellington Account No.: 5201-30600 Signature Page 10 of 21 147 BANK OF AMERICA CANADA, as Canadian Facility Lender By: /s/ Michael Hurtubise -------------------------------------------- Name: Michael Hurtubise ------------------------------------------ Title: Principal ----------------------------------------- Lending Office: Bank of America Canada Toronto Corporate Services Office 5651 200 Front Street West, 27th Floor Toronto, Ontario M5V 312 Canada Attention: Medina Sales De Andrade/ Richard J. Hall Telephone: 416.349.5433/416.348.4008 Telefacsimile: 416.349.4283/416.349.4283 Wire Transfer Instructions: Wire payment of funds DIRECT through IIPS to: Bank of America Canada 200 Front Street West, Toronto, Ontario TRANSIT #: 241 SWIFT CODE: BOFACATT Reference: Carlton Cards Attention: Agency Administration Signature Page 11 of 21 148 BANK ONE, MICHIGAN, as US Facility Lender By: /s/ Gary C. Wilson -------------------------------------------- Name: Gary C. Wilson ------------------------------------------ Title: Senior Vice President ----------------------------------------- Lending Office: 611 Woodward Avenue Detroit, Michigan 48226 Credit Contact: Bank One, Michigan 611 Woodward Avenue MS # 8073 Detroit, Michigan 48226 Attention: Wes Sliwinski, Underwriter Telephone: (313) 225-1782 Telefacsimile: (313) 225-1671 E-mail: wieslaw_sliwinski@em.fcnbd.com Wire Transfer Instructions: Bank One, Michigan Detroit, MI ABA No.: 072000326 Reference: American Greetings Account No.: LS2 Clearing Account 2891000007 Operations Contact: Bank One, Michigan 611 Woodward Avenue MS # 8079 Detroit, Michigan 48226 Attention: Karen Graham, Loan Service Associate Telephone: (313) 225-2911 Telefacsimile: (313) 225-1586 Signature Page 12 of 21 149 BANK ONE CANADA, as Canadian Facility Agent and as Canadian Facility Lender By: /s/ Steven Voigt -------------------------------------------- Name: Steven Voigt ------------------------------------------ Title: First Vice President ----------------------------------------- Lending Office: Bank One Canada 161 Bay Street STE 4240 Toronto Ontario M5J 2S1 Canada Credit Contact in Canada: Steve Voigt First Vice President Telephone: (313) 225-4161 until August 2000, then (416) 365-5262 Telefacsimile: (313) 225-1689 until August 2000, then (416) 363-7574 Jeremiah Hynes Credit Officer Telephone: (416) 365-5260 Telefacsimile: (416) 363-7574 Credit Contact in U.S.: Bank One, Michigan 611 Woodward Avenue MS# 8073 Detroit, MI 48226 Attn: Wes Sliwinski, Underwriter Telephone: (313) 225-1782 Telefacsimile: (313) 225-1671 E-mail: wieslaw_sliwinski@em.fcnbd.com Wire Transfer Instructions: CAD Dollars: Royal Bank of Canada (swift-ROYCCAT2) Toronto, Ontario Account Number: 07172 000 047 1 Account: Bank One Canada Fav: (Name of Customer) USD Dollars: Bank One, Michigan (swift-NBDDUS33) Detroit, Michigan ABA Number: 072000326 Account: Bank One Canada Fav: (Name of Customer) Signature Page 13 of 21 150 For Administrative Matters: Lehong Zhang Operations Analyst Phone: (416) 365-8262 Fax: (416) 363-7574 Signature Page 14 of 21 151 BARCLAYS BANK PLC, as US Facility Lender and UK Facility Lender By: /s/ Marlene Wechselblatt -------------------------------------------- Name: Marlene Wechselblatt Title: Vice President Lending Office: Barclays Bank PLC 222 Broadway 8th Floor New York, New York 10038 Attn: Marlene Wechselblatt Telephone: (212) 412-7642 Telefacsimile: (212) 412-7590 E-mail: Marlene.Wechselblatt@Barcap.com Wire Transfer Instructions: Barclays Bank PLC New York, NY 10038 ABA # 026002574 Account No. 050019104 Account Name: CLAD CONTROL Attn: Christina Batiz As US Facility Lender, Operations Contact: Barclays Bank PLC 222 Broadway 11th Floor New York, New York 10038 Attn: Christina Batiz Telephone: (212) 412-3701 Telefacsimile: (212) 412-5306 E-mail: Christina.Batiz@Barcap.com Signature Page 15 of 21 152 As UK Facility Lender, Operations Contact: Barclays Bank PLC 5 North Colonnade Canary Warf London E144BB England Attn: Michael Kenny, Executive Telephone: 011 020 7773 6441 Telefacsimile: 011 020 7773 6807 E-mail: Michael.Kenny@Barclayscapital.com Signature Page 16 of 21 153 KEYBANK, NATIONAL ASSOCIATION , as US Facility Lender and UK Facility Lender By: /s/ Mark A. LoSchiavo -------------------------------------------- Name: Mark A. LoSchiavo Title: Portfolio Manager Lending Office: KeyBank National Association 127 Public Square Cleveland, Ohio 44114 Mail Code: OH-01-27-0606 Attention: Mark LoSchiavo Telephone: 216-689-0598 Telefacsimile: 216-689-4981 E-mail: mark_loschiavo@keybank.com Wire Transfer Instructions: KeyBank National Assn. Cleveland, OH ABA # 041001039 Account # 3057 Account Name: Commerical Loan Services RE: American Greetings Operations Contact: KeyBank National Association 127 Public Square Cleveland, Ohio 44114 Mail Code: OH-01-27-0606 Attention: Kathy Koenig, Loan Administrator Telephone: 216-689-4228 Telefacsimile: 216-689-4981 E-mail: kathy_a_koenig@keybank.com Signature Page 17 of 21 154 ROYAL BANK OF CANADA, as US Facility Lender, Canadian Facility lender and Australian Facility Lender By: /s/ Lori Ross -------------------------------------------- Name: Lori Ross Title: Manager
- ----------------------------------------------- ------------------------------------- ----------------------------------------- LENDING OFFICE (US FACILITY): LENDING OFFICE (CANADIAN FACILITY): LENDING OFFICE: (AUSTRALIAN FACILITY): Royal Bank of Canada Royal Bank of Canada Royal Bank of Canada One Liberty Plaza 180 Wellington Street West 167 Mac Quarie Street, Level 18 New York, NY 10006 Toronto, Ontario Sydney NSW 2000 Australia Attention: Lori Ross Telephone: (212) 428-6509 Telefacsimile: (212) 428-2319 For Business and Credit Matters: For Business and/or Credit Matters: E-mail: lross@royalusa.com Royal Bank of Canada (USA) Wire Transfer Instructions: One Liberty Plaza Royal Bank of Canada New York, NY 10006 One Liberty Plaza Royal Bank of Canada via Chase Manhattan Attention: Lori Ross New York, NY 10006 Bank, N.A. Telephone: (212) 428-6509 Attention: Lori Ross New York, NY Telefacsimile: (212) 428-2319 Telephone: (212) 428-6509 ABA No.: 021-000-021 Telefacsimile: (212) 428-2319 Account No.: 9201033363 for further credit to 218-599-9, Royal Bank of For Administrative Matters: (Australia) Canada Royal Bank of Canada Reference: American Greetings Royal Bank of Canada 167 Mac Quarie Street, Level 18 180 Wellington Street West Sydney NSW 2000 Australia Toronto, Ontario Attention: John Secker Attention: Adam Ahmed Telephone: 612 9373 0880 Operations Contact: Telephone: (416) 974-5302 Telefacsimile: 612 9221 2261 Telefacsimile: (416) 974-8119 Royal Bank of Canada For Administrative Matters: One Liberty Plaza Wire Transfer Instructions: Royal Bank of Canada New York, NY 10006 167 Mac Quarie Street Attention: Linda Joannou, Asst. Manager Royal Bank of Canada Sydney NSW 2000 Australia Telephone: (212) 428-6212 Account No.: 0002-102-683-0 Attention: Manager Loans Administration Telefacsimile: (212) 428-2372 Reference: EMCO Telephone: 612 9233 5500 Telefacsimile: 612 9221 2261 Wire Transfer Instructions: Royal Bank of Canada, Sydney ABA No.: BSB 935 001 Reference: Swift - TOYCAU2S Account No.: Royal Bank of Canada - ----------------------------------------------- ------------------------------------- -----------------------------------------
Signature Page 18 of 21 155 MELLON BANK, N.A., as US Facility Lender By: /s/ Mark F. Johnston -------------------------------------------- Name: Mark F. Johnston Title: Vice President Lending Office: One Mellon Bank Center Room 370 Pittsburgh, PA 15258-0001 Attention: Mark F. Johnston Telephone: (412) 236-2793 Telefacsimile: (412) 236-1914 E-mail: johnston.mf@mellon.com Wire Transfer Instructions: Mellon Bank, N.A. Pittsburgh, PA ABA No.: 043000261 Account Name: American Greetings Corporation Account No.: 990873800 Attn: Loan Administration Operations Contact: Mellon Bank, N.A. Three Mellon Bank Center Room 1203 Pittsburgh, PA 15259-0003 Attention: Peggy Young, Loan Administrator Telephone: (412) 234-9448 Telefacsimile: (412) 209-6138 Signature Page 19 of 21 156 MELLON BANK CANADA, as Canadian Facility Lender By: /s/ John P. Rehob -------------------------------------------- Name: John P. Rehob ------------------------------------------ Title: Operations Manager ----------------------------------------- Lending Office: Mellon Bank Canada 77 King Street West, Suite 3200 Toronto, Ontario M5K 1K2 Attention: Lisa Daley Telephone: (416) 860-2436 Telefacsimile: (416) 860-2439 Wire Transfer Instructions: Canadian Imperial Bank of Commerce ABA No.: CIBCCATT Reference: Carlton Cards Retail Account No.: 65-03810 For Credit: Mellon Bank Canada, Toronto (MELNCATT) Address for Other Notices: N/A Signature Page 20 of 21 157 PNC BANK, N.A., as US Facility Lender and UK Facility Lender By: /s/ Bruce G. Shearer -------------------------------------------- Name: Bruce G. Shearer Title: Vice President Lending Office: PNC Bank, N.A. Mail Stop P1P0PP051 249 Fifth Avenue Pittsburgh, Pennsylvania 15222 Attention: David Wheaton Telephone: (412) 768-7814 Telefacsimile: (412) 762-7353 Email: David.Wheaton@PNCBank.com Wire Transfer Instructions: PNC Bank, N.A. ABA No.: 043-000-096 Account No.: G/L 196030010890 Reference: American Greetings 30443786 Address for Other Notices for Administrative Matters: PNC Bank, N.A. Mail Stop P2PTPP035 620 Liberty Avenue Pittsburgh, PA 15222 Attention: Peggy Collier Telephone: (412) 762-7946 Telefacsimile: (412) 768-4586 E-mail: Peggy.Collier@PNCBank.com Signature Page 21 of 21 EX-4.I.V 3 l85631aex4-i_v.txt EXHIBIT 4(IV) 1 EXHIBIT 4(iv) ================================================================================ SECOND AMENDED AND RESTATED CREDIT AGREEMENT (amending the Amended and Restated Credit Agreement dated as of August 3, 2000) by and among AMERICAN GREETINGS CORPORATION, as US Facility Borrower, CARLTON CARDS (FRANCE) S.N.C., CARLTON CARDS LIMITED, UK GREETINGS LIMITED, and UKG SPECIALTY PRODUCTS LIMITED, as UK Facility Borrowers, CARLTON CARDS LIMITED, as Canadian Facility Borrower, JOHN SANDS (AUSTRALIA) LTD., JOHN SANDS (N.Z.) LTD. and JOHN SANDS HOLDING CORP., as Australian Facility Borrowers, BANK OF AMERICA, N.A., as Global Agent and as Lender, BANC OF AMERICA SECURITIES LIMITED (f/k/a BANK OF AMERICA INTERNATIONAL LIMITED), as UK Facility Agent, NATIONAL CITY BANK, as Global Co-Syndication Agent, US Facility Agent and as Lender, BANK ONE, MICHIGAN, as Global Co-Syndication Agent and as Lender, BANK ONE, NA, AUSTRALIA BRANCH, as Australian Facility Agent and as Lender, BANK ONE CANADA, as Canadian Facility Agent and as Lender, and THE LENDERS PARTY HERETO FROM TIME TO TIME April 30, 2001 BANC OF AMERICA SECURITIES LLC, as Sole Lead Arranger and Sole Book Manager ================================================================================ 2 TABLE OF CONTENTS Page ARTICLE I Definitions and Terms 1.01 Definitions.....................................................3 1.02 Rules of Interpretation........................................46 1.03 Amendment and Restatement......................................47 ARTICLE II The US Facility 2.01 Advances.......................................................49 2.02 Payment of Interest............................................52 2.03 Payment of Principal...........................................52 2.04 Manner of Payment..............................................52 2.05 Evidence of Indebtedness.......................................53 2.06 Pro Rata Payments..............................................53 2.07 Reductions.....................................................54 2.08 Conversions and Elections of Subsequent Interest Periods.......54 2.09 Facility Fee...................................................55 2.10 Deficiency Advances; Failure to Purchase Participations........55 2.11 Use of Proceeds................................................56 2.12 US Facility Extension..........................................56 2.13 US Term Loan Option............................................56 2.14 Participations.................................................57 ARTICLE IIA US Facility Letters of Credit 2A.01 Letters of Credit..............................................58 2A.02 Reimbursement and Participations...............................59 2A.03 Governmental Action............................................63 2A.04 Letter of Credit Facility Fees.................................63 2A.05 Letter of Credit Fronting and Administrative Fees..............63 ARTICLE III The UK Facility 3.01 Advances.......................................................64 3.02 Payment of Interest............................................68 3.03 Payment of Principal...........................................68 3.04 Manner of Payment..............................................69 3.05 Evidence of Indebtedness.......................................70 3.06 Pro Rata Payments..............................................70 3.07 Reductions.....................................................70 3.08 Conversions and Elections of Subsequent Interest Periods.......71 3.09 Facility Fee...................................................71 3.10 Deficiency Advances............................................71 i 3 3.11 Use of Proceeds................................................72 3.12 One Loan.......................................................72 3.13 Participations.................................................73 ARTICLE IIIA Bank Guarantees 3A.01 Bank Guarantees................................................74 3A.02 Reimbursement and Participations...............................74 3A.03 Governmental Action............................................77 3A.04 Bank Guarantee Facility Fees...................................78 3A.05 Bank Guarantee Fronting and Administrative Fees................78 ARTICLE IV The Canadian Facility 4.01 Advances.......................................................79 4.02 Payment of Interest............................................81 4.03 Payment of Principal...........................................83 4.04 Manner of Payment..............................................83 4.05 Evidence of Indebtedness.......................................84 4.06 Pro Rata Payments..............................................84 4.07 Reductions.....................................................84 4.08 Conversions and Elections of Subsequent Interest Periods.......85 4.09 Facility Fee...................................................85 4.10 Deficiency Advances............................................86 4.11 Use of Proceeds................................................86 4.12 Canadian Facility Extension....................................86 4.13 Canadian Term Loan Option......................................87 4.14 Participations.................................................88 4.15 Maximum Rate of Return.........................................88 ARTICLE V The Australian Facility 5.01 Advances.......................................................90 5.02 Payment of Interest............................................93 5.03 Payment of Principal...........................................93 5.04 Manner of Payment..............................................93 5.05 Evidence of Indebtedness.......................................94 5.06 Pro Rata Payments..............................................95 5.07 Reductions.....................................................95 5.08 Conversions and Elections of Subsequent Interest Periods.......95 5.09 Facility Fee...................................................96 5.10 Deficiency Advances............................................96 5.11 Use of Proceeds................................................97 5.12 One Loan.......................................................97 5.13 Swing Line.....................................................98 5.14 Participations................................................100 ii 4 ARTICLE VI Changes in Circumstances 6.01 Increased Cost and Reduced Return.............................101 6.02 Limitation on Types of Loans..................................103 6.03 Illegality....................................................103 6.04 Treatment of Affected Loans...................................103 6.05 Compensation..................................................104 6.06 Taxes.........................................................104 6.07 Replacement Lender............................................107 6.08 Funding.......................................................108 6.09 Economic and Monetary Union in the European Community.........108 ARTICLE VII Conditions to Closing and to Making Loans, 7.01 Conditions of Closing.........................................110 7.02 Conditions of Loans, Letters of Credit and Bank Guarantees....112 ARTICLE VIII Representations and Warranties 8.01 Representations and Warranties as to Borrowers and Subsidiaries...............................................115 8.02 Representations and Warranties of the Company.................116 ARTICLE IX Affirmative Covenants 9.01 Financial Reports, Etc........................................121 9.02 Debt Ratings..................................................122 9.03 Maintain Properties...........................................122 9.04 Existence, Qualification, Etc.................................122 9.05 Regulations and Taxes.........................................122 9.06 Insurance.....................................................122 9.07 True Books....................................................123 9.08 Right of Inspection...........................................123 9.09 Observe all Laws..............................................123 9.10 Covenants Extending to Subsidiaries...........................123 9.11 Officer's Knowledge of Default................................123 9.12 Suits or Other Proceedings....................................123 9.13 Environmental Compliance......................................123 9.14 Further Assurances............................................124 9.15 Continued Operations..........................................124 9.16 Use of Proceeds...............................................124 9.17 Mandatory Prepayments and Commitment Reductions...............124 9.18 Opinions of Foreign Counsel...................................125 ARTICLE X Negative Covenants 10.01 Consolidated Funded Indebtedness to Consolidated Total Capitalization.......................................126 10.02 Consolidated EBIT to Consolidated Interest Expense............126 iii 5 10.03 Liens.........................................................126 10.04 Transfer of Assets............................................127 10.05 Merger or Consolidation.......................................128 10.06 Transactions with Affiliates..................................128 10.07 ERISA.........................................................128 10.08 Acquisitions..................................................129 10.09 Negative Pledge...............................................129 10.10 Dissolution, Etc..............................................130 10.11 Restrictive Agreements........................................130 10.12 Subsidiary Indebtedness.......................................130 10.13 Permitted Asset Securitizations...............................130 ARTICLE XI Events of Default and Acceleration 11.01 Events of Default.............................................131 11.02 Global Agent to Act...........................................134 11.03 Cumulative Rights.............................................134 11.04 No Waiver.....................................................134 11.05 Allocation of Proceeds........................................134 11.06 Judgment Currency.............................................135 11.07 Funding and Payment of Participations; Conversion to US Dollars.................................................135 ARTICLE XII The Agents 12.01 Appointment, Powers, and Immunities...........................138 12.02 Reliance by Agents............................................139 12.03 Defaults......................................................139 12.04 Rights as Lender..............................................140 12.05 Indemnification...............................................141 12.06 Non-Reliance on Agents and Other Lenders......................141 12.07 Resignation of an Agent......................................141 12.08 Fees..........................................................142 ARTICLE XIII Miscellaneous 13.01 Assignments and Participations................................143 13.02 Notices.......................................................145 13.03 Right of Set-off; Adjustments.................................147 13.04 Survival......................................................148 13.05 Expenses......................................................148 13.06 Amendments and Waivers........................................148 13.07 Counterparts..................................................149 13.08 Termination...................................................149 13.09 Usury Savings Clause..........................................150 13.10 Indemnification; Limitation of Liability......................151 13.11 Agreement Controls............................................152 13.12 Severability..................................................152 13.13 Entire Agreement..............................................152 iv 6 13.14 Governing Law; Waiver of Jury Trial...........................152 13.15 Special Funding Option........................................153 EXHIBIT A Lenders' Commitments and Applicable Commitment Percentages...............................................A-1 EXHIBIT B Form of Assignment and Acceptance.............................B-1 EXHIBIT C Notice of Appointment (or Revocation) of Authorized Representative............................................C-1 EXHIBIT D-1 Borrowing Notice (U.S. Facility Loans)....................D-1-1 EXHIBIT D-2 Borrowing Notice (UK Facility Loans)......................D-2-1 EXHIBIT D-3 Borrowing Notice (Canadian Facility Loans)................D-3-1 EXHIBIT D-4 Borrowing Notice (Australian Facility Loans other than....................................................D-4-1 EXHIBIT D-5 Form of Borrowing Notice - Australian Facility Swing Line Loans........................................D-5-1 EXHIBIT E Form of Guaranty Agreement..................................E-1 EXHIBIT F Form of LC Account Agreement................................F-1 EXHIBIT G-1 Form of Opinion of US Counsel for Borrowers and Guarantor...............................................G-1-1 EXHIBIT G-2 Form of Opinion of New York Counsel for Borrowers and Guarantor...............................................G-2-1 EXHIBIT H Form of Compliance Certificate..............................H-1 EXHIBIT I Form of Bank Guarantee Cash Account Agreement...............I-1 SCHEDULE 1.01(a) Authorized Representatives.............................S-1 SCHEDULE 1.01(b) Existing Letters of Credit.............................S-2 SCHEDULE 1.01 (c) Existing Bank Guarantees..............................S-7 SCHEDULE 8.02(a) Subsidiaries and Stockholders..........................S-9 SCHEDULE 8.02(f) Litigation............................................S-10 SCHEDULE 10.03 Existing Liens..........................................S-11 SCHEDULE 10.06 Transactions with Affiliates............................S-14 v 7 SECOND AMENDED AND RESTATED CREDIT AGREEMENT THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 30, 2001 (the "Agreement"), is effective as an amendment to the Amended and Restated Credit Agreement dated as of August 3, 2000 by and among the Borrowers, the Agents and the Lenders, as amended by First Amendment to Amended and Restated Credit Agreement dated as of March 23, 2001 (the "Existing Credit Agreement") upon execution by the Borrowers and Required Lenders, and is made and effective by and among: AMERICAN GREETINGS CORPORATION, a corporation duly organized and existing under the laws of the State of Ohio (the "Company" and the "US Facility Borrower"); and CARLTON CARDS (FRANCE) S.N.C., a societe en nom collectif organized under the laws of France, registered with the Registry of Commerce and of Companies of La Courneuve under Number RCS B 387 702 954 ("Carlton France"); and CARLTON CARDS LIMITED (Registered No. 61412), UK GREETINGS LIMITED (Registered No. 3480710) and UKG SPECIALTY PRODUCTS LIMITED (Registered No. 3220599), each a corporation duly organized and existing under the laws of England and Wales (collectively, the "UK Subsidiaries" and, together with Carlton France, the "UK Facility Borrowers"); and CARLTON CARDS LIMITED, a corporation duly organized and existing under the laws of Ontario, Canada (the "Canadian Facility Borrower"); and JOHN SANDS (AUSTRALIA) LTD., JOHN SANDS HOLDING CORP. and JOHN SANDS (N.Z.) LTD., each a corporation duly organized and existing under the laws of Delaware and doing business in Australia (collectively, the "Australian Facility Borrowers"; the US Facility Borrower, the UK Facility Borrowers, the Canadian Facility Borrower and the Australian Facility Borrowers are sometimes referred to collectively as the "Borrowers" or individually as a "Borrower"); and BANK OF AMERICA, N.A., NATIONAL CITY BANK, BANK ONE, MICHIGAN, KEYBANK NATIONAL ASSOCIATION, ROYAL BANK OF CANADA, MELLON BANK, N.A., BARCLAYS BANK PLC and PNC BANK N.A., the lenders under the US Facility, and each other lender which may hereafter execute and deliver an instrument of assignment with respect to the US Facility under this Agreement pursuant to SECTION 13.01 (hereinafter such lenders may be referred to individually as a "US Facility Lender" or collectively as the "US Facility Lenders"); and BANK OF AMERICA CANADA, BANK ONE CANADA, ROYAL BANK OF CANADA and MELLON BANK, N.A., CANADA BRANCH, the lenders under the Canadian Facility, and each other lender which may hereafter execute and deliver an instrument of assignment with respect to the Canadian Facility under this Agreement pursuant to SECTION 13.01 (hereinafter such lenders may be referred to individually as a "Canadian Facility Lender" or collectively as the "Canadian Facility Lenders"); and 8 BANK OF AMERICA, N.A., NATIONAL CITY BANK, PNC BANK, N.A., BARCLAYS BANK PLC and KEYBANK NATIONAL ASSOCIATION, the lenders under the UK Facility, and each other lender which may hereafter execute and deliver an instrument of assignment with respect to the UK Facility under this Agreement pursuant to SECTION 13.01 (hereinafter such lenders may be referred to individually as a "UK Facility Lender" or collectively as the "UK Facility Lenders"); and BA AUSTRALIA LIMITED, BANK ONE, NA, AUSTRALIA BRANCH, and ROYAL BANK OF CANADA, the Lenders under the Australian Facility, and each other lender which may hereafter execute and deliver an instrument of assignment with respect to the Australian Facility under this Agreement pursuant to SECTION 13.01 (hereinafter such lenders may be referred to individually as an "Australian Facility Lender" or collectively as the "Australian Facility Lenders"; the US Facility Lenders, the Canadian Facility Lenders, the UK Facility Lenders and the Australian Facility Lenders are sometimes referred to collectively as the "Lenders" or individually as a "Lender"); and BANK ONE, MICHIGAN, in its capacity as global co-syndication agent for each of the Lenders; and NATIONAL CITY BANK, in its capacity as agent for the US Facility Lenders (the "US Facility Agent") and in its capacity as global co-syndication agent for each of the Lenders (together with Bank One, Michigan, the "Global Co-Syndication Agents"); and BANC OF AMERICA SECURITIES LIMITED (f/k/a BANK OF AMERICA INTERNATIONAL LIMITED), a limited liability company authorized in England as a credit institution under the Banking Act 1987 ("BASL"), in its capacity as agent for the UK Facility Lenders (the "UK Facility Agent"); and BANK ONE CANADA, in its capacity as agent for the Canadian Facility Lenders (the "Canadian Facility Agent"); and BANK ONE, NA, AUSTRALIA BRANCH, in its capacity as agent for the Australian Facility Lenders (the "Australian Facility Agent"); the US Facility Agent, the UK Facility Agent, the Canadian Facility Agent and the Australian Facility Agent are sometimes referred to collectively as the "Facility Agents" or individually as a "Facility Agent"); and BANK OF AMERICA, N.A., in its capacity as global administrative agent for each of the Lenders (the "Global Agent" and together with the Facility Agents and the Global Co-Syndication Agents, the "Agents"). W I T N E S S E T H: ------------------- WHEREAS, the Borrowers, the Agents and certain of the Lenders have entered into that certain Credit Agreement dated as of August 7, 1998, as amended by Amendment No. 1 to Credit Agreement dated as of August 5, 1999 (as so amended, the "Original Credit Agreement"), 2 9 pursuant to which such Lenders have made available to the Borrowers revolving credit and term loan facilities, as evidenced under the US Facility (as hereinafter defined) by the promissory notes delivered in connection with the Original Credit Agreement (the "Original Notes"); and WHEREAS, (a) Bank of America, N.A. resigned as Australian Facility Agent under the Original Credit Agreement and was replaced by Bank One, NA, Australia Branch, (b) Bank of America Canada resigned as Canadian Facility Agent under the Original Credit Agreement and was replaced by Bank One Canada, and (c) the Original Credit Agreement was amended and restated by the Existing Credit Agreement; and WHEREAS, Camden Graphics Limited was merged into Hanson White Group Limited and Hanson White Group Limited changed its name to UKG Specialty Products Limited; and WHEREAS, the Borrowers have requested that the Lenders amend the Existing Credit Agreement; and WHEREAS, subject to the terms and conditions herein stated, the Agents and the Required Lenders are willing to amend the Existing Credit Agreement and the Agents and the Lenders are willing to continue to make certain credit facilities available to the Borrowers upon the terms and conditions set forth herein; and WHEREAS, the parties hereto agree that this Agreement is effective as a restatement of the Existing Credit Agreement concurrent with the effectiveness of the amendments thereto contained herein in order to facilitate the parties' understanding of the amendments contained herein. NOW, THEREFORE, in consideration of the mutual covenants and the fulfillment of the conditions set forth herein, and intending to be legally bound, the parties hereto do hereby agree that the Existing Credit Agreement is amended and restated in its entirety as follows: ARTICLE I DEFINITIONS AND TERMS 1.01 DEFINITIONS. For the purposes of this Agreement, in addition to the definitions set forth above, the following terms shall have the respective meanings set forth below: "ADVANCE" means a US Facility Advance, a UK Facility Advance, a Canadian Facility Advance or an Australian Facility Advance, as the case may be. "AFFECTED LOANS" shall have the meaning therefor set forth in SECTION 6.04. "AFFECTED TYPE" shall have the meaning therefor-set forth in SECTION 6.04. 3 10 "AFFILIATE" means any Person (i) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the Company; or (ii) which beneficially owns or holds 10% or more of any class of the outstanding Voting Stock of the Company; or (iii) 10% or more of any class of the outstanding Voting Stock (or in the case of a Person which is not a corporation, 10% or more of the equity or other ownership interest) of which is beneficially owned or held by the Company. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of Voting Stock, by contract or otherwise. "AGGREGATE COMMITMENT" means, with respect to any Lender, its US Facility Commitment and, as applicable, the US Dollar Equivalent Amount of the sum of its UK Facility Commitment, its Canadian Facility Commitment and its Australian Facility Commitment. "AGGREGATE CREDIT EXPOSURE" shall have the meaning therefor set forth in the definition of "Credit Exposure." "AGGREGATE FACILITY CREDIT EXPOSURE" shall have the meaning therefor set forth in the definition of "Facility Credit Exposure." "APPLICABLE BANK GUARANTEE ISSUER" means, with respect to any Bank Guarantee, the Bank Guarantee Issuer which issued such Bank Guarantee and any successors thereto. "APPLICABLE BASE RATE" means (i) with respect to all matters involving the US Facility, including without limitation Reimbursement Obligations, the US Facility Base Rate, (ii) with respect to all matters involving the UK Facility, including without limitation Reimbursement Obligations, the UK Facility Base Rate, (iii) with respect to all matters involving the Canadian Facility, the Canadian Facility Base Rate, and (iv) with respect to all matters involving the Australian Facility, including without limitation the Australian Facility Swing Line Loans, the Australian Facility Base Rate or the Australian Facility Prime Rate, as the case may be. "APPLICABLE BASE RATE LOAN" means a Loan bearing interest at an Applicable Base Rate. "APPLICABLE BORROWERS" means (i) with respect to all matters involving the US Facility, the US Facility Borrower, (ii) with respect to all matters involving the UK Facility, the UK Facility Borrowers, (iii) with respect to all matters involving the Canadian Facility, the Canadian Facility Borrower, and (iv) with respect to all matters involving the Australian Facility, the Australian Facility Borrowers. "APPLICABLE COMMITMENT PERCENTAGE" means, for each Lender, with respect to the Obligations hereunder arising in connection with each separate Facility and the Total Facilities, a fraction (expressed as a percentage), the numerator of which shall be the amount of such Lender's Aggregate Commitment and the denominator of which shall be the Total Commitment, each as of the date of determination, which Applicable Commitment Percentage for each Lender as of the Closing Date is as set forth in EXHIBIT A attached hereto and incorporated herein by reference; provided that the Applicable Commitment Percentages of each Lender shall be 4 11 increased or decreased to reflect any assignments to or by such Lender effected in accordance with SECTION 13.01 hereof. "APPLICABLE CURRENCY" means (i) with respect to the US Facility, US Dollars, or, if the context requires, the applicable Letter of Credit Currency, (ii) with respect to the UK Facility (including the Bank Guarantee Facility), British Pounds Sterling or, if the context requires either French Francs or euro, (iii) with respect to the Canadian Facility, Canadian Dollars and (iv) with respect to the Australian Facility, Australian Dollars or, if the context requires, New Zealand Dollars. "APPLICABLE FACILITY AGENT" means (i) with respect to all matters involving the US Facility, the US Facility Agent, (ii) with respect to all matters involving the UK Facility, the UK Facility Agent, (iii) with respect to all matters involving the Canadian Facility, the Canadian Facility Agent and (iv) with respect to all matters involving the Australian Facility, the Australian Facility Agent. "APPLICABLE FACILITY COMMITMENT" means, with respect to any Lender and any Facility, the obligation of such Lender to incur Facility Credit Exposure as an Applicable Lender or Participant in such Facility, as applicable, up to an aggregate principal amount at any time outstanding equal to the product of such Lender's Applicable Commitment Percentage multiplied by the Applicable Total Facility Commitment, as the same may be increased or decreased from time to time pursuant to this Agreement. "APPLICABLE FACILITY LENDERS" means (i) with respect to all matters involving the US Facility, the US Facility Lenders, (ii) with respect to all matters involving the UK Facility, the UK Facility Lenders, (iii) with respect to all matters involving the Canadian Facility, the Canadian Facility Lenders and (iv) with respect to all matters involving the Australian Facility, the Australian Facility Lenders. "APPLICABLE FRONTING COMMITMENT" means, for any Lender, (i) with respect to the US Facility, such Lender's US Facility Fronting Commitment, if any, (ii) with respect to the UK Facility, such Lender's UK Facility Fronting Commitment, if any, (iii) with respect to the Canadian Facility, such Lender's Canadian Facility Fronting Commitment, if any, and (iv) with respect to the Australian Facility, such Lender's Australian Facility Fronting Commitment, if any. "APPLICABLE FRONTING PERCENTAGE" means (i) for each US Facility Lender, with respect to the Obligations hereunder arising in connection with the US Facility, a fraction (expressed as a percentage), the numerator of which shall be the amount of its US Facility Fronting Commitment and the denominator of which shall be the Total US Facility Commitment, each as of the date of determination, which Applicable Fronting Percentage for each US Facility Lender as of the Closing Date is as set forth in EXHIBIT A attached hereto and incorporated herein by this reference; (ii) for each UK Facility Lender, with respect to the Obligations hereunder arising in connection with the UK Facility, a fraction (expressed as a percentage), the numerator of which shall be the amount of its UK Facility Fronting Commitment and the denominator of which shall be the Total UK Facility Commitment, each as of the date of determination, which Applicable 5 12 Fronting Percentage for each UK Facility Lender as of the Closing Date is as set forth in EXHIBIT A attached hereto and incorporated herein by this reference; (iii) for each Canadian Facility Lender, with respect to the Obligations hereunder arising in connection with the Canadian Facility, a fraction (expressed as a percentage), the numerator of which shall be the amount of its Canadian Facility Fronting Commitment and the denominator of which shall be the Total Canadian Facility Commitment, each as of the date of determination, which Applicable Fronting Percentage for each Canadian Facility Lender as of the Closing Date is as set forth in EXHIBIT A attached hereto and incorporated herein by this reference; and (iv) for each Australian Facility Lender, with respect to the Obligations hereunder arising in connection with the Australian Facility, a fraction (expressed as a percentage), the numerator of which shall be the amount of its Australian Facility Fronting Commitment and the denominator of which shall be the Total Australian Facility Commitment, each as of the date of determination, which Applicable Fronting Percentage for each Australian Facility Lender as of the Closing Date is as set forth in EXHIBIT A attached hereto and incorporated herein by this reference; provided that the Applicable Fronting Percentages of each Lender shall be increased or decreased to reflect any assignments to or by such Lender effected in accordance with SECTION 13.01 hereof. "APPLICABLE LENDERS" means (i) with respect to all matters involving the US Facility, the US Facility Lenders, (ii) with respect to all matters involving the UK Facility, the UK Facility Lenders, (iii) with respect to all matters involving the Canadian Facility, the Canadian Facility Lenders, and (iv) with respect to all matters involving the Australian Facility, the Australian Facility Lenders. "APPLICABLE LENDING OFFICE" means, for each Lender and for each Type and Applicable Currency of Loan, the "Lending Office" of such Lender (or of an affiliate of such Lender) designated for such Type and Applicable Currency of Loan on the signature pages hereof or in an Assignment and Acceptance, or such other office of such Lender (or an affiliate of such Lender) as such Lender may from time to time specify to the Applicable Facility Agent and the Applicable Borrowers by written notice in accordance with the terms hereof as the office by which its Loans of such Type and Applicable Currency are to be made and maintained. "APPLICABLE MARGIN" means (i) for purposes of calculating the applicable Facility Fee and the applicable interest rate for any Interest Period for each Fixed Rate Loan under each of the UK Facility, the Australian Facility, and the Canadian Facility Full Maturity Tranche, that percent per annum set forth below opposite the Applicable Debt Rating Level (as hereinafter defined) as determined from the rating assigned to each class of long term senior unsecured indebtedness of the Company (the "Rated Debt") by S&P and Moody's (the "Debt Rating"), which shall be effective on the Closing Date and is thereafter subject to change beginning on the effective date of a change in the Applicable Debt Rating Level (the "Debt Rating Date"), and which shall continue until, but not including, the immediate next Debt Rating Date: Applicable Applicable Margin for Applicable Margin for Debt Rating Level Facility Fees Fixed Rate Loans ----------------- ------------- ---------------- Level S&P Moody's 6 13 I A or higher A2 or higher 0.085% 0.915% II A- A3 0.100% 0.900% III BBB+ Baa1 0.125% 0.875% IV BBB Baa2 0.175% 0.825% V BBB- Baa3 0.250% 1.250% VI BB+ Ba1 0.350% 1.650% VII BB or lower Ba2 or lower 0.500% 2.00% and (ii) for purposes of calculating the applicable Facility Fee and the applicable interest rate for any Interest Period for each Fixed Rate Loan under the US Facility and the Canadian Facility Renewable Tranche, that percent per annum set forth below opposite the Applicable Debt Rating Level, which shall be effective on the Closing Date and is thereafter subject to change on each Debt Rating Date, and which shall continue until, but not including, the immediate next Debt Rating Date:
Applicable Applicable Margin for Applicable Margin for Debt Rating Level Facility Fees Fixed Rate Loans ----------------- ------------- ---------------- Level S&P Moody's I A or higher A2 or higher 0.070% 0.930% II A- A3 0.085% 0.915% III BBB+ Baa1 0.100% 0.900% IV BBB Baa2 0.150% 0.850% V BBB- Baa3 0.225% 1.275% VI BB+ Ba1 0.300% 1.700% VII BB or lower Ba2 or lower 0.450% 2.050%
The level for determining the Applicable Margin based on the Debt Ratings (the "APPLICABLE DEBT RATING LEVEL") shall be determined by reference to the level in the charts that contains the Debt Ratings assigned by both S&P and Moody's, subject to the following: a. So long as neither Debt Rating is below BBB or Baa2, if the Debt Ratings assigned by S&P and Moody's differ by one rating level, the Applicable Debt Rating Level shall be determined by reference to the level in the charts above having the higher assigned Debt Rating without regard to the lower assigned Debt Rating. b. So long as neither Debt Rating is below BBB or Baa2, if the Debt Ratings assigned by S&P and Moody's differ by more than one rating level, the Applicable Debt Rating Level shall be determined by reference to the Debt Rating which is one rating level lower than the higher assigned Debt Rating without regard to the lower assigned Debt Rating. By way of illustration under (i) above and not limitation, if S&P assigns a rating of A - (i.e., Level II) and Moody's assigns a rating of Baa1 (i.e., Level III), the 7 14 Applicable Margin for Facility Fees will be 0.10% (i.e., Level II) and the Applicable Margin for Fixed Rate Loans will be 0.400% (i.e., Level II); if S&P assigns a rating of A (i.e., Level I) and Moody's assigns a rating of Baa2 (i.e., Level IV), the Applicable Margin for Facility Fees will be 0.10% (i.e., Level II) and the Applicable Margin for Fixed Rate Loans will be 0.400% (i.e., Level II). c. If either Debt Rating is below BBB or Baa2 and the Debt Ratings assigned by S&P and Moody's differ by one or more rating levels, the Applicable Debt Rating Level shall be determined by reference to the level in the charts above having the lower assigned Debt Rating without regard to the higher assigned Debt Rating. By way of illustration under (i) above and not limitation, if S&P assigns a rating of BBB- (i.e., Level V) and Moody's assigns a rating of Baa1 (i.e., Level III), the Applicable Margin for Facility Fees will be 0.250% (i.e., Level V) and the Applicable Margin for Fixed Rate Loans will be 1.00% (i.e., Level V). d. In the event that either S&P or Moody's (but not both) shall not make a Debt Rating of any class of Rated Debt, because it is no longer in the business of making Debt Ratings of senior long term unsecured indebtedness of any issuer or obligor, the Applicable Debt Rating Level shall be determined based on the Debt Rating provided by S&P or Moody's, whichever shall then maintain a current rating of the Rated Debt and the rating provided by a nationally recognized securities rating agency selected by the Borrower and approved by the Agent, which shall be substituted for either S&P or Moody's, as the case may be (the "Alternative Rating Agency"), of the Rated Debt and the Alternative Rating Agency's equivalent rating levels shall be substituted for the Debt Rating levels of either S&P or Moody's, whichever shall no longer then make the applicable Debt Rating. e. In the event that no Alternative Rating Agency shall make a rating of each class of Rated Debt and (A) only one of S&P or Moody's shall then make a Debt Rating, the Applicable Debt Rating Level shall be determined by the Debt Rating which is one level lower than the Debt Rating assigned by S&P or Moody's, as applicable (e.g., if only Moody's provides a Debt Rating and such Debt Rating is Level III, the Applicable Debt Rating Level shall be at Level IV); or (B) neither S&P nor Moody's shall then make a Debt Rating, the Applicable Debt Rating Level shall be Level VII. The Global Agent shall notify each Facility Agent, within one (1) Business Day of the effectiveness of any change in the Applicable Margins, of such new Applicable Margin. "APPLICABLE RATE" means the applicable interest rate for any Fixed Rate Loan or Floating Rate Loan available in a specific Facility as selected by the Applicable Borrower or otherwise applicable hereunder. "APPLICABLE REFERENCE RATE" means (i) for any Eurodollar Rate Loan made under the US Facility for any Interest Period therefor, the rate per annum determined by the US Facility Agent to appear on 8 15 Telerate Page 3750 or other appropriate Telerate Page (or any successor page) as the London interbank offered rate for deposits in the Applicable Currency at approximately 11:00 A.M. (London, England time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the term "Applicable Reference Rate" shall mean, for any Eurodollar Rate Loan for any Interest Period therefor, the rate per annum determined by the US Facility Agent to appear on Reuters Screen LIBO Page as the London interbank offered rate for deposits in the Applicable Currency at approximately 11:00 A.M. (London, England time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates; and (ii) for any Offshore Rate Loan made in British Pounds Sterling under the UK Facility for any Interest Period therefor, the rate per annum equal to the sum of (a) LIBOR plus (b) the UK Facility Mandatory Cost, in each case on the first day of such Interest Period for a term comparable to such Interest Period; and (iii) for any Offshore Rate Loan made in French Francs or euro under the UK Facility for any Interest Period therefor, the rate per annum equal to LIBOR as of two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; (iv) for any Offshore Rate Loan made in Australian Dollars under the Australian Facility for any Interest Period therefor, the rate per annum equal to the sum of (a) the Australian Bank Bill Swap Reference Rate plus (b) the additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) to the Australian Facility Lenders of complying with any reserve ratio requirement or analogous requirement of any central banking or financial regulatory authority imposed in respect of the funding or maintenance of the Australian Facility Commitments or the Australian Facility Loans; and (v) for any Offshore Rate Loan made in New Zealand Dollars under the Australian Facility for any Interest Period therefor, the rate per annum equal to the sum of (a) the New Zealand Bank Bill Reference Rate plus (b) the additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) to the Australian Facility Lenders of complying with any reserve ratio requirement or analogous requirement of any central banking or financial regulatory authority imposed in respect of the funding or maintenance of the Australian Facility Commitments or the Australian Facility Loans. "APPLICABLE RESERVE REQUIREMENT" means, at any time, for any Eurodollar Rate Loan the maximum rate at which reserves (including, without limitation, any marginal, special, supplemental or emergency reserves) are required to be maintained with respect thereto under regulations issued from time to time by the Board or other applicable banking regulator by the member banks of the Federal Reserve System against, "Eurocurrency liabilities" (as such term is 9 16 defined in Regulation D). Without limiting the effect of the foregoing, the Applicable Reserve Requirement shall reflect any other reserves required to be maintained by such member banks with respect to (i) any category of liabilities which includes deposits by reference to which the applicable Eurodollar Rate or any other interest rate of a Loan is to be determined, or (ii) any category of extensions of credit or other assets which include Eurodollar Rate Loans. An Eurodollar Rate Loan shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credit for pro ration, exceptions or offsets that may be available from time to time to the applicable Lender. The rate of interest on Eurodollar Rate Loans shall be adjusted automatically on and as of the effective date of any change in the Applicable Reserve Requirement. "APPLICABLE TERM LOAN TERMINATION DATE" means (i) with respect to the US Facility Term Loan Facility, the US Facility Term Loan Termination Date and (ii) with respect to the Canadian Facility Term Loan Facility, the Canadian Facility Term Loan Termination Date. "APPLICABLE TOTAL FACILITY COMMITMENT" means (i) with respect to the US Facility, the Total US Facility Commitment, (ii) with respect to the UK Facility, the Total UK Facility Commitment, (iii) with respect to the Canadian Facility, the Total Canadian Facility Commitment and (iv) with respect to the Australian Facility, the Total Australian Facility Commitment. "APPLICATIONS AND AGREEMENTS FOR LETTERS OF CREDIT" means , collectively, the Applications and Agreements for Letters of Credit, or similar documentation, executed by the US Facility Borrower from time to time and delivered to the Issuing Bank to support the issuance of Letters of Credit. "ASSET DISPOSITION" means any voluntary disposition, whether by sale, lease or transfer, of (a) any or all of the assets (excluding assets sold pursuant to a Permitted Asset Securitization) of the Company or its Subsidiaries, or (b) any of the capital stock or securities and investments interchangeable, exercisable or convertible for or into, or otherwise entitling the holder to receive, any of the capital stock of any Subsidiary. "ASSIGNMENT AND ACCEPTANCE" shall mean an Assignment and Acceptance substantially in the form of EXHIBIT B (with blanks appropriately filled in) delivered to the Global Agent and the Applicable Facility Agents in connection with an assignment of a Lender's interest in a specific Facility under this Agreement pursuant to SECTION 13.01. "AUSTRALIAN BANK BILL SWAP REFERENCE RATE" means (i) for any date of determination with respect to any Interest Period for an Offshore Rate Loan made in Australian Dollars under the Australian Facility, (a) the rate (expressed as a percentage yield per annum to maturity) determined by the Australian Facility Agent to be the rate (rounded upwards, if necessary, to the nearest 0.01%) quoted as the average bid rate on the Reuters Monitor System page "BBSY" at or about 10:00 A.M. (Sydney, Australia time) on the first day of such Interest Period for bank accepted bills having a term equal to (or no more than two (2) Business Days shorter or longer than) such Interest Period, or (b) if (x) for any reason there is no average bid rate displayed on the Reuters Monitor System screen BBSY page for bank accepted bills of that term or (y) the 10 17 basis on which such rates are displayed on the Reuters Monitor System screen BBSY page is changed and in the opinion of Australian Facility Agent those rates cease to reflect the Australian Facility Lenders' cost of funding to the same extent as at the date of this Agreement, then the rate (expressed as a percentage yield per annum to maturity) determined by Australian Facility Agent to be the average of the bid rates quoted to Australian Facility Agent by three Australian banks selected by Australian Facility Agent at or about that time on that day for the purchase of bills accepted by such banks having a face value amount equal to the principal amount of such Australian Facility Loan and a term as described in clause (i)(a) of this definition; provided that such buying rates must be for bills of exchange which are accepted by an Australian bank selected by Australian Facility Agent and which have a term equivalent to the relevant Interest Period; or (ii) for any date of determination for purposes of determining the Australian Facility Base Rate for an Australian Facility Base Rate Loan made in Australian Dollars under the Australian Facility, or in the event the Australian Bank Bill Swap Reference Rate cannot be determined as described in clause (i) of this definition, the rate determined by Australian Facility Agent to be the arithmetic mean (rounded upwards to the nearest 1/16th of one percent) of the rates, as supplied to Australian Facility Agent at its request, quoted by the Australian Facility Lenders to leading banks in the Australian interbank market at or about 10:00 A.M. (Sydney, Australia time) on such date for the offering of overnight deposits in Australian Dollars. "AUSTRALIAN DOLLAR EQUIVALENT AMOUNT" means, (a) the amount denominated in Australian Dollars and (b) with respect to a specified amount of New Zealand Dollars, the amount of Australian Dollars into which such amount of New Zealand Dollars would be converted, based on the applicable Spot Rate of Exchange. "AUSTRALIAN DOLLAR FRONTING COMMITMENT" means, with respect to each Australian Facility Lender, at any date of determination, the obligation of such Lender to make Australian Facility Loans in Australian Dollars to the Australian Facility Borrowers and the obligation of such Lender to purchase Participations in Australian Facility Swing Line Loans on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Percentage for the Australian Facility multiplied by the Total Australian Dollar Commitment as of such date, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement. "AUSTRALIAN DOLLAR OUTSTANDINGS" means, at any date of determination, that portion of the Australian Facility Outstandings representing the aggregate principal amount of all Australian Facility Loans outstanding in Australian Dollars. "AUSTRALIAN DOLLARS" or "AUS $" means the lawful currency of Australia. "AUSTRALIAN FACILITY" means the facility described in ARTICLE V hereof providing for Loans to the Australian Facility Borrowers by the Australian Facility Lenders in the aggregate principal amount of the Total Australian Facility Commitment. "AUSTRALIAN FACILITY ADVANCE" means a borrowing under the Australian Facility consisting of the aggregate principal amount of an Australian Facility Base Rate Loan or Offshore Rate Loan, or an Australian Facility Swing Line Loan, as the case may be. 11 18 "AUSTRALIAN FACILITY AGENT" shall have the meaning therefor set forth in the introduction hereto. "AUSTRALIAN FACILITY BASE RATE" means, for any day, the rate per annum equal to the Australian Bank Bill Swap Reference Rate in effect on such day for one-day borrowings in Australian Dollars. "AUSTRALIAN FACILITY BASE RATE LOAN" means an Australian Facility Loan for which the rate of interest is determined by reference to the Australian Facility Base Rate. "AUSTRALIAN FACILITY BASE RATE REFUNDING LOAN" means an Australian Facility Base Rate Loan made to pay the Australian Facility Swing Line Lender in respect of Australian Facility Swing Line Outstandings. "AUSTRALIAN FACILITY BORROWERS" shall have the meaning therefor set forth in the introduction hereto. "AUSTRALIAN FACILITY COMMITMENT" means, with respect to any Lender, such Lender's Applicable Facility Commitment for the Australian Facility. "AUSTRALIAN FACILITY FRONTING COMMITMENT" means, with respect to each Australian Facility Lender, the obligation of such Lender to make Australian Facility Loans to the Australian Facility Borrowers and the obligation of such Lender to purchase Participations in Australian Facility Swing Line Loans on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Percentage for the Australian Facility multiplied by the Total Australian Facility Commitment, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement, and shall consist of (but not be equal to the sum of the aggregate of) such Lender's Australian Dollar Fronting Commitment and its New Zealand Dollar Fronting Commitment. "AUSTRALIAN FACILITY LENDERS" means those Lenders identified in the introduction hereto with respect to their making Australian Facility Loans on behalf of all the Lenders (and including the Australian Facility Swing Line Lender). "AUSTRALIAN FACILITY LOANS" means any borrowing pursuant to an Australian Facility Advance under the Australian Facility in accordance with the terms of SECTION 5.01 or SECTION 5.13 hereof. "AUSTRALIAN FACILITY MAXIMUM AMOUNT" means, with respect to each Australian Facility Borrower, 95% of the amount by which the fair value of its assets (determined at the lesser of fair valuation and present fair saleable value on an orderly basis) is in excess of the total amount of its liabilities, including without limitation Contingent Obligations, as of the Closing Date; provided, however, that if the calculation of Australian Facility Maximum Amount in the manner provided above as of the date payment is required of such Australian Facility Borrower pursuant 12 19 to ARTICLE V would result in a greater positive number, then the Australian Facility Maximum Amount shall be such greater positive number. "AUSTRALIAN FACILITY NEW ZEALAND DOLLAR TRANCHE" means the facility described in ARTICLE V hereof providing for Loans funded in New Zealand Dollars to the Australian Facility Borrowers by the Australian Facility Lenders in an aggregate principal amount not to exceed the Total New Zealand Dollar Commitment. "AUSTRALIAN FACILITY OUTSTANDINGS" means, at any date of determination, the Australian Dollar Outstandings, specifically including all Australian Facility Swing Line Outstandings, plus the New Zealand Dollar Outstandings. "AUSTRALIAN FACILITY PRIME RATE" means the per annum rate of interest established from time to time by the Australian Facility Swing Line Lender as its prime rate, which rate may not be the lowest rate of interest charged by the Australian Facility Swing Line Lender to its customers. Any change in the Australian Facility Prime Rate shall be effective on the date of such change in the Australian Facility Prime Rate. "AUSTRALIAN FACILITY SWING LINE" means the revolving line of credit established by the Australian Facility Swing Line Lender in favor of the Australian Facility Borrowers pursuant to SECTION 5.13. "AUSTRALIAN FACILITY SWING LINE LENDER" means Bank One, NA, Australia Branch, in its capacity as lender to the Australian Facility Borrowers pursuant to SECTION 5.13. "AUSTRALIAN FACILITY SWING LINE LOANS" means loans made by the Australian Facility Swing Line Lender to the Australian Facility Borrowers pursuant to SECTION 5.13. "AUSTRALIAN FACILITY SWING LINE OUTSTANDINGS" means, as of any date of determination, the aggregate principal Australian Dollar Equivalent Amount of all Australian Facility Swing Line Loans then outstanding. "AUTHORIZED REPRESENTATIVE" means in the case of each of the Company and the US Facility Borrower, the UK Facility Borrowers, the Canadian Facility Borrower and the Australian Facility Borrowers, any of those persons listed as such on SCHEDULE 1.01(A) attached hereto, or any other person expressly designated by the Board of Directors (or the appropriate committee thereof) of the Company as an Authorized Representative for purposes of this Agreement, as set forth from time to time in a certificate in the form attached hereto as EXHIBIT C. "BANK OF AMERICA" means Bank of America, N.A., a national banking association. "BANK GUARANTEE" means (a) a guarantee of payment issued by the Applicable Bank Guarantee Issuer pursuant to ARTICLE IIIA hereof for the account of a UK Facility Borrower in favor of a Person advancing credit or securing an obligation on behalf of such UK Facility Borrower or any of its Subsidiaries and (b) the Existing Bank Guarantees. 13 20 "BANK GUARANTEE CASH ACCOUNT AGREEMENT" means the Bank Guarantee Cash Account Agreement in substantially the form of EXHIBIT I dated as of the date hereof between the UK Facility Borrowers and the UK Facility Agent, as amended, modified or supplemented from time to time. "BANK GUARANTEE COMMITMENT" means, with respect to each UK Facility Lender, the obligation of such UK Facility Lender to acquire Participations in respect of Bank Guarantees and Reimbursement Obligations up to an aggregate amount at any one time outstanding equal to such UK Facility Lender's Applicable Fronting Percentage of the Total Bank Guarantee Commitment as the same may be increased or decreased from time to time pursuant to this Agreement. "BANK GUARANTEE FACILITY" means the facility described in ARTICLE IIIA hereof providing for the issuance by the Applicable Bank Guarantee Issuer for the account of a UK Facility Borrower of Bank Guarantees in an aggregate amount at any time outstanding not to exceed the Total Bank Guarantee Commitment minus outstanding Reimbursement Obligations arising from Bank Guarantees. "BANK GUARANTEE ISSUER" means Bank One, NA, London Branch or Barclays Bank Plc, as the case may be, as issuer of Bank Guarantees under ARTICLE IIIA and any successor thereto. "BANK GUARANTEE ISSUANCE AGREEMENTS" means, collectively, the applications for bank guarantee and/or similar documentation the Applicable Bank Guarantee Issuer shall require from time to time, executed by a UK Facility Borrower from time to time and delivered to the Applicable Bank Guarantee Issuer to support the issuance of Bank Guarantees. "BANK GUARANTEE OUTSTANDINGS" means, as of any date of determination, the aggregate Sterling Equivalent Amount of all Bank Guarantees plus the Sterling Equivalent Amount of all Reimbursement Obligations then outstanding arising from Bank Guarantees. "BANK ONE CANADA" means Bank One Canada, a bank under the Bank Act (Canada). "BASL" shall have the meaning therefor set forth in the introduction hereto. "BOARD" means the Board of Governors of the Federal Reserve System (or any successor body). "BORROWING NOTICE" means the request of the Authorized Representative of a Borrower to obtain an Advance or to elect a subsequent Interest Period for or Convert a Loan or Loans of any Type hereunder, as the obtaining of such Advance, such election or Conversion of such Loan or Loans shall be otherwise permitted herein. Any Borrowing Notice shall be binding on and irrevocable by a Borrower and shall be in writing and signed by the Authorized Representative of such Borrower in the form attached hereto as EXHIBIT D-1 for US Facility Loans, EXHIBIT D-2 for UK Facility Loans, EXHIBIT D-3 for Canadian Facility Loans, EXHIBIT D-4 for Australian 14 21 Facility Loans with EXHIBIT D-5 specifically for Australian Facility Swing Line Loans, as the case may be. "BRITISH POUNDS STERLING" and "GBP" means the lawful currency of the United Kingdom of Great Britain and Northern Ireland and is subject to SECTION 6.09. "BRITISH POUNDS STERLING FRONTING COMMITMENT" means, with respect to each UK Facility Lender, at any date of determination, the obligation of such Lender to make UK Facility Loans in British Pounds Sterling to the UK Facility Borrowers and the obligation of such Lender to purchase Participations in Bank Guarantees on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Percentage for the UK Facility multiplied by the Total British Pounds Sterling Commitment as of such date, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement. "BRITISH POUNDS STERLING OUTSTANDINGS" means, at any date of determination, that portion of the UK Facility Outstandings representing the aggregate principal amount of the sum of all UK Facility Loans outstanding in British Pounds Sterling and the Bank Guarantee Outstandings. "BUSINESS DAY" means (i) with respect to all notices, determinations, fundings and payments in connection with US Facility Loans or Letters of Credit or not related to any particular Facility, or with respect to all notices, determinations, fundings and payments involving the Global Agent, any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the States of New York or Ohio or is a day on which banking institutions located in either such state are authorized or required by law or other governmental action to close, (ii) with respect to all notices, determinations, fundings and payments in connection with UK Facility Loans and all Bank Guarantees, any day on which banking institutions located in England are generally open for business, and which is a day on which dealings in the Applicable Currency are carried on, and with respect to notices, determinations, fundings and payments in or pertaining to euro, any day on which TARGET (Trans-European Automated Real-time gross settlement Express Transfer system) or any successor thereto is scheduled to be open for business; (iii) with respect to all notices, determinations, fundings and payments in connection with Canadian Facility Loans, any day, other than a Saturday, Sunday or other day on which commercial banks in New York City or San Francisco and in Toronto, Canada are authorized or required by law to close; (iv) with respect to all notices, determinations, fundings and payments in connection with Australian Facility Loans, any day, excluding Saturday, Sunday and any day which is a legal holiday under the laws of the Province of New South Wales, Australia or is a day on which banking institutions located in such Province are authorized or required by law or other governmental action to close, which is a day on which dealings in the Applicable Currency are carried on and on which commercial banks are open for business in, and on which dealings in Australian Dollars are carried on in, Hong Kong; and (v) with respect to all notices, determinations, fundings and payments in connection with any Eurodollar Rate Loan or Offshore Rate Loan, any day that is a Business Day described above for the applicable Facility and that is also a day for trading by and between banks in the Applicable Currency in the applicable interbank Eurodollar Rate market or Offshore Rate market, as applicable. 15 22 "CANADIAN DOLLARS" or "CAN $" means the lawful currency of Canada. "CANADIAN FACILITY" means the facility described in ARTICLE IV hereof providing for Loans to the Canadian Facility Borrower by the Canadian Facility Lenders in the aggregate principal amount of the Total Canadian Facility Commitment. "CANADIAN FACILITY ADVANCE" means a borrowing under the Canadian Facility Full Maturity Tranche or the Canadian Facility Renewable Tranche consisting of the aggregate principal amount of a Canadian Facility Base Rate Loan or Canadian Facility BA Rate Loan, as the case may be. "CANADIAN FACILITY AGENT" shall have the meaning therefor set forth in the introduction hereto. "CANADIAN FACILITY BA RATE" means, for any Interest Period for a Canadian Facility BA Rate Loan, the rate of interest per annum (rounded upwards, if necessary, to the next higher 1/100 of 1%) equal to the market bid rate determined by the Canadian Facility Agent for banker's acceptances (with a tenor comparable to such Interest Period and in an amount comparable to the Canadian Facility BA Rate Loan of the Canadian Facility Agent for such Interest Period) accepted by the Canadian Facility Agent on the first day of such Interest Period. "CANADIAN FACILITY BA RATE LOAN" means a Canadian Facility Loan for which the rate of interest is determined by reference to the Canadian Facility Fixed BA Rate. "CANADIAN FACILITY BASE RATE" means, for any day, for Canadian Facility Loans made by Canadian Facilities Lenders, the higher of (i) 0.50% per annum above the average 30 day bankers' acceptance rate as quoted on Reuters Service Page CDOR determined at 10:00 A.M. (Toronto, Canada time) on such day and (ii) that annual rate of interest designated by the Canadian Facility Agent as its "prime rate" and established and announced by the Canadian Facility Agent from time to time at its offices in Toronto, Canada as the reference rate for demand loans in Canadian Dollars made in Canada (the "prime rate" and other rates referred to above are rates set by the Canadian Facility Agent based upon various factors including the Canadian Facility Agent's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such announced rate). Any change in the reference rate announced by the Canadian Facility Agent shall take effect at the opening of business on the day specified in the public announcement of such change. "CANADIAN FACILITY BASE RATE LOAN" means a Canadian Facility Loan for which the rate of interest is determined by reference to the Canadian Facility Base Rate. "CANADIAN FACILITY BORROWER" shall have the meaning therefor set forth in the introduction hereto. 16 23 "CANADIAN FACILITY COMMITMENT" means, with respect to any Lender, such Lender's Applicable Facility Commitment for the Canadian Facility. "CANADIAN FACILITY FIXED BA RATE" means, for any Interest Period for any Canadian Facility BA Rate Loan, the rate of interest per annum equal to the sum of the BA Rate for such Loan plus the Applicable Margin. "CANADIAN FACILITY FRONTING COMMITMENT" means, with respect to each Canadian Facility Lender, the sum of its Canadian Facility Renewable Tranche Fronting Commitment and its Canadian Facility Full Maturity Tranche Fronting Commitment. "CANADIAN FACILITY FULL MATURITY TRANCHE" means the facility described in ARTICLE IV hereof providing for Canadian Facility Loans to the Canadian Facility Borrower by the Canadian Facility Lenders from the Closing Date until the Total Facility Termination Date in the aggregate principal amount of the Canadian Facility Full Maturity Tranche Commitment. "CANADIAN FACILITY FULL MATURITY TRANCHE COMMITMENT" means that portion of the Total Canadian Facility Commitment providing for Canadian Facility Loans to the Canadian Facility Borrower by the Canadian Facility Lenders in the aggregate principal amount equal to CAN $52, 500,000. "CANADIAN FACILITY FULL MATURITY TRANCHE OUTSTANDINGS" means, at any date of determination, that portion of the Canadian Facility Outstandings representing the aggregate principal amount of all Canadian Facility Loans outstanding under the Canadian Facility Full Maturity Tranche. "CANADIAN FACILITY FULL MATURITY TRANCHE FRONTING COMMITMENT" means, with respect to each Canadian Facility Lender, the obligation of such Lender to make or Continue Canadian Facility Loans to the Canadian Facility Borrower on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Commitment for the Canadian Facility multiplied by the Canadian Facility Full Maturity Tranche Commitment, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement. "CANADIAN FACILITY LENDERS" means those Lenders identified in the introduction hereto with respect to their making Canadian Facility Loans on behalf of all the Lenders. "CANADIAN FACILITY LOANS" means any borrowing pursuant to a Canadian Facility Advance under the Canadian Facility in accordance with the terms of SECTION 4.01 or 4.13. "CANADIAN FACILITY OUTSTANDINGS" means, at any date of determination, the aggregate principal amount of all Canadian Facility Loans then outstanding. "CANADIAN FACILITY RENEWABLE TRANCHE" means the facility described in ARTICLE IV hereof providing for Canadian Facility Loans to the Canadian Facility Borrower by the Canadian Facility Lenders from the Closing Date until the Canadian Facility Renewable Tranche 17 24 Termination Date in the aggregate principal amount of the Canadian Facility Renewable Tranche Commitment. "CANADIAN FACILITY RENEWABLE TRANCHE COMMITMENT" means that portion of the Total Canadian Facility Commitment providing for Canadian Facility Loans to the Canadian Facility Borrower by the Canadian Facility Lenders in the aggregate principal amount equal to (i) as of the Closing Date, CAN $52,500,000, and (ii) as of any subsequent date of determination thereof, such amount set forth in (i) above as the same may be reduced from time to time pursuant to SECTION 4.12 hereof. "CANADIAN FACILITY RENEWABLE TRANCHE EXTENSION DATE" means August 2, 2001 and each date thereafter to which the Canadian Facility Renewable Tranche Termination Date has been extended, if any, pursuant to SECTION 4.12 hereof, but in no event later than the Total Facility Termination Date. "CANADIAN FACILITY RENEWABLE TRANCHE FRONTING COMMITMENT" means, with respect to each Canadian Facility Lender, the obligation of such Lender to make or Continue Canadian Facility Loans to the Canadian Facility Borrower on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Commitment for the Canadian Facility multiplied by the Canadian Facility Renewable Tranche Commitment, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement. "CANADIAN FACILITY RENEWABLE TRANCHE OUTSTANDINGS" means, at any date of determination, that portion of the Canadian Facility Outstandings representing the aggregate principal amount of all Canadian Facility Loans outstanding under the Canadian Facility Renewable Tranche. "CANADIAN FACILITY RENEWABLE TRANCHE TERMINATION DATE" means the earlier of (i) August 2, 2001, or such later date as the Canadian Facility Borrower and the Lenders shall agree in writing pursuant to SECTION 4.12 hereof, or (ii) the Total Facility Termination Date. "CANADIAN FACILITY TERM LOAN" shall have the meaning therefor-set forth in SECTION 4.13. "CANADIAN FACILITY TERM LOAN FACILITY" means the facility described in SECTION 4.13 hereof providing for the conversion of Canadian Facility Renewable Tranche Outstandings on each Canadian Facility Renewable Tranche Extension Date to Canadian Facility Term Loans. "CANADIAN FACILITY TERM LOAN OUTSTANDINGS" means, at any date of determination, that portion of the Canadian Facility Outstandings representing the aggregate principal amount of all Canadian Facility Loans outstanding under the Canadian Term Loan Facility. "CANADIAN FACILITY TERM LOAN TERMINATION DATE" means the earlier to occur of (i) August 3, 2003 and (ii) the Total Facility Termination Date. 18 25 "CANADIAN OVERNIGHT RATE" means the rate of interest per annum determined by the Canadian Facility Agent at its head office in Toronto, Canada from time to time at which overnight deposits in Canadian Dollars, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by the Canadian Facility Agent to major banks in the Canadian interbank market. The Canadian Overnight Rate for any day which is not a Business Day shall be the Canadian Overnight Rate for the preceding Business Day. "CAPITAL LEASES" means all leases which have been or should be capitalized in accordance with Generally Accepted Accounting Principles as in effect from time to time including Statement No. 13 of the Financial Accounting Standards Board and any successor thereof. "CHANGE OF CONTROL" means, at any time: (A) with respect to the Company: (i) any "person" or "group" (each as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) either (A) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of Voting Stock of the Company (or securities convertible into or exchangeable for such Voting Stock) representing 20% or more of the combined voting power of all Voting Stock of the Company (on a fully diluted basis) or (B) otherwise has the ability, directly or indirectly, to elect a majority of the board of directors of the Company; or (ii) during any period of up to 24 consecutive months, commencing on the Closing Date, individuals who at the beginning of such 24-month period were directors of the Company shall cease for any reason (other than the death, disability or retirement) to constitute a majority of the board of directors of the Company; and (B) with respect to any Borrower other than the Company, such Borrower ceases for any reason to be a wholly owned Subsidiary of the Company. "CLOSING DATE" means the date as of which this Agreement is executed by the Borrowers, the Lenders and the Agents and on which the conditions set forth in SECTION 7.01 hereof have been satisfied. "CODE" means the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder. "COMMITMENT" means, for any Lender, any of the Australian Facility Commitment, Canadian Facility Commitment, UK Facility Commitment, the Bank Guarantee Commitment, US Facility Commitment and the Letter of Credit Commitment, as applicable. "COMPANY" shall have the meaning therefor set forth in the introduction hereto. 19 26 "CONSISTENT BASIS" in reference to the application of Generally Accepted Accounting Principles means the accounting principles observed in the period referred to are comparable in all material respects to those applied in the preparation of the audited financial statements of the Company referred to in SECTION 8.02(B)(I) hereof. "CONSOLIDATED EBIT" means, with respect to the Company and its Subsidiaries for the Four-Quarter Period ended on or immediately preceding the date of computation thereof, the sum of, without duplication, (i) Consolidated Net Income during such period, plus (ii) for any Four-Quarter Period that includes the first fiscal quarter of Fiscal Year 2001, $21,100,000 related to the change in accounting treatment for seasonal sales, plus (iii) for any Four-Quarter Period that includes the fourth fiscal quarter of Fiscal Year 2001, $32,600,000 related to the write-down of the Company's investment in Egreetings Network, Inc., plus (iv) to the extent any of the following reduce Consolidated Net Income during any Four-Quarter Period that includes the fiscal quarter such charges are recorded, the following pre-tax charges if they are recorded prior to the end of the Fiscal Year 2002: (a) up to $18,000,000 related to changes in contractual relationships with strategic partners of the Company's internet business, (b) up to $75,000,000 related to the implementation of scan-based trading at select retailers, and (c) up to $210,000,000 related to corporate restructuring charges; plus (v) Consolidated Interest Expense during such period, plus (vi) taxes paid on income during such period, all determined on a consolidated basis in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. "CONSOLIDATED FUNDED INDEBTEDNESS" means all Indebtedness for Money Borrowed of the Company and its Subsidiaries, all determined on a consolidated basis in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. "CONSOLIDATED INTEREST EXPENSE" means, with respect to any period of computation thereof, the gross interest expense of the Company and its Subsidiaries, including without limitation (i) the amortization of debt discounts, (ii) the amortization of all reserves and fees payable in connection with the incurrence of Indebtedness to the extent included in interest expense, (iii) the portion of any liabilities incurred in connection with Capital Leases allocable to interest expense, and (iv) the portion of financing expenses incurred in connection with Permitted Asset Securitizations allocable to interest expense, all determined on a consolidated basis in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. "CONSOLIDATED NET INCOME" means, with respect to any period of computation thereof, the gross revenues of the Company and its Subsidiaries less all operating and non-operating expenses thereof including taxes on income, all determined on a consolidated basis in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis; but excluding as revenue: (i) gains on the sale, conversion or other disposition of capital assets, (ii) gains on the acquisition, retirement, sale or other disposition of capital stock and other securities of the Company or any Subsidiary, (iii) gains on the collection of proceeds of life insurance policies, (iv) any write-up of any asset, and (v) any other gain or credit of an extraordinary nature as determined on a consolidated basis in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. 20 27 "CONSOLIDATED SHAREHOLDERS' EQUITY" means, at any time as of which the amount thereof is to be determined, the sum of the following in respect of the Company and its Subsidiaries (determined on a consolidated basis and excluding intercompany items among the Company and its Subsidiaries and any upward adjustment after the Closing Date due to revaluation of assets): (i) the amount of issued and outstanding share capital, plus (ii) the amount of additional paid-in capital and retained income (or, in the case of a deficit, minus the amount of such deficit), plus (iii) the amount of any foreign currency translation adjustment (if positive, or, if negative, minus the amount of such translation adjustment) minus (iv) the absolute value of any treasury stock, all determined on a consolidated basis in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. "CONSOLIDATED TOTAL ASSETS" means, as of any date on which the amount thereof is to be determined, the net book value of all assets of the Company and its Subsidiaries as determined on a consolidated basis in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. "CONSOLIDATED TOTAL CAPITALIZATION" means the sum of Consolidated Shareholders' Equity and Consolidated Funded Indebtedness. "CONTINGENT OBLIGATION" of any Person means all contingent liabilities required (or which, upon the creation or incurring thereof, would be required) to be included in the consolidated financial statements (including footnotes) of such Person in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis, including Statement No. 5 of the Financial Accounting Standards Board, and any obligation of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including obligations of such Person however incurred: (1) to purchase such Indebtedness or other obligation or any property or assets constituting security therefor; (2) to advance or supply funds in any manner (i) for the purchase or payment of such Indebtedness or other obligation, or (ii) to maintain a minimum working capital, net worth or other balance sheet condition or any income statement condition of the primary obligor; (3) to grant or convey any lien, security interest, pledge, charge or other encumbrance on any property or assets of such Person to secure payment of such Indebtedness or other obligation; (4) to lease property or to purchase securities or other property or services primarily for the purpose of assuring the owner or holder of such Indebtedness or obligation of the ability of the primary obligor to make payment of such Indebtedness or other obligation; or 21 28 (5) otherwise to assure the owner of the Indebtedness or such obligation of the primary obligor against loss in respect thereof. With respect to Contingent Obligations (such as litigation, guarantees and pension plan liabilities), such liabilities shall be computed at the amount which, in light of all the facts and circumstances existing at the time, represent the amount which can reasonably be expected to become an actual or matured liability. "CONTINUE", "CONTINUATION", "CONTINUANCE" and "CONTINUED" shall refer to the continuation pursuant to SECTIONS 2.08, 3.08, 4.08 or 5.08 hereof of a Fixed Rate Loan from one Interest Period to the next Interest Period. "CONVERT", "CONVERSION" and "CONVERTED" shall refer to a conversion pursuant to SECTIONS 2.08, 3.08, 4.08 or 5.08 or ARTICLE VI of one Type of Loan into another Type of Loan. "CREDIT EXPOSURE" means, with respect to any Lender, the aggregate principal amount of all outstanding Loans, Letters of Credit, Bank Guarantees and Reimbursement Obligations under the Total Facilities owing to or issued by such Lender, to the extent no other Lender has funded and paid for a Participation in such Loans, Letters of Credit, Bank Guarantees or Reimbursement Obligations, plus all Participations funded and paid for by such Lender in all other Loans, Letters of Credit, Bank Guarantees and Reimbursement Obligations under the Total Facilities, and "Aggregate Credit Exposure" means the sum of all Credit Exposures of all Lenders in the Total Facilities. "DEBT OFFERING" means the incurrence of any Indebtedness for Money Borrowed permitted hereunder in connection with a public offering or private placement of debt securities of the Company or any Subsidiary (other than debt securities issued to the Company) or otherwise. "DEBT RATING" shall have the meaning therefor set forth in the definition of "Applicable Margin." "DEBT RATING DATE" shall have the meaning therefor set forth in the definition of "Applicable Margin." "DEFAULT" means any event or condition which, with the giving or receipt of notice or lapse of time or both, would constitute an Event of Default hereunder. "DEFAULT RATE" means (i) with respect to each Eurodollar Rate Loan, each Offshore Rate Loan and each Canadian Facility BA Rate Loan, until the end of the Interest Period applicable thereto, a rate of two percent (2%) above the Eurodollar Rate, Offshore Rate or Canadian Facility Fixed BA Rate applicable to such Loan, and thereafter at a rate of interest per annum which shall be two percent (2%) above (A) in the case of US Facility Loans, Canadian Facility Loans or Australian Facility Loans, the Applicable Base Rate, and (B) in the case of UK Facility Loans, the Offshore Rate determined based on successive Interest Periods of one (1) month each; 22 29 and (ii) with respect to each Applicable Base Rate Loan and Reimbursement Obligation, at a rate of interest per annum which shall be two percent (2%) above the Applicable Base Rate. "ELIGIBLE ASSIGNEE" with respect to a specific Facility means (i) a Lender currently in such Facility; (ii) any other Lender, or an affiliate of any Lender, which, through its Applicable Lending Office, is capable of lending the Applicable Currency to the Applicable Borrowers without the imposition of any withholding or similar taxes; and (iii) any other Person which has and maintains an Investment Grade Rating and which, through its Applicable Lending Office, is capable of lending the Applicable Currency to the Applicable Borrowers without the imposition of any withholding or similar taxes and which is approved by the Applicable Facility Agent, the Global Agent, with respect to the US Facility, the Issuing Bank, with respect to the Australian Facility, the Australian Facility Swing Line Lender, and with respect to the Bank Guarantee Facility, the Bank Guarantee Issuers, and, unless an Event of Default has occurred and is continuing at the time any assignment is effected in accordance with SECTION 13.01, the Company, such approval not to be unreasonably withheld or delayed by the Company, the Applicable Facility Agent, the Global Agent, the Issuing Bank, the Australian Facility Swing Line Lender or the Bank Guarantee Issuers and such approval to be deemed given by the Company if no objection is received by the assigning Lender, the Applicable Facility Agent, the Global Agent, the Issuing Bank, the Australian Facility Swing Line Lender or the Bank Guarantee Issuers from the Company within two (2) Business Days after notice of such proposed assignment has been provided by the assigning Lender to the Company; provided, however, that neither the Company nor an affiliate of the Company shall qualify as an Eligible Assignee; provided further, however, that the Company may withhold approval hereunder in its sole discretion if such assignment would give rise to the payment of any additional costs under ARTICLE VI. "EMPLOYEE BENEFIT PLAN" means (i) any employee benefit plan, including any Pension Plan, within the meaning of Section 3(3) of ERISA which (A) is maintained for employees of the Company, any of its ERISA Affiliates or any Subsidiary, (B) is assumed by the Company, any of its ERISA Affiliates or any Subsidiary, in connection with any acquisition of another Person or (C) has at any time been maintained for the employees of the Company, or any current or former ERISA Affiliate or any Subsidiary, or (ii) any plan, arrangement, understanding or scheme maintained by the Company or any Subsidiary that provides retirement, deferred compensation, employee or retiree medical or life insurance, severance benefits or any other benefit covering any employee or former employee and which is administered under any Foreign Benefit Law or regulated by any Governmental Authority other than the United States of America. "EMU LEGISLATION" means (a) a Treaty on European Union (the Treaty of Rome of March 25, 1957, as amended by the Single European Act 1986 and the Maastricht Treaty (which was signed at Maastricht on February 1, 1992 and came into force on November 1, 1993)), and (b) legislative measures of the European Council (including without limitation European Council regulations) for the introduction of, changeover to or operation of the euro, in each case as amended or supplemented from time to time. "ENVIRONMENTAL LAWS" means, collectively, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Superfund Amendments and 23 30 Reauthorization Act of 1986, the Resource Conservation and Recovery Act, the Toxic Substances Control Act, as amended, the Clean Air Act, as amended, the Clean Water Act, as amended, any other "Superfund" or "Superlien" law or any other federal or applicable state, local or foreign statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in effect. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute and all rules and regulations promulgated thereunder. "ERISA AFFILIATE", as applied to the Company, means any Person or trade or business which is a member of a group which is under common control with the Company, who, together with the Company, is treated as a single employer within the meaning of Section 414(b), (c), (m) or (o) of the Code. "EURO" means the single official non-legacy currency denominated as the euro and constituting legal tender for the payment of public and private debts in the Participating Member States. "EURODOLLAR RATE" means, for the Interest Period for any Eurodollar Rate Loan, the rate of interest per annum determined pursuant to the following formula: Eurodollar = Applicable Reference Rate + Applicable Rate -------------------------------------- Margin 1 - Applicable Reserve Requirement "EURODOLLAR RATE LOAN" means a US Facility Loan for which the rate of interest is determined by reference to the Eurodollar Rate. "EURO EQUIVALENT AMOUNT" means, with respect to a specified amount of British Pounds Sterling, the amount of euro into which such amount of British Pounds Sterling would be converted, based on the applicable Spot Rate of Exchange. "EURO OUTSTANDINGS" means, at any date of determination, that portion of the UK Facility Outstandings representing the Sterling Equivalent Amount of the aggregate principal amount of all UK Facility Loans outstanding in euro under the UK Facility Alternative Currency Tranche. "EVENT OF DEFAULT" means any of the occurrences set forth as such in SECTION 11.01 hereof and the expiration of any applicable notice or cure period. "EXISTING BANK GUARANTEES" means the bank guarantees described on SCHEDULE 1.01(c). "EXISTING LETTERS OF CREDIT" means the letters of credit described on SCHEDULE 1.01(b). 24 31 "FACILITY" means any of the US Facility, UK Facility, Canadian Facility and Australian Facility, as the context may require. "FACILITY CREDIT EXPOSURE" means, with respect to any Lender and any Facility, the aggregate principal amount of all outstanding Loans, Letters of Credit, Bank Guarantees and Reimbursement Obligations under such Facility owing to or issued by such Lender, to the extent no other Lender has funded and paid for a Participation in such Loans, Letters of Credit, Bank Guarantees or Reimbursement Obligations, plus all Participations funded and paid for by such Lender in all other Loans, Letters of Credit, Bank Guarantees` and Reimbursement Obligations under such Facility, and "Aggregate Facility Credit Exposure" means the sum of all Facility Credit Exposures of all Lenders in a specific Facility. "FACILITY FEE" means that fee set forth in SECTIONS 2.09, 3.09, 4.09 and 5.09, respectively, payable in US Dollars for each separate Facility. "FACILITY PARTICIPATION AMOUNT" means, with respect to a Lender and a specific Facility, that amount of Participations of such Lender in such Facility as defined in SECTIONS 2.14, 3.13, 4.14 and 5.14, respectively. "FACILITY PARTICIPATION PAYMENT DATE" shall have the meaning therefor set forth in SECTION 11.07. "FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to the Applicable Facility Agent (in its individual capacity) on such day on such transactions as determined by the Applicable Facility Agent. "FISCAL YEAR" means the 12 month period of the Company commencing on March 1 of each calendar year and ending on the last day of February of the immediately following calendar year. "FIXED RATE LOAN" means any or all, as the context may require, of Eurodollar Rate Loans, Offshore Rate Loans and Canadian Facility BA Rate Loans. "FLOATING RATE LOAN" means any one or more, as the context may require, of US Facility Base Rate Loans, Canadian Facility Base Rate Loans, UK Facility Base Rate Loans, Australian Facility Base Rate Loans and Australian Facility Prime Rate Loans. "FOREIGN BENEFIT LAW" means any applicable statute, law, ordinance, code, rule, regulation, order or decree of any foreign nation or any province, state, territory, protectorate or 25 32 other political subdivision thereof regulating, relating to, or imposing liability or standards of conduct concerning any pension, retirement, health care, death, disability or other employee benefit plan. "FOUR-QUARTER PERIOD" means a period of four full consecutive fiscal quarters of the Company and its Subsidiaries, taken together as one accounting period. "FRENCH FRANCS" means the official legacy currency of the Republic of France and is subject to SECTION 6.09. "FRENCH FRANC EQUIVALENT AMOUNT" means, with respect to a specified amount of British Pounds Sterling, the amount of French Francs into which such amount of British Pounds Sterling would be converted, based on the applicable Spot Rate of Exchange. "FRENCH FRANC OUTSTANDINGS" means, at any date of determination, that portion of the UK Facility Outstandings representing the Sterling Equivalent Amount of the aggregate principal amount of all UK Facility Loans outstanding in French Francs under the UK Facility Alternative Currency Tranche. "FUNDING BANK" means, (a) with respect to the UK Facility, (i) any banking institution located within France that is approved by the UK Facility Agent and is capable of making UK Facility Advances in French Francs to the UK Facility Borrowers, or (ii) any banking institution located within France that is approved by the UK Facility Agent and is capable of making UK Facility Advances in euro to the UK Facility Borrowers, and (b) with respect to the Letter of Credit Facility, any banking institution (which may include any Lender) approved by the Issuing Bank located in the country whose currency has been approved as a Letter of Credit Currency. "FURTHER TAXES" means any and all present or future taxes, levies, assessments, imposts, duties, deductions, fees, withholdings or similar charges (including, without limitation, net income taxes and franchise taxes), and all liabilities with respect thereto, imposed by any jurisdiction on account of amounts payable or paid pursuant to SECTION 6.06. "GAAP" or "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means those generally accepted principles of accounting set forth in pronouncements of the Financial Accounting Standards Board, the Accounting Principles Board or the American Institute of Certified Public Accountants or which have other substantial authoritative support and are applicable in the circumstances as of the date of a report, as such principles are from time to time supplemented and amended, subject to compliance at all times with SECTION 1.02 hereof. "GLOBAL AGENT" shall have the meaning therefor set forth in the introduction hereto. "GLOBAL CO-SYNDICATION AGENT" shall have the meaning therefor set forth in the introduction hereto. "GOVERNMENTAL AUTHORITY" means any federal, state, municipal, national or other governmental department, commission, board, bureau, court, agency or instrumentality or 26 33 political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a state of the United States, the United States, or a foreign entity or government. "GUARANTOR" means the Company in its capacity as a party to the Guaranty. "GUARANTY" means the unconditional Second Amended and Restated Guaranty Agreement in favor of the Lenders in substantially the form attached hereto as EXHIBIT E delivered to the Global Agent in accordance with ARTICLE VII hereof pursuant to which the Guarantor guarantees the payment and performance of all Obligations to the Lenders as more specifically set forth in such Guaranty. "HAZARDOUS MATERIAL" means and includes any hazardous, toxic or dangerous waste, substance or material, the generation, handling, storage, disposal, treatment or emission of which is subject to any Environmental Law in effect on any date. "HEDGING OBLIGATIONS" means any and all obligations of the Company and its Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all agreements, devices or arrangements designed to protect at least one of the parties thereto from the fluctuations of interest rates, exchange rates or forward rates applicable to such party's assets, liabilities or exchange transactions, including, but not limited to, dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts, warrants and those commonly known as interest rate "swap" agreements; and (b) any and all cancellations, buybacks, reversals, terminations or assignments of any of the foregoing. "HONG KONG DOLLARS" or "HK $" means the lawful currency of Hong Kong. "INDEBTEDNESS" means, with respect to any Person, all Indebtedness for Money Borrowed of such Person, all indebtedness of such Person for the acquisition of property, including the deferred purchase price of such property, other than purchases of products and merchandise in the ordinary course of business so long as payment therefor is due within one year, indebtedness secured by any Lien on the property of such Person whether or not such indebted-ness is assumed, all liability of such Person by way of endorsements (other than for collection or deposit in the ordinary course of business); all Contingent Obligations of such Person, including the undrawn face amount of, and unpaid reimbursement obligations in respect of, all letters of credit issued for the account of such Person, obligations occurring under acceptance facilities and Hedging Obligations; all Capital Leases of such Person, and other items which in accordance with Generally Accepted Accounting Principles are classified as liabilities on a balance sheet; provided that in no event shall the term Indebtedness include capital stock, surplus and retained earnings, minority interest in the common stock of Subsidiaries, lease obligations (other than pursuant to Capital Leases), reserves for deferred income taxes and investment credits, other deferred credits and reserves, and deferred compensation obligations. 27 34 "INDEBTEDNESS FOR MONEY BORROWED" means, for any Person, (i) all indebtedness, obligations and liabilities of such Person for money borrowed which are evidenced by bonds, debentures, notes or other similar instruments, (ii) all Capital Leases which have been capitalized in accordance with Generally Accepted Accounting Principles and (iii) all amounts funded (as payment of a purchase price or otherwise) to the Company or any Subsidiary under Permitted Asset Securitizations; provided, however, the term "Indebtedness for Money Borrowed" shall specifically exclude payroll indebtedness and trade indebtedness incurred in the ordinary course of business (including trade indebtedness through financial intermediaries) provided such trade indebtedness has a maturity of less than one year. "INTEREST PERIOD" for each Fixed Rate Loan means a period commencing on the date such Fixed Rate Loan is made, Continued or Converted and each subsequent period commencing on the last day of the immediately preceding Interest Period for such Fixed Rate Loan and ending, at the Applicable Borrower's option, for any Fixed Rate Loan, on the date one, two, three or six months thereafter as notified to the Applicable Facility Agent in compliance with the provisions of such Facility as set forth in ARTICLES II, III, IV and V, respectively, by an Authorized Representative of such Borrower prior to the beginning of such Interest Period; provided, that, (i) if the Authorized Representative of such Borrower fails to notify the Applicable Facility Agent of the length of an Interest Period in compliance with the provisions of such Facility as set forth in Article II, ARTICLE III, ARTICLE IV or ARTICLE V, respectively, the Fixed Rate Loan for which such Interest Period was to be determined shall be deemed to be (A) in the case of a US Facility Loan, Canadian Facility Loan or Australian Facility Loan, an Applicable Base Rate Loan or (B) in the case of a UK Facility Loan, an Offshore Rate Loan with an Interest Period of one month, in each case as of the first day thereof; (ii) if an Interest Period would end on a day which is not a Business Day, such Interest Period shall be extended to the next Business Day (unless such extension would cause the applicable Interest Period to end in the succeeding calendar month, in which case such Interest Period shall end on the next preceding Business Day); (iii) there shall not be more than (A) ten (10) Interest Periods in effect on any day in respect of US Facility Loans, (B) ten (10) Interest Periods in effect on any day in respect of UK Facility Loans, (C) ten (10) Interest Periods in effect on any Canadian Facility Loans and (D) four (4) Interest Periods in effect on any day in respect of Australian Facility Loans; (iv) any Interest Period which 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; (v) no Interest Period shall extend past the Total Facility Termination Date, the US Facility Revolving Credit Termination Date (for US Facility Loans under the US 28 35 Facility Revolving Credit Facility) or the Canadian Facility Renewable Tranche Termination Date (for Canadian Facility Loans under the Canadian Facility Renewable Tranche). "INVESTMENT GRADE RATING" means a rating of BBB or higher from S&P and a rating of Baa2 or higher from Moody's. "ISSUING BANK" means Bank of America as issuer of Letters of Credit under ARTICLE IIA and any successor thereto. "LC ACCOUNT AGREEMENT" means the LC Account Agreement in substantially the form attached hereto as EXHIBIT F dated as of the date hereof between the US Facility Borrower and the US Facility Agent, as amended, modified or supplemented from time to time. "LENDER AFFILIATE" means (i) with respect to the Total Facilities, an affiliate or agent of any Lender, which affiliate or agent is currently in the business of, and capable of, performing the duties of the Global Agent and which is approved to be a successor Global Agent by the Required Lenders under the Total Facilities, the Facility Agents and, unless an Event of Default has occurred and is continuing at the time any assignment is effected in accordance with SECTION 13.01, the Company, such approval not to be unreasonably withheld or delayed by the Company, the Required Lenders under the Total Facilities and the Facility Agents and such approval to be deemed given by the Company if no objection is received by the Required Lenders under the Total Facilities from the Company within two (2) Business Days after request for approval of the Lender Affiliate as successor Global Agent has been provided by the Required Lenders under the Total Facilities to the Company and (ii) with respect to a specific Facility, an affiliate or agent of any Lender currently in such Facility, which affiliate or agent is currently in the business of, and capable of, performing the duties of the Applicable Facility Agent and which is approved to be a successor Applicable Facility Agent by the Global Agent, the Required Lenders under the Applicable Facility and, unless an Event of Default has occurred and is continuing at the time any assignment is effected in accordance with SECTION 13.01, the Company, such approval not to be unreasonably withheld or delayed by the Company, the Required Lenders under the Applicable Facility or the Global Agent and such approval to be deemed given by the Company if no objection is received by the Global Agent from the Company within two (2) Business Days after request for approval of the Lender Affiliate as a successor Applicable Facility Agent has been provided by the Global Agent to the Company; provided, however, that neither the Company nor an affiliate of the Company shall qualify as a Lender Affiliate. "LENDERS" shall have the meaning therefor set forth in the introduction hereto. "LETTER OF CREDIT" means (a) a standby or commercial letter of credit issued by the Issuing Bank pursuant to ARTICLE IIA hereof for the account of the US Facility Borrower in favor of a Person advancing credit or securing an obligation on behalf of the US Facility Borrower or any of its Subsidiaries and (b) the Existing Letters of Credit. "LETTER OF CREDIT COMMITMENT" means, with respect to each US Facility Lender, the obligation of such US Facility Lender to acquire Participations in respect of Letters of Credit and 29 36 Reimbursement Obligations up to an aggregate amount at any one time outstanding equal to such US Facility Lender's Applicable Fronting Percentage of the Total Letter of Credit Commitment as the same may be increased or decreased from time to time pursuant to this Agreement. "LETTER OF CREDIT CURRENCY" means Australian Dollars, US Dollars, Hong Kong Dollars, Singapore Dollars, British Pounds Sterling and any other freely available currency notified to the US Facility Agent and Issuing Bank upon not less than ten (10) Business Days' prior written notice that in the opinion of the Required Lenders, in their sole discretion, is at such time freely traded in the offshore interbank foreign exchange markets and is freely transferable and convertible into US Dollars in the United States currency market. "LETTER OF CREDIT FACILITY" means the facility described in ARTICLE IIA hereof providing for the issuance by the Issuing Bank for the account of the US Facility Borrower of Letters of Credit in an aggregate stated amount at any time outstanding not exceeding the Total Letter of Credit Commitment minus outstanding Reimbursement Obligations arising from Letters of Credit. "LETTER OF CREDIT OUTSTANDINGS" means, as of any date of determination, the aggregate US Dollar Equivalent Amount available to be drawn under all Letters of Credit plus the US Dollar Equivalent Amount of Reimbursement Obligations then outstanding. "LIBOR" means, for any date of determination with respect to any Interest Period for an Offshore Rate Loan made under the UK Facility, (i) the rate per annum equal to the rate determined by the UK Facility Agent to be the offered rate which appears on the page of the Telerate Screen which displays an average British Bankers Association Interest Settlement Rate (such page currently being page number 3740 or 3750) for deposits (for delivery on the first day of such period) with a term equivalent to such period in the Applicable Currency, determined as of approximately 11:00 A.M. (London, England time) on such date of determination, or (ii) in the event the rate referenced in the preceding clause (i) does not appear on such page or service or if such page or service shall cease to be available, the rate per annum equal to the rate determined by the UK Facility Agent to be the offered rate on such other page or other service which displays an average British Bankers Association Interest Settlement Rate for deposits (for delivery on the first day of such period) with a term equivalent to such period in the Applicable Currency, determined as of approximately 11:00 A.M. (London, England time) on such date of determination, or (iii) in the event the rates referenced in the preceding clauses (i) and (ii) are not available, the rate per annum equal to the offered quotation rate to first class banks in the London interbank market by Bank of America, N.A. for deposits (for delivery on the first day of the relevant period) in the Applicable Currency of amounts in Same Day Funds comparable to the principal amount of the UK Facility Loan of such UK Facility Agent for which LIBOR is then being determined with maturities comparable to such period as of approximately 11:00 A.M. (London, England time) on such date of determination. "LIEN" means any interest in property securing any obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on the common law, statute or contract, and including but not limited to the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes. 30 37 "LOAN" or "LOANS" means any of the Fixed Rate Loans or Floating Rate Loans, as the context may require. "LOAN DOCUMENTS" means this Agreement, the Notes, the Guaranty, the LC Account Agreement, the Bank Guarantee Cash Account Agreement and all other instruments and documents heretofore or hereafter executed or delivered to and in favor of any Lenders or any Agents or the Issuing Bank or the Bank Guarantee Issuer in connection with the Loans made, and Letters of Credit and Bank Guarantees issued, under this Agreement, as the same may be amended, modified or supplemented from time to time. "LOAN PARTIES" means, collectively, each Borrower and the Guarantor. "MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the business, assets, operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries on a consolidated basis or (ii) the ability of any of the Loan Parties to perform their obligations and pay all amounts due hereunder or (iii) the ability of any Agent or any Lender to enforce any of their rights or to collect any of the Outstandings then due and payable. "MOODY'S" means Moody's Investors Services, Inc. "MULTIEMPLOYER PLAN" means an employee pension benefit plan covered by Title IV of ERISA and in respect of which the Company or any Subsidiary is an "employer" as described in Section 4001(b) of ERISA, which is also a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "NATIONAL CITY BANK" means National City Bank, a national banking association. "NET PROCEEDS" (a) from any Debt Offering means cash payments received by the Company or any Subsidiary therefrom as and when received, net of (i) all legal, accounting, banking and underwriting fees and expenses, commissions, discounts and other issuance expenses incurred in connection therewith and (ii) all taxes required to be paid or accrued as a consequence of such issuance; and (b) from any Asset Disposition or Permitted Asset Securitization means cash payments received by the Company or any Subsidiary therefrom (including any cash payments received pursuant to any note or other debt security received in connection with any Asset Disposition or Permitted Asset Securitization) as and when received, net of (i) all legal fees and expenses and other fees and expenses paid to third parties and incurred in connection therewith, (ii) all taxes required to be paid or accrued as a consequence of such disposition, and (iii) all amounts applied to repayment of Indebtedness (other than the Obligations) secured by a Lien on the asset or property disposed. "NEW ZEALAND BANK BILL REFERENCE RATE" means (i) for any date of determination with respect to any Interest Period for an Offshore Rate Loan made in New Zealand Dollars under the Australian Facility, (a) the rate (expressed as a percentage yield per annum to maturity) determined by the Australian Facility Agent to be the arithmetic mean (rounded upwards, if necessary, to the nearest 0.01%) of the bid rates on the page entitled "BKBM" (or such 31 38 supplemental or other page of the Reuters Monitor System for displaying quotations of New Zealand Bank Bills) on the Reuters Monitor Money Rates Service at or about 10:00 A.M. (Sydney, Australia time) on the first day of such Interest Period for bank accepted bills having a term equal to (or no more than two (2) Business Days shorter or longer than) such Interest Period, or (b) if (x) for any reason there is no average bid rate displayed on the Reuters Monitor System screen page entitled BKBM for bank accepted bills of that term or (y) the basis on which such rates are displayed on the Reuters Monitor System screen page entitled BKBM is changed and in the opinion of Australian Facility Agent those rates cease to reflect the Australian Facility Lenders' cost of funding to the same extent as at the date of this Agreement, then the rate (expressed as a percentage yield per annum to maturity) determined by Australian Facility Agent to be the average of the bid rates quoted to Australian Facility Agent by three banks selected by Australian Facility Agent at or about that time on that day for the purchase of bills accepted by such banks having a face value amount equal to the principal amount of such Australian Facility Loan and a term as described in clause (i)(a) of this definition; provided that such buying rates must be for bills of exchange which are accepted by a bank selected by Australian Facility Agent and which have a term equivalent to the relevant Interest Period; or (ii) for any date of determination for purposes of determining the Australian Facility Base Rate for an Offshore Rate Loan made in New Zealand Dollars under the Australian Facility, or in the event the New Zealand Bank Bill Reference Rate cannot be determined as described in clause (i) of this definition, the rate determined by Australian Facility Agent to be the arithmetic mean (rounded upwards to the nearest 1/16th of one percent) of the rates, as supplied to Australian Facility Agent at its request, quoted by the Australian Facility Lenders to leading banks in the New Zealand interbank market at or about 10:00 A.M. (Sydney, Australia time) on such date for the offering of overnight deposits in New Zealand Dollars. "NEW ZEALAND DOLLAR EQUIVALENT AMOUNT" means, with respect to a specified amount of Australian Dollars, the amount of New Zealand Dollars into which such amount of Australian Dollars would be converted, based on the applicable Spot Rate of Exchange. "NEW ZEALAND DOLLAR FRONTING COMMITMENT" means, with respect to each Australian Facility Lender, the obligation of such Lender to make Australian Facility Loans in New Zealand Dollars to the Australian Facility Borrowers on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of the Lender's Applicable Fronting Percentage for the Australian Facility multiplied by the Total New Zealand Dollar Commitment, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement. "NEW ZEALAND DOLLAR OUTSTANDINGS" means, at any date of determination, that portion of the Australian Facility Outstandings representing the Australian Dollar Equivalent Amount of the aggregate principal amount of all Australian Facility Loans outstanding in New Zealand Dollars under the Australian Facility New Zealand Dollar Tranche. "NEW ZEALAND DOLLARS" or "NZ $" means the lawful currency of New Zealand. "NON-AUSTRALIAN LENDER" shall have the meaning therefor set forth in SECTION 6.06(i). 32 39 "NON-CANADIAN LENDER" shall have the meaning therefor set forth in SECTION 6.06(H). "NOTES" means, collectively, any promissory notes that may be issued by an Applicable Borrower and delivered to an Applicable Lender in a Facility at the request of such Lender. "OBLIGATIONS" means the obligations, liabilities and Indebtedness of the Borrowers with respect to (i) the principal and interest on the Loans as evidenced by the Notes or on the records of the Applicable Facility Agents, (ii) the Reimbursement Obligations, (iii) all liabilities of any Borrower to any Lender or any affiliate of a Lender which arise under a Swap Agreement, and (iv) the payment and performance of all other fees, indemnities, expenses, obligations, liabilities and Indebtedness of the Borrowers to the Lenders or the Agents or the Issuing Bank or the Bank Guarantee Issuers, under this Agreement, under any one or more of the other Loan Documents or with respect to the Loans. "OFFSHORE CURRENCY" means (a) with respect to any Loan, any of British Pounds Sterling, French Francs, euro, Canadian Dollars, Australian Dollars and New Zealand Dollars, and (b) with respect to any Letter of Credit, any Letter of Credit Currency other than US Dollars and (c) with respect to any Bank Guarantee, British Pounds Sterling. "OFFSHORE RATE" means, for the Interest Period for any Offshore Rate Loan, the rate of interest per annum determined pursuant to the following formula: Offshore Rate = Applicable Reference Rate + Applicable Margin "OFFSHORE RATE LOAN" means a UK Facility Loan or Australian Facility Loan for which the rate of interest is determined by reference to the Offshore Rate. "OPERATING DOCUMENTS" means with respect to any corporation, limited liability company, partnership, limited partnership, limited liability partnership or other legally authorized incorporated or unincorporated entity, the bylaws, operating agreement, partnership agreement, limited partnership agreement or other applicable documents relating to the operation, governance or management of such entity. "ORGANIZATIONAL ACTION" means with respect to any corporation, limited liability company, partnership, limited partnership, limited liability partnership or other legally authorized incorporated or unincorporated entity, any corporate, organizational or partnership action (including any required shareholder, member or partner action), or other similar official action, as applicable, taken by such entity. "ORGANIZATIONAL DOCUMENTS" means with respect to any corporation, limited liability company, partnership, limited partnership, limited liability partnership or other legally authorized incorporated or unincorporated entity, the articles of incorporation, certificate of incorporation, articles of organization, certificate of limited partnership or other applicable organizational or charter documents relating to the creation of such entity. 33 40 "OTHER TAXES" means any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, this Agreement or any other Loan Documents. "OUTSTANDINGS" means, collectively, the US Facility Outstandings, the UK Facility Outstandings, the Canadian Facility Outstandings and the Australian Facility Outstandings, and individually any of the foregoing as the context may require. "PARTICIPATING MEMBER STATE" means each country which from time to time becomes a Participating Member State as described in EMU Legislation. "PARTICIPATION" means (a) with respect to any Facility the principal amount purchased and funded by each Lender (other than the Applicable Facility Lenders) in the Loans and Outstandings under such Facility, (b) with respect to the Letter of Credit Facility, the extension of credit represented by the participation of each US Facility Lender (other than the Issuing Bank) in the liability of the Issuing Bank in respect of each Letter of Credit issued by, and each Reimbursement Obligation owing to, the Issuing Bank, (c) with respect to the Bank Guarantee Facility, the extension of credit represented by the participation of each UK Facility Lender (other than the Applicable Bank Guarantee Issuer) in the liability of the Applicable Bank Guarantee Issuer in respect of Bank Guarantees issued by, and each Reimbursement Obligation owing to, the Applicable Bank Guarantee Issuer, and (d) with respect to the Australian Facility Swing Line, the extension of credit represented by the participation of each Australian Facility Lender (other than the Australian Facility Swing Line Lender) in the liability of the Australian Facility Swing Line Lender in respect of Australian Facility Swing Line Loans made by the Australian Facility Swing Line Lender, and in any case in accordance with the terms of SECTIONS 2.14, 2A.02(c), 3.13, 3A.02(c), 4.14, 5.13, 5.14 and 11.07, as applicable, and "Participate" and "Participant" shall have correlative meanings. "PBGC" means the Pension Benefit Guaranty Corporation and any successor thereto. "PENSION PLAN" means any employee pension benefit plan within the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of the Code and which (i) is maintained for employees of the Company or any of its ERISA Affiliates or is assumed by the Company or any of its ERISA Affiliates in connection with any acquisition or (ii) has at any time been maintained for the employees of the Company or any current or former ERISA Affiliate. "PERMITTED ACQUISITION" means the acquisition by the Company or a Subsidiary of a controlling equity interest in or all or substantially all of the assets of any Person, which satisfies each of the following: (i) such Person is in the same or similar line or lines of business as that engaged in by the Company and its Subsidiaries; and (ii) no Default or Event of Default has occurred and is continuing at the time of, or is created or results from, such transaction. "PERMITTED ASSET SECURITIZATIONS" means limited recourse sales and assignments of assets of the Company or any of its Subsidiaries to one or more special purpose entities the proceeds of 34 41 which shall be made available to the Company or its Subsidiaries at such rates of advance, and the obligations secured by such assets shall be issued by such special purpose entities in such amount or amounts, bear such rates of interest, and be subject to such other terms and conditions, all as shall be reasonably acceptable to the Global Agent. "PERSON" means an individual, limited liability company, partnership, corporation, trust, unincorporated organization, association, joint venture or other entity or a government or agency or political subdivision thereof. "PRINCIPAL OFFICE" means, as the context may require, (i) the principal office of the US Facility Agent located at 1900 East Ninth Street, Cleveland Ohio 44114, (ii) the principal office of the UK Facility Agent located at 1 Alie Street, London E1 8DE, England, (iii) the principal office of the Canadian Facility Agent located at 161 Bay Street, STE 4240, Toronto, Ontario M5J 2S1 Canada, and (iv) the principal office of the Australian Facility Agent located at 90 Collins Street 19th Floor, STE-NMELB-1, Melbourne, Australia or such other office and address as any such Facility Agent may from time to time designate. "RATE ADJUSTMENT PAYMENT" shall have the meaning therefor set forth in SECTION 2A.01(c). "RATED DEBT" shall have the meaning therefor set forth in the definition of "Applicable Margin." "REGISTER" shall have the meaning therefor set forth in SECTION 13.01(b). "REGULATION D" means Regulation D of the Board as the same may be amended or supplemented from time to time. "REGULATORY CHANGE" means any change effective after the Closing Date in United States federal or state laws or regulations (including Regulation D and capital adequacy regulations), English laws or regulations, Canadian federal or provincial laws or regulations, Australian federal or provincial laws or regulations, or other foreign laws or regulations or the adoption or making after such date of any interpretations, directives or requests applying to a class of banks, which includes any of the Lenders, under any United States federal or state, English, Canadian federal or provincial, Australian federal or provincial or other foreign laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof or compliance by any Lender with any request or directive regarding capital adequacy, whether or not having the force of law, whether or not failure to comply therewith would be unlawful and whether or not published or proposed prior to the Closing Date. "REIMBURSEMENT OBLIGATION" means at any time, as applicable, (a) the obligation of the US Facility Borrower with respect to any Letter of Credit to reimburse the Issuing Bank and the US Facility Lenders to the extent of their respective Participations (including by the receipt by the Issuing Bank of proceeds of US Facility Loans pursuant to SECTION 2.01(b)(vi)) for amounts theretofore paid by the Issuing Bank pursuant to a drawing under such Letter of Credit or (b) the 35 42 obligation of the UK Facility Borrowers with respect to any Bank Guarantee to reimburse the Applicable Bank Guarantee Issuer and the UK Facility Lenders to the extent of their respective Participations (including by the receipt by the Applicable Bank Guarantee Issuer of proceeds of UK Facility Loans pursuant to SECTION 3.01(b)(vii)) for amounts theretofore paid by the Applicable Bank Guarantee Issuer pursuant to a Bank Guarantee. "REQUIRED FRONTING LENDERS" shall have the meaning therefor set forth IN SECTION 11.07(a). "REQUIRED LENDERS" means, as of any date, (i) at all times other than following the occurrence and during the continuation of an Event of Default, (A) with respect to the Total Facilities, Lenders on such date, without distinction or preference as between any of the Facilities, having Aggregate Commitments under the Total Facilities aggregating more than 50% of the Total Commitment on such date, and (B) with respect to any specific Facility, Lenders on such date having an Applicable Facility Commitment aggregating more than 50% of the Applicable Total Facility Commitment on such date and (ii) at all times following the occurrence and during the continuation of an Event of Default, (A) with respect to the Total Facilities, Lenders on such date, without distinction or preference as between any of the Facilities, having Credit Exposures aggregating more than 50% of the Aggregate Credit Exposure on such date, and (B) with respect to any specific Facility, Lenders on such date having Facility Credit Exposures aggregating more than 50% of the Aggregate Facility Credit Exposure on such date. For purposes of determining the vote of the Required Lenders above, (i) Bank of America shall be deemed to have the Aggregate Commitment, Applicable Facility Commitments, Credit Exposure and Facility Credit Exposure of Bank of America Canada, BA Australia Limited and of each branch of Bank of America designated as a Lender hereunder, (ii) Mellon Bank, N.A. shall be deemed to have the Aggregate Commitment, Applicable Facility Commitments, Credit Exposure and Facility Credit Exposure of Mellon Bank, N.A., Canada Branch and each branch of Mellon Bank, N.A. designated as a Lender hereunder, and (iii) Bank One, Michigan shall be deemed to have the Aggregate Commitment, Applicable Facility Commitments, Credit Exposure and Facility Credit Exposure of Bank One Canada, Bank One, Michigan, Bank One, NA, Australia Branch, and each branch of Bank One, NA designated as a Lender hereunder. "RESTRICTED LENDER" shall have the meaning therefor set forth in SECTION 6.07. "SAME DAY FUNDS" means (i) with respect to disbursements and payments in US Dollars, immediately available funds, and (ii) with respect to disbursements and payments in an Offshore Currency, same day or other funds as may be determined by the Applicable Facility Agent to be customary in the place of disbursement or payment for the settlement of international banking transactions in such Offshore Currency. "SCHEDULE II BANK" means a bank listed on Schedule II to the Bank Act (Canada). "SCHEDULE III BANK" means a bank listed on Schedule III to the Bank Act (Canada) that is not subject to the restrictions and requirements referred to in subsection 524(2) of the Bank Act (Canada). 36 43 "SCHEDULE II TO SCHEDULE III ASSIGNMENT" means an assignment by a Lender that is a Schedule II Bank to an affiliate of such Lender that is a Schedule III Bank. "SINGAPORE DOLLARS" or "SNG $" means the lawful currency of Singapore. "S&P" means Standard & Poor's Rating Group, a division of McGraw-Hill Companies, Inc. "SOLVENT" means, when used with respect to any Person, that at the time of determination: (i) the fair value of its assets (both at fair valuation and at present fair saleable value on an orderly basis) is in excess of the total amount of its liabilities, including, without limitation, Contingent Obligations; and (ii) it is then able and expects to be able to pay its debts as they mature; and (iii) it has capital sufficient to carry on its business as conducted and as proposed to be conducted. "SPOT RATE OF EXCHANGE" means (i) in determining the Sterling Equivalent Amount of a specified amount of French Francs as of any date under the UK Facility, the spot exchange rate determined by the UK Facility Agent in accordance with its usual procedures for the purchase by the UK Facility Agent of British Pounds Sterling with French Francs at approximately 11:00 A.M. (London, England time) on the Business Day that is three (3) Business Days prior to such date; (ii) in determining the Sterling Equivalent Amount of a specified amount of euro as of any date under the UK Facility, the spot exchange rate determined by the UK Facility Agent in accordance with its usual procedures for the purchase by the UK Facility Agent of British Pounds Sterling with euro at approximately 11:00 A.M. (London, England time) on the Business Day that is three (3) Business Days prior to such date; (iii) in determining the Australian Dollar Equivalent Amount of a specified amount of New Zealand Dollars as of any date under the Australian Facility, the rate quoted by the Australian Facility Agent in accordance with its customary procedures as the spot rate for the purchase by such Australian Facility Agent of Australian Dollars with New Zealand Dollars at approximately 11:00 A.M. (Sydney, Australia time), on such date as of which the foreign computation is made, for delivery two (2) Business Days later; (iv) in determining the French Franc Equivalent Amount of a specified amount of British Pounds Sterling as of any date under the UK Facility, the spot exchange rate determined by the UK Facility Agent in accordance with its usual procedures for the purchase by the UK Facility Agent of French Francs with British Pounds Sterling at approximately 11:00 A.M. (London, England time) on the Business Day that is three (3) Business Days prior to such date; (v) in determining the euro Equivalent Amount of a specified amount of British Pounds Sterling as of any date under the UK Facility, the spot exchange rate determined by the UK Facility Agent in accordance with its usual procedures for the purchase by the UK Facility Agent of euro with British Pounds Sterling at approximately 11:00 A.M. (London, England time) on the Business Day that is three (3) Business Days prior to such date; (vi) in determining the New Zealand Dollar Equivalent Amount of a specified amount of Australian Dollars as of any date under the Australian Facility, the rate quoted by the Australian Facility Agent in accordance with 37 44 its customary procedures as the spot rate for the purchase by such Australian Facility Agent of New Zealand Dollars with Australian Dollars at approximately 11:00 A.M. (Sydney, Australia time), on such date as of which the foreign computation is made, for delivery two (2) Business Days later; and (vii) in determining the US Dollar Equivalent Amount of a specified amount of any Applicable Currency as of any date, the spot rate of exchange determined by the Global Agent in accordance with its usual procedures for the purchase by the Global Agent of US Dollars with such Applicable Currency at approximately 11:00 A.M. (Charlotte, North Carolina time) on the Business Day that is two (2) Business Days prior to such date. "STERLING EQUIVALENT AMOUNT" means, (i) the amount denominated in British Pounds Sterling, (ii) with respect to a specified amount of French Francs, the amount of British Pounds Sterling into which such amount of French Francs would be converted, based on the applicable Spot Rate of Exchange, and (iii) with respect to a specified amount of euro, the amount of British Pounds Sterling into which such amount of euro would be converted, based on the applicable Spot Rate of Exchange. "SUBSEQUENT PARTICIPANT" means each country that adopts the euro as its lawful currency after January 1, 1999. "SUBSIDIARY" means any Person in which more than 50% of its outstanding voting stock or rights or more than 50% of all equity interest is owned directly or indirectly by the Company. "SUBSTITUTE BASE RATE LOANS" shall have the meaning therefor set forth in SECTION 6.04. "SWAP AGREEMENT" means one or more agreements with respect to Indebtedness evidenced by the Notes or Obligations under any Facility between one or more Borrowers and one or more Lenders, on terms mutually acceptable to such Borrower or Borrowers and such Lender or Lenders, which agreements create Hedging Obligations. "TAXES" means any and all present or future taxes, levies, assessments, imposts, duties, deductions, fees, withholdings or similar charges, and all liabilities with respect thereto, excluding, in the case of each Lender and each Agent, respectively, taxes imposed on or measured by its net income by the jurisdiction (or any political subdivision thereof) under the laws of which such Lender or such Agent, as the case may be, is organized or maintains a lending office. "TERMINATION EVENT" means: (i) a "Reportable Event" described in Section 4043 of ERISA and the regulations issued thereunder (unless the notice requirement has been waived by applicable regulation); or (ii) the withdrawal of the Company or any ERISA Affiliate from a Pension Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or was deemed such under Section 4062(e) of ERISA; or (iii) the termination of a Pension Plan, the filing of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination under Section 4041 of ERISA; or (iv) the institution of proceedings to terminate a Pension Plan by the PBGC; or (v) any other event or condition which would constitute grounds under Section 4042(a) of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; or (vi) the partial or complete 38 45 withdrawal of the Company or any ERISA Affiliate from a Multiemployer Plan; or (vii) the imposition of a Lien pursuant to Section 412 of the Code or Section 302 of ERISA; or (viii) any event or condition which results in the reorganization or insolvency of a Multiemployer Plan under Section 4241 or Section 4245 of ERISA, respectively; or (ix) any event or condition which results in the termination of a Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA; or (x) any event or condition with respect to any Employee Benefit Plan which is regulated by any Foreign Benefit Law that results in such Employee Benefit Plan's termination or the revocation of the Employee Benefit Plan's authority to operate under the applicable Foreign Benefit Law. "TERM LOAN PREMIUM" means that percent per annum set forth opposite the applicable period at the time of determination set forth in the table below: - -------------------------------------------- ------------------------------- Period Term Loan Premium - -------------------------------------------- ------------------------------- August 2, 2001 through February 1, 2001 0.50% - -------------------------------------------- ------------------------------- February 2, 2002 through August 1,2002 1.00% - -------------------------------------------- ------------------------------- August 2, 2002 through February 1, 2003 1.25% - -------------------------------------------- ------------------------------- February 2, 2003 through the Applicable 1.50% Term Loan Termination Date - -------------------------------------------- ------------------------------- "TOTAL AUSTRALIAN DOLLAR COMMITMENT" means, as of any date of determination thereof, an amount equal to the Total Australian Facility Commitment (as the same may be reduced from time to time pursuant to this Agreement) less the New Zealand Dollar Outstandings as of such date. "TOTAL AUSTRALIAN FACILITY COMMITMENT" means an amount equal to AUS $100,000,000 inclusive of the Total New Zealand Dollar Commitment, each as reduced from time to time in accordance with SECTION 5.07. "TOTAL BANK GUARANTEE COMMITMENT" means an amount not to exceed GBP 7,000,000. "TOTAL BRITISH POUNDS STERLING COMMITMENT" means, as of any date of determination thereof, an amount equal to the Total UK Facility Commitment (as the same may be reduced from time to time pursuant to this Agreement) less the French Franc Outstandings and the euro Outstandings as of such date. "TOTAL CANADIAN FACILITY COMMITMENT" means an amount equal to CAN $105,000,000, as reduced from time to time in accordance with SECTION 4.07, SECTION 4.12 or SECTION 4.13. "TOTAL COMMITMENT" means, at any time of determination, the Total US Facility Commitment, plus the aggregate US Dollar Equivalent Amount of each of the Total UK Facility Commitment, the Total Canadian Facility Commitment and the Total Australian Facility Commitment. 39 46 "TOTAL FACILITIES" means, in the aggregate, all of the US Facility, the UK Facility, the Canadian Facility and the Australian Facility. "TOTAL FACILITY TERMINATION DATE" means the earliest to occur of (i) August 3, 2005, or (ii) the date of termination of the Lenders' obligations pursuant to SECTION 11.01 upon the occurrence of an Event of Default, or (iii) such date as the Borrowers may voluntarily permanently terminate all the Total Facilities by termination of all Commitments and payment in full of all Obligations. "TOTAL FACILITY REPAYMENT DATE" means such date as all of the following shall have occurred: (a) the Borrowers shall have permanently terminated each Facility by payment in full of all Outstandings together with all accrued and unpaid interest thereon, (b) all Swap Agreements shall have been terminated, expired or cash collateralized, (c) all Commitments shall have terminated or expired and (d) the Borrowers shall have fully, finally and irrevocably paid and satisfied in full all Obligations (other than Obligations consisting of continuing indemnities and other contingent Obligations of the Borrowers or the Guarantor that may be owing to the Lenders pursuant to the Loan Documents and expressly survive termination of this Agreement). "TOTAL LETTER OF CREDIT COMMITMENT" means the US Dollar Equivalent Amount of US $40,000,000. "TOTAL NEW ZEALAND DOLLAR COMMITMENT" means, at any date of determination, an amount equal to the New Zealand Dollar Equivalent Amount of AUS $10,000,000 (as reduced from time to time in accordance with SECTION 5.07) as at such date. "TOTAL UK ALTERNATIVE CURRENCY COMMITMENT" means, at any date of determination, an amount equal to the French Franc Equivalent Amount and the euro Equivalent Amount in the sum of (pound)16,750,000 (as reduced from time to time in accordance with SECTION 3.07) as at such date. "TOTAL UK FACILITY COMMITMENT" means an amount equal to (pound)33,500,000 inclusive of the Total UK Alternative Currency Commitment and the Total Bank Guarantee Commitment, each as reduced from time to time in accordance with SECTION 3.07. "TOTAL US FACILITY COMMITMENT" means an amount equal to US $550,000,000 inclusive of the Total Letter of Credit Commitment, as reduced from time to time in accordance with SECTION 2.07, SECTION 2.12 or SECTION 2.13. "TOTAL US FACILITY REVOLVING CREDIT COMMITMENT" means, as of any date of determination thereof, an amount equal to the Total US Facility Commitment (as the same may be reduced from time to time pursuant to this Agreement) less the amount of US Facility Term Loan Outstandings as of such date. "TYPE" means any type of Loan (i.e., an Applicable Base Rate Loan, Eurodollar Rate Loan, Offshore Rate Loan, Canadian Facility BA Rate Loan or, for purposes of ARTICLE VI only, 40 47 a UK Facility Alternative Rate Loan) or any type of Letter of Credit or Bank Guarantee issued hereunder. "UK FACILITY" means the facilities described in ARTICLES III and IIIA hereof providing for Loans to the UK Facility Borrowers by the UK Facility Lenders in the aggregate principal amount of the Total UK Facility Commitment and for Bank Guarantees on behalf of the UK Facility Borrowers by the Applicable Bank Guarantee Issuer in the aggregate principal amount of the Total Bank Guarantee Commitment, respectively. "UK FACILITY ADVANCE" means a borrowing under the UK Facility consisting of the aggregate principal amount of an Offshore Rate Loan or a UK Facility Base Rate Loan. "UK FACILITY AGENT" shall have the meaning therefor set forth in the introduction hereto. "UK FACILITY ALTERNATIVE CURRENCY FRONTING COMMITMENT" means, with respect to each UK Facility Lender, the obligation of such Lender to make UK Facility Loans in French Francs or in euro to the UK Facility Borrowers on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Percentage for the UK Facility multiplied by the Total UK Alternative Currency Commitment, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement. "UK FACILITY ALTERNATIVE CURRENCY TRANCHE" means the facility described in ARTICLE III hereof providing for Loans funded in French Francs or in euro to the UK Facility Borrowers by the UK Facility Lenders in an aggregate principal amount at any time outstanding not to exceed the Total UK Alternative Currency Commitment. "UK FACILITY ALTERNATIVE RATE" means such rate of interest per annum determined by the UK Facility Agent and the UK Facility Borrowers as an alternative basis (i) for determining the rates of interest from time to time applicable to Loans under the UK Facility and/or (ii) upon which Loans may be maintained under the UK Facility, in each case pursuant to SECTION 6.02 or SECTION 6.04, which rate of interest shall be determined within thirty (30) days of notification to the UK Facility Borrowers in accordance with the provisions of SECTION 6.02 or SECTION 6.04, as applicable. If no such alternative basis is agreed upon by the UK Facility Agent and the UK Facility Borrowers, each UK Facility Lender shall certify a reasonable alternative basis for maintaining Loans under the UK Facility that reflects such UK Facility Lender's cost of funds (a "substitute basis"), which substitute basis may (without limitation) include alternative Interest Periods, alternative currencies or alternative rates of interest but shall include a margin above the cost of funds including the UK Facility Mandatory Cost, if any, to such UK Facility Lender and the Applicable Margin. "UK FACILITY ALTERNATIVE RATE LOAN" means a UK Facility Loan for which the rate of interest is determined by reference to the UK Facility Alternative Rate, solely for purposes of ARTICLE VI. 41 48 "UK FACILITY BASE RATE" means for any day of determination thereof the sum of (a) the rate per annum equal to the offered quotation rate to first class banks in the London interbank market by Bank of America, N.A. for deposits (for delivery on such day) in British Pounds Sterling of amounts in Same Day Funds comparable to the principal amount of the UK Facility Loan for which the rate of interest is being determined for overnight borrowing as of approximately 1:00 P.M. (London, England time) on such date of determination plus (b) the Applicable Margin for Offshore Rate Loans plus (c) the UK Facility Mandatory Cost. The UK Facility Base Rate for any day which is not a Business Day shall be the UK Facility Base Rate for the preceding Business Day. "UK FACILITY BASE RATE LOAN" means a UK Facility Loan for which the rate of interest is determined by reference to the UK Facility Base Rate and includes without limitation all UK Facility Base Rate Refunding Loans. "UK FACILITY BASE RATE REFUNDING LOAN" means a UK Facility Base Rate Loan made pursuant to SECTION 3.01(B)(VII) hereof to satisfy Reimbursement Obligations arising from a drawing under a Bank Guarantee. "UK FACILITY BORROWERS" shall have the meaning therefor set forth in the introduction hereto. "UK FACILITY COMMITMENT" means, with respect to any Lender, such Lender's Applicable Facility Commitment for the UK Facility. "UK FACILITY FRONTING COMMITMENT" means, with respect to each UK Facility Lender, the obligation of such Lender to make Loans to the UK Facility Borrowers and the obligation of such Lender to purchase Participations in Bank Guarantees issued for the account of the UK Facility Borrowers on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Percentage for the UK Facility multiplied by the Total UK Facility Commitment, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement, and shall consist of (but not be equal to the sum of the aggregate of) such Lender's British Pounds Sterling Fronting Commitment and its UK Facility Alternative Currency Fronting Commitment. "UK FACILITY LENDERS" means those Lenders identified in the introduction hereto with respect to their making UK Facility Loans on behalf of all the Lenders. "UK FACILITY LOANS" means any borrowing pursuant to a UK Facility Advance under the UK Facility in accordance with the terms of SECTION 3.01. "UK FACILITY MANDATORY COST" means a rate per annum determined by the UK Reference Bank and notified thereby to the UK Facility Agent calculated in accordance with the following formula: BY + S(Y-Z) + (F X 0.01) ------------------------ UK Facility Mandatory Cost per annum = 100 - (B+S) 42 49 where on the day of application of the formula: B = The percentage of the UK Reference Bank's Eligible Liabilities (in excess of any stated minimum) by reference to which the Bank of England and/or the Financial Services Authority requires the UK Reference Bank to hold on a non-interest bearing deposit account in accordance with its cash ratio requirements; Y = The percentage rate per annum at which sterling deposits are offered by the UK Reference Bank to leading banks in the London interbank market at or about 11:00 A.M. (London, England time) on that day for the relevant period; F = The rate of charge payable by the UK Reference Bank to the Financial Services Authority under paragraph 2.02 or 2.03 (as appropriate) of the Fees Regulations (but where for this purpose the figure at paragraph 2.02b or 2.03b shall be deemed to be zero) and expressed in British Pounds Sterling per (pound)1,000,000 of the Fee Base of the UK Reference Bank; S = The percentage of the UK Reference Bank's Eligible Liabilities which the Bank of England (or other relevant United Kingdom governmental authority or agency) requires the UK Reference Bank to place as a Special Deposit; and Z = The interest rate per annum payable by the Bank of England to the UK Reference Bank on Special Deposits. (a) For the purposes of this definition: (i) "ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" shall have the meanings given to them at the time of application of the above formula under or pursuant to the Bank of England Act 1998 or by the Bank of England (as appropriate); (ii) "FEE BASE" has the meaning given to it in the Fees Regulations; (iii) "FEES REGULATIONS" means any regulations governing the payment of fees for banking supervision; (b) In the application of the above formula, B, Y, S, and Z are included in the formula as figures and not as percentages, e.g. if B = 0.5% and Y = 15%, BY is calculated as 0.5 x 15 and not as 0.5% x 15%. A negative result obtained from subtracting Z from Y is to be treated as zero. (c) (i) The above formula is applied on the first day of each relevant period comprised in the relevant Interest Period. 43 50 (ii) Each rate calculated in accordance with the above formula is, if necessary, rounded upward to four decimal places. (d) The UK Facility Agent may, from time to time, after consultation with the Company and the Lenders, determine and notify to the Company and the Lenders any amendments or variations which are required to be made to the formula set out above in order to comply with any requirements from time to time imposed by any applicable regulatory authority in relation to UK Facility Advances denominated in British Pounds Sterling (including, without limitation, any requirements relating to British Pounds Sterling primary liquidity) and any such determination shall, in the absence of manifest error, be conclusive and binding on all the Borrowers, the Lenders, the Agents and the Company. "UK FACILITY MAXIMUM AMOUNT" means, with respect to each UK Facility Borrower, 95% of the amount by which the fair value of its assets (determined at the lesser of fair valuation and present fair saleable value on an orderly basis) is in excess of the total amount of its liabilities, including without limitation Contingent Obligations, as of the Closing Date; provided, however, that if the calculation of UK Facility Maximum Amount in the manner provided above as of the date payment is required of such UK Facility Borrower pursuant to ARTICLE III would result in a greater positive number, then the UK Facility Maximum Amount shall be such greater positive number. "UK FACILITY OUTSTANDINGS" means, at any date of determination, the British Pounds Sterling Outstandings plus the French Franc Outstandings plus the euro Outstandings. "UK OVERNIGHT RATE" means, for any day, the rate of interest per annum at which overnight deposits in the Applicable Currency, in an amount approximately equal to the amount with respect to which such date is being determined, would be offered for such day by the UK Facility Agents to major banks in the London or other applicable offshore interbank market. The UK Overnight Rate for any day which is not a Business Day shall be the UK Overnight Rate for the preceding Business Day. "UK QUALIFYING LENDER" shall have the meaning therefor set forth in SECTION 6.06(g). "UK REFERENCE BANK" means Bank of America, N.A. "US DOLLAR EQUIVALENT AMOUNT" means, (a) the amount denominated in US Dollars and (b) with respect to a specified amount of any Applicable Currency other than US Dollars, the amount of US Dollars into which such amount of such other Applicable Currency would be converted, based on the applicable Spot Rate of Exchange. "US DOLLARS" or "US $" means dollars constituting legal tender for the payment of public and private debts in the United States of America. "US FACILITY" means the facilities described in ARTICLES II and IIA hereof providing for Loans to the US Facility Borrower by the US Facility Lenders in the aggregate principal amount of the Total US Facility Commitment and for Letters of Credit on behalf of the US Facility 44 51 Borrower by the Issuing Bank in the aggregate US Dollar Equivalent Amount of the Total Letter of Credit Commitment, respectively. "US FACILITY ADVANCE" means a borrowing under the US Facility Revolving Credit Facility consisting of the aggregate principal amount of a US Facility Base Rate Loan or Eurodollar Rate Loan, as the case may be. "US FACILITY AGENT" shall have the meaning therefor set forth in the introduction hereto. "US FACILITY BASE RATE" means, for any day, the rate per annum equal to the higher of (i) the Federal Funds Effective Rate for such day plus one-half of one percent (.5%) and (ii) the US Prime Rate for such day. Any change in the US Facility Base Rate resulting from a change in the US Prime Rate or the Federal Funds Effective Rate shall become effective on the effective date of such change in the US Prime Rate or the Federal Funds Effective Rate. "US FACILITY BASE RATE LOAN" means a US Facility Loan for which the rate of interest is determined by reference to the US Facility Base Rate and includes without limitation all US Facility Base Rate Refunding Loans. "US FACILITY BASE RATE REFUNDING LOAN" means a US Facility Base Rate Loan made pursuant to SECTION 2.01(b)(vi) hereof to satisfy Reimbursement Obligations arising from a drawing under a Letter of Credit. "US FACILITY BORROWER" shall have the meaning therefor set forth in the introduction hereto. "US FACILITY COMMITMENT" means, with respect to any Lender, such Lender's Applicable Facility Commitment for the US Facility. "US FACILITY FRONTING COMMITMENT" means, with respect to each US Facility Lender, the obligation of such Lender to make or continue US Facility Loans to the US Facility Borrower and the obligation of such Lender to purchase Participations in Letters of Credit issued for the account of the US Facility Borrower on behalf of all the Lenders up to an aggregate principal amount at any one time outstanding equal to the product of such Lender's Applicable Fronting Percentage for the US Facility multiplied by the Total US Facility Commitment, as such fronting commitment may be increased or decreased from time to time pursuant to this Agreement. "US FACILITY LENDERS" means those Lenders identified in the introduction hereto with respect to their making US Facility Loans on behalf of all the Lenders. "US FACILITY LOANS" means any borrowing pursuant to a US Facility Advance under the US Facility in accordance with the terms of SECTION 2.01 or 2.13 hereof. "US FACILITY OUTSTANDINGS" means, at any date of determination, the aggregate amount of all US Facility Revolving Credit Outstandings plus all Letter of Credit Outstandings plus all US Facility Term Loan Outstandings. 45 52 "US FACILITY REVOLVING CREDIT EXTENSION DATE" means August 2, 2001 and each date thereafter, if any, to which the US Facility Revolving Credit Termination Date has been extended pursuant to SECTION 2.12 hereof, but in no event later than the Total Facility Termination Date. "US FACILITY REVOLVING CREDIT FACILITY" means that portion of the US Facility described in SECTION 2.01 hereof providing for US Facility Loans to the US Facility Borrower by the US Facility Lenders in the aggregate principal amount of the Total US Facility Revolving Credit Commitment. "US FACILITY REVOLVING CREDIT OUTSTANDINGS" means, at any date of determination, that portion of the US Facility Outstandings representing the aggregate principal amount of all US Facility Loans outstanding under the US Facility Revolving Credit Facility. "US FACILITY REVOLVING CREDIT TERMINATION DATE" means the earlier of (i) August 2, 2001, or such later date as the US Facility Borrower and the Lenders shall agree in writing pursuant to SECTION 2.12 hereof, or (ii) the Total Facility Termination Date. "US FACILITY TERM LOAN" shall have the meaning therefor set forth in SECTION 2.13. "US FACILITY TERM LOAN FACILITY" means the facility described in SECTION 2.13 hereof providing for the conversion of US Facility Revolving Credit Outstandings on each US Facility Extension Date to US Facility Term Loans. "US FACILITY TERM LOAN OUTSTANDINGS" means, at any date of determination, that portion of the US Facility Outstandings representing the aggregate principal amount of all US Facility Loans outstanding under the US Term Loan Facility. "US FACILITY TERM LOAN TERMINATION DATE" means the earlier of (i) August 3, 2003 and (ii) the Total Facility Termination Date. "US PRIME RATE" means the per annum rate of interest established from time to time by the US Facility Agent as its prime rate, which rate may not be lowest rate charged by the US Facility Agent to its customers. "VOTING STOCK" means shares of capital stock issued by a corporation, or equivalent interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency. 1.02 RULES OF INTERPRETATION. (a) All accounting terms not specifically defined herein shall have the meanings assigned to such terms and shall be interpreted in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. 46 53 (b) The headings, subheadings and table of contents used herein or in any other Loan Document are solely for convenience of reference and shall not constitute a part of any such document or affect the meaning, construction or effect of any provision thereof. (c) Except as otherwise expressly provided, references herein to articles, sections, paragraphs, clauses, annexes, appendices, exhibits and schedules are references to articles, sections, paragraphs, clauses, annexes, appendices, exhibits and schedules in or to this Agreement. (d) All definitions set forth herein or in any other Loan Document shall apply to the singular as well as the plural form of such defined term, and all references to the masculine gender shall include reference to the feminine or neuter gender, and vice versa, as the context may require. (e) When used herein or in any other Loan Document, words such as "hereunder", "hereto", "hereof" and "herein" and other words of like import shall, unless the context clearly indicates to the contrary, refer to the whole of the applicable document and not to any particular article, section, subsection, paragraph or clause thereof. (f) References to "including" means including without limiting the generality of any description preceding such term. (g) Any reference to an officer of any Borrower or any other Person by reference to the title of such officer shall be deemed to refer to each other officer of such Person, however titled, exercising the same or substantially similar functions. (h) All references to any agreement or document as amended, modified or supplemented, or words of similar effect, shall mean such document or agreement, as the case may be, as amended, modified or supplemented from time to time only as and to the extent permitted therein and in the Loan Documents. 1.03 AMENDMENT AND RESTATEMENT. The Borrowers, the Agents and the Lenders hereby agree that upon the effectiveness of this Agreement, the terms and provisions of the Existing Credit Agreement shall be and hereby are amended and restated in their entirety by the terms and conditions of this Agreement and the terms and provisions of the Existing Credit Agreement, except as otherwise provided herein, shall be superseded by this Agreement. Notwithstanding the amendment and restatement of the Existing Credit Agreement by this Agreement, the Borrowers shall continue to be liable to the Agents and the Lenders with respect to agreements on the part of the Borrowers under the Existing Credit Agreement to indemnify and hold harmless the Agents and the Lenders from and against all claims, demands, liabilities, damages, losses, costs, charges and expenses to which the Agents and the Lenders may be subject arising in connection with the Existing Credit Agreement. All of the indebtedness, liabilities and obligations owing by the Borrowers under the Existing Credit Agreement shall still be owing under this Agreement, which is given in substitution for, and not payment or novation of, the Existing Credit Agreement. Upon the Closing Date, all 47 54 amounts outstanding and owing by the Borrowers under the Existing Credit Agreement as of the Closing Date, shall constitute Advances hereunder accruing interest at the rates set forth herein without the incurrence by any Borrower of any obligation to the Lenders under SECTION 6.05 with respect thereto. The parties hereto agree that (a) all Existing Letters of Credit shall be deemed to have been issued by the Issuing Bank as Letters of Credit pursuant to this Agreement and (b) all Existing Bank Guarantees shall be deemed to have been issued by the Applicable Bank Guarantee Issuer as Bank Guarantees pursuant to this Agreement. 48 55 ARTICLE II The US Facility 2.01 ADVANCES. (a) COMMITMENT. Subject to the terms and conditions of this Agreement, each US Facility Lender severally agrees to make, on behalf of all the Lenders, US Facility Advances in US Dollars to the US Facility Borrower from time to time from the Closing Date until the US Facility Revolving Credit Termination Date, on a pro rata basis as to the total borrowing requested by the US Facility Borrower on any day determined by such US Facility Lender's Applicable Fronting Percentage for the US Facility, up to but not exceeding the US Facility Fronting Commitment of such US Facility Lender, and each Lender shall have a Participation in each such US Facility Advance pursuant to SECTION 2.14 equal in amount to its Applicable Commitment Percentage times such US Facility Advance; provided, however, that the US Facility Lenders will not be required and shall have no obligation to make any US Facility Advance (i) so long as a Default or an Event of Default has occurred and is continuing or (ii) if the Lenders have accelerated the maturity of the Obligations as a result of an Event of Default; provided further, however, that immediately after giving effect to each such US Facility Advance, (x) the US Facility Outstandings shall not exceed the Total US Facility Commitment and (y) the US Facility Revolving Credit Outstandings plus Letter of Credit Outstandings shall not exceed the Total US Facility Revolving Credit Commitment. Within such limits, the US Facility Borrower may borrow, repay and reborrow US Facility Loans hereunder, on a Business Day, from the Closing Date until, but (as to borrowings and reborrowings) not including, the US Facility Revolving Credit Termination Date; provided, however, that (A) no Eurodollar Rate Loan shall be made which has an Interest Period that extends beyond the US Facility Revolving Credit Termination Date and (B) each Eurodollar Rate Loan may be repaid only on the last day of the Interest Period with respect thereto, unless such prepayment is accompanied by the additional payment, if any, due under SECTION 6.05. The US Facility Borrower agrees that if at any time the US Facility Outstandings shall exceed the Total US Facility Commitment or the US Facility Revolving Credit Outstandings plus Letter of Credit Outstandings shall exceed the Total US Facility Revolving Credit Commitment, the US Facility Borrower shall immediately repay a principal amount of the outstanding US Facility Loans such that, as a result of such reduction, the Total US Facility Commitment shall equal or exceed the US Facility Outstandings and the Total US Facility Revolving Credit Commitment shall equal or exceed the US Facility Revolving Credit Outstandings plus Letter of Credit Outstandings. (b) AMOUNTS, ADVANCES AND RATE SELECTION. (i) The principal amount outstanding on any US Facility Loan shall be recorded in the US Facility Agent's records in US Dollars, based on the amount of any US Facility Advance as reduced from time to time by the amount of any principal payments with respect to such US Facility Loan. In the event a US Facility Loan is Continued or Converted pursuant to SECTION 2.08, such election shall be treated as a US 49 56 Facility Advance for purposes of this SECTION 2.01. There shall be no more than ten (10) Eurodollar Rate Loans outstanding at any one time under the US Facility. (ii) Other than US Facility Base Rate Refunding Loans, each US Facility Loan and each Continuation and Conversion under SECTION 2.08 shall be (A) in the case of Eurodollar Rate Loans, in an amount not less than US $10,000,000 and if greater in integral multiples of US $1,000,000, and (B) in the case of US Facility Base Rate Loans in an amount not less than US $5,000,000, and, if greater, an integral multiple of US $1,000,000. (iii) For each US Facility Advance (other than US Facility Base Rate Refunding Loans) an Authorized Representative shall give the US Facility Agent (A) at least three (3) Business Days' irrevocable telefacsimile notice prior to 10:00 A.M. (New York, New York time) of each Eurodollar Rate Loan representing a borrowing or Continuation or Conversion hereunder and (B) irrevocable telefacsimile notice of each US Facility Base Rate Loan representing a borrowing or Continuation or Conversion hereunder prior to 10:00 A.M. (New York, New York time) on the day of such proposed US Facility Base Rate Loan. Each such notice shall be in the form of a Borrowing Notice in the form attached hereto as EXHIBIT D-1, which shall be effective upon receipt by the US Facility Agent, and shall specify the Type of Loan, amount of the US Facility Advance to be made, the date of borrowing and the Interest Period (if a Eurodollar Rate Loan) to be used in the computation of interest. Neither the US Facility Agent nor any US Facility Lender shall incur any liability to the US Facility Borrower in acting upon any notice referred to above which the US Facility Agent believes in good faith to have been given by an Authorized Representative of the US Facility Borrower or for otherwise acting in good faith, and upon funding of US Facility Loans by any US Facility Lender in accordance with this Agreement pursuant to any such notice, the US Facility Borrower shall have effected US Facility Loans hereunder. A Borrowing Notice for a Eurodollar Rate Loan shall be irrevocable, and the US Facility Borrower shall be bound to make a borrowing in accordance therewith, unless such US Facility Borrower pays to the US Facility Lenders such amounts as may be due under SECTION 6.05 for failure of a borrowing of a Eurodollar Rate Loan to occur on the date specified therefor in the related Borrowing Notice. The duration of the initial Interest Period for each US Facility Loan shall be as specified in the initial Borrowing Notice. The US Facility Borrower shall have the option to elect the duration of any subsequent Interest Periods and to Continue or Convert the US Facility Loans in accordance with SECTION 2.08. If the US Facility Agent does not receive a notice of election of the duration of an Interest Period or of the Conversion of a Loan by the time prescribed hereby and by SECTION 2.08, the US Facility Borrower shall be deemed to have elected to Convert such Loan to or Continue such Loan as a US Facility Base Rate Loan until the US Facility Borrower notifies the US Facility Agent in accordance with SECTION 2.08. (iv) Notice of receipt of each Borrowing Notice in respect of US Facility Loans, together with the amount of each US Facility Lender's portion of an Advance requested thereunder and the applicable interest rate, shall be provided by the US Facility Agent to each US Facility Lender by telefacsimile with reasonable promptness, but 50 57 (provided the US Facility Agent shall have received such notice by 10:00 A.M. (New York, New York time), not later than 12:00 noon (New York, New York time) on the same day as the US Facility Agent's receipt of such notice from the US Facility Borrower. (v) Each US Facility Lender shall, pursuant to the terms and subject to the conditions of this Agreement, not later than 12:00 noon (New York, New York time) on the date specified for such US Facility Advance, make the amount of the US Facility Advance or Advances to be made by it on such day available to the US Facility Borrower by depositing or transferring the proceeds thereof in US Dollars and in Same Day Funds to the US Facility Agent at its Principal Office. The amount so received by the US Facility Agent shall, subject to the terms of this Agreement, be made available to the US Facility Borrower by deposit of the proceeds to an account of such US Facility Borrower maintained at the Principal Office or otherwise as shall be directed in the applicable Borrowing Notice. (vi) Notwithstanding the foregoing, if a drawing is made under any Letter of Credit, such drawing is honored by the Issuing Bank, and the US Facility Borrower shall not immediately fully reimburse the Issuing Bank on the same Business Day in respect of such drawing from other funds available to the US Facility Borrower, (A) provided that the conditions to making a US Facility Loan as herein provided shall then be satisfied, the US Dollar Equivalent Amount of the Reimbursement Obligation arising from such drawing shall be paid to the Issuing Bank by the US Facility Agent without the requirement of notice to or from the US Facility Borrower from immediately available funds which shall be advanced as a US Facility Base Rate Refunding Loan in US Dollars to the US Facility Agent at its Principal Office by each US Facility Lender under the US Facility in a US Dollar Equivalent Amount equal to such US Facility Lender's Applicable Fronting Percentage of such Reimbursement Obligation, and (B) if the conditions to making a US Facility Loan as herein provided shall not then be satisfied, each of the US Facility Lenders shall fund by payment to the US Facility Agent (for the benefit of the Issuing Bank) at its Principal Office in immediately available funds in US Dollars the purchase from the Issuing Bank of its respective Participation in the related Reimbursement Obligation based on its respective Applicable Fronting Percentage of the Total Letter of Credit Commitment. If a drawing is presented under any Letter of Credit in accordance with the terms thereof and the US Facility Borrower shall not immediately reimburse the Issuing Bank in respect thereof on the same Business Day, then notice of such drawing or payment shall be provided promptly by the Issuing Bank to the US Facility Agent and the US Facility Agent shall provide notice to each US Facility Lender by telephone or telefacsimile transmission. If notice to the US Facility Lenders of a drawing under any Letter of Credit is given by the US Facility Agent at or before 12:00 noon (New York, New York time) on any Business Day, each US Facility Lender shall either make a US Facility Base Rate Refunding Loan or fund the purchase of its Participation as specified above in the US Dollar Equivalent Amount of such US Facility Lender's Applicable Fronting Percentage of such drawing or payment and shall pay such amount to the US Facility Agent for the account of the Issuing Bank at the Principal Office in US Dollars and in immediately available funds before 4:00 P.M. (New York, 51 58 New York time) on the same Business Day. If such notice to the US Facility Lenders is given by the Agent after 12:00 noon (New York, New York time) on any Business Day, each US Facility Lender shall either make such US Facility Base Rate Refunding Loan or fund such purchase before 12:00 noon (New York, New York time) on the next following Business Day. 2.02 PAYMENT OF INTEREST. (a) The US Facility Borrower shall pay interest to the US Facility Agent for the account of each US Facility Lender on the outstanding and unpaid principal amount of each US Facility Loan made by such US Facility Lender for the period commencing on the date of such US Facility Loan until such Loan shall be paid, Continued or Converted, as the case may be, at the then applicable US Facility Base Rate for US Facility Base Rate Loans or applicable Eurodollar Rate for Eurodollar Rate Loans, such payments to be made in US Dollars; provided, however, that if any Event of Default shall have occurred and be continuing, all amounts outstanding hereunder shall bear interest thereafter at the Default Rate. (b) Interest on each US Facility Loan shall be computed on the basis of a year of 360 days and calculated for the actual number of days elapsed. Interest on each US Facility Loan shall be paid (i) quarterly in arrears on the last Business Day of each fiscal quarter, commencing September 30, 2000, for each US Facility Base Rate Loan, (ii) on the last day of the applicable Interest Period for each Eurodollar Rate Loan and, if the Interest Period extends for more than three months, also at intervals of three months after the first day of the Interest Period and (iii) upon payment in full of the principal amount of each such Loan. Interest on amounts not paid when due shall be payable on demand. 2.03 PAYMENT OF PRINCIPAL. Except as set forth in SECTION 2.13 with respect to US Facility Term Loans, the principal amount of each US Facility Loan shall be due and payable to the US Facility Agent for the benefit of each US Facility Lender in full on the US Facility Revolving Credit Termination Date. The principal amount of any US Facility Base Rate Loan may be prepaid in whole or in part at any time. The principal amount of any Eurodollar Rate Loan may be prepaid only at the end of the applicable Interest Period unless the US Facility Borrower shall pay to the US Facility Agent for the account of the US Facility Lenders the additional amount, if any, required under SECTION 6.05. All prepayments of US Facility Loans made by the US Facility Borrower shall be in the amount of (i) US $10,000,000, or (ii) such greater amount which is an integral multiple of US $1,000,000, or (iii) the amount equal to all US Facility Outstandings, or (iv) such other amount as necessary to comply with SECTION 2.01(A) or 2.07. 2.04 MANNER OF PAYMENT. (a) Each payment of principal (including any prepayment) and payment of interest and fees in respect of US Facility Loans, and any other amount required to be paid to the US Facility Lenders or the Issuing Bank with respect to the US Facility Loans, Letters of Credit or Reimbursement Obligations, shall be made to the US Facility Agent at its Principal Office, for the account of each US Facility Lender's or the Issuing Bank's Applicable Lending Office, 52 59 respectively. Each such payment shall be made in US Dollars and in Same Day Funds before 12:00 noon (New York, New York time) on the date such payment is due. The US Facility Agent may, but shall not be obligated to, debit the amount of any such payment which is not made by such time to any ordinary deposit account, if any, of the US Facility Borrower with the US Facility Agent. The US Facility Borrower shall give the US Facility Agent prior telephonic notice of any payment of principal, such notice to be given by not later than 11:00 A.M. (New York, New York time), on the date of such payment. (b) The US Facility Agent shall deem any payment by or on behalf of the US Facility Borrower hereunder that is not made both (i) in US Dollars and in Same Day Funds and (ii) prior to 12:00 noon (New York, New York time) to be a non-conforming payment. Any such payment shall not be deemed to be received by the US Facility Agent until the later of (x) the time such funds become available funds and (y) the next Business Day. The US Facility Agent shall give prompt telephonic notice to the applicable Authorized Representative and each of the US Facility Lenders (confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of SECTION 11.01(A) and 11.01(B). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding Business Day) at the Default Rate or the maximum rate permitted by applicable law, whichever is lower, from the date such amount was due and payable until the date such amount is paid in full. (c) In the event that any payment hereunder or under the US Facility Loans becomes due and payable on a day other than a Business Day, then such due date shall be extended to the next succeeding Business Day unless otherwise provided under clause (ii) of the definition of "Interest Period"; provided that interest shall continue to accrue during the period of any such extension. 2.05 EVIDENCE OF INDEBTEDNESS. The US Facility Borrower hereby authorizes each US Facility Lender and the US Facility Agent to record, from time to time, in its records, the date and amount of each US Facility Loan; the interest rates payable by the US Facility Borrower in respect of each US Facility Loan and any Interest Period applicable thereto; the dates and amounts of all payments received by such US Facility Lender on account of principal, interest and fees; and the amount of all US Facility Loans which remain payable by the US Facility Borrower to such US Facility Lender. All amounts and other information so recorded shall be prima facie evidence thereof. The failure to record, or any error in recording, any such amount or other information shall not limit or impair the obligations of the US Facility Borrower hereunder or under any Loan Document. 2.06 PRO RATA PAYMENTS . Except as otherwise provided herein, (a) each payment on account of the principal of and interest on the US Facility Loans and Reimbursement Obligations as to which the US Facility Lenders have funded their respective Participations which remain outstanding shall be made to the US Facility Agent for the account of the US Facility Lenders pro rata based on their Applicable Fronting Percentages for the US Facility, (b) all payments to be made by the US Facility Borrower for the account of each of the US Facility Lenders on account of principal, interest and fees shall be made without diminution, set-off, recoupment, 53 60 counterclaim or, except as set forth in SECTION 6.06(a) hereof, deduction, and (c) the US Facility Agent will promptly distribute payments received to the US Facility Lenders and to the Issuing Bank, as applicable. Notwithstanding the foregoing, in the event any US Facility Lender shall not be able to make an Eurodollar Rate Loan under the circumstances provided in SECTION 6.01 or 6.03, interest shall be allocated to such US Facility Lender according to the interest rate payable to such US Facility Lender as set forth in SECTION 6.04. 2.07 REDUCTIONS. The US Facility Borrower shall, by notice from an Authorized Representative, have the right from time to time (but not more frequently than once during each fiscal quarter), upon not less than ten (10) Business Days' written notice to the US Facility Agent, effective upon receipt, to reduce the Total US Facility Commitment. The US Facility Agent shall give each US Facility Lender, within one (1) Business Day, telefacsimile notice, or telephonic notice (confirmed in writing), of such reduction. Each such reduction shall be in the aggregate amount of US $10,000,000 or such greater amount which is in an integral multiple of US $1,000,000, or the entire remaining Total US Facility Commitment, and shall permanently reduce the Total US Facility Commitment. No such reduction shall result in the payment of any Eurodollar Rate Loan other than on the last day of the Interest Period of such Loan unless such prepayment is accompanied by amounts due, if any, under SECTION 6.05. Each such reduction of the Total US Facility Commitment shall be accompanied by payment of the principal amount of US Facility Loans to the extent that the US Facility Outstandings exceed the Total US Facility Commitment, or the US Facility Revolving Credit Outstandings plus Letter of Credit Outstandings exceed the Total US Facility Revolving Credit Commitment, after giving effect to such reduction, together with accrued and unpaid interest on the amounts prepaid. 2.08 CONVERSIONS AND ELECTIONS OF SUBSEQUENT INTEREST PERIODS. Subject to the limitations set forth below and in ARTICLE VI hereof, the US Facility Borrower may: (a) upon notice to the US Facility Agent on or before 10:00 A.M. (New York, New York time) on any Business Day, Convert all or a part of Eurodollar Rate Loans to US Facility Base Rate Loans under the US Facility on the last day of the Interest Period for such Eurodollar Rate Loans; and (b) provided that no Default or Event of Default shall have occurred and be continuing, upon three (3) Business Days' notice to the US Facility Agent on or before 10:00 A.M. (New York, New York time): (i) elect a subsequent Interest Period for all or a portion of Eurodollar Rate Loans under the US Facility to begin on the last day of the then current Interest Period for such Eurodollar Rate Loans; and (ii) Convert US Facility Base Rate Loans to Eurodollar Rate Loans under the US Facility on any Business Day. Notice of any such Continuations or Conversions shall be effected by receipt of an appropriate Borrowing Notice and shall specify the effective date of such Continuation or Conversion and the Interest Period to be applicable to the US Facility Loan as Continued or 54 61 Converted. Each Continuation and Conversion pursuant to this SECTION 2.08 shall be subject to the limitations on Eurodollar Rate Loans set forth in the definition of "Interest Period" herein and in SECTIONS 2.01 and 2.03 and ARTICLE VI hereof. All such Continuations or Conversions of US Facility Loans shall be effected pro rata based on the Applicable Fronting Percentages of the US Facility Lenders for the US Facility. 2.09 FACILITY FEE. For the period beginning on the Closing Date and ending on the Total Facility Termination Date, the Company agrees to pay to the US Facility Agent, and the US Facility Agent shall then pay to each Lender at its office in the United States so designated thereby based on such Lender's Applicable Commitment Percentage, a Facility Fee equal to the Applicable Margin for Facility Fees multiplied by the Total US Facility Commitment. Such payments of Facility Fees provided for in this SECTION 2.09 shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December beginning September 30, 2000 to and on the Total Facility Termination Date. Notwithstanding the foregoing, so long as any US Facility Lender fails to make available any portion of its US Facility Fronting Commitment when properly requested by the US Facility Borrower, such US Facility Lender shall not be entitled to receive payment of its pro rata share of such Facility Fee until such US Facility Lender shall make available such portion. Such Facility Fee shall be calculated on the basis of a year of 360 days for the actual number of days elapsed. 2.10 DEFICIENCY ADVANCES; FAILURE TO PURCHASE PARTICIPATIONS. No US Facility Lender shall be responsible for any default of any other US Facility Lender in respect to such other US Facility Lender's obligation to make any US Facility Loan hereunder or to fund its purchase of any Participation hereunder nor shall the US Facility Fronting Commitment or Letter of Credit Commitment of any US Facility Lender or the US Facility Commitment of any Lender be increased as a result of such default of any other US Facility Lender. Without limiting the generality of the foregoing, in the event any US Facility Lender shall fail to advance funds to the US Facility Borrower as herein provided, the US Facility Agent may in its discretion, but shall not be obligated to, make a US Facility Advance hereunder as a US Facility Lender of all or any portion of such amount or amounts (each, a "deficiency advance") and shall thereafter be entitled to payments of principal of and interest on such deficiency advance in the same manner and at the same interest rate or rates to which such other US Facility Lender would have been entitled had it made such advance hereunder; provided that, upon payment to the US Facility Agent from such other US Facility Lender of the entire outstanding amount of each such deficiency advance, together with accrued and unpaid interest thereon, from the most recent date or dates interest was paid to the US Facility Agent by the US Facility Borrower on each US Facility Loan comprising the deficiency advance, at the interest rate per annum for overnight borrowing by the US Facility Agent from the Federal Reserve Bank, then such payment shall be credited against the applicable US Facility Loan of the US Facility Agent in full payment of such deficiency advance and the US Facility Borrower shall be deemed to have borrowed the amount of such deficiency advance from such other US Facility Lender as of the most recent date or dates, as the case may be, upon which any payments of interest were made by the US Facility Borrower thereon. In the event any US Facility Lender shall fail to fund its purchase of a Participation after notice from the US Facility Agent, such US Facility Lender shall pay to the Issuing Bank such amount on demand, together with interest at the Federal Funds Effective Rate on the amount so due from the date of such notice to the date such purchase price is received by the Issuing Bank. 55 62 2.11 USE OF PROCEEDS. The proceeds of the US Facility Loans made pursuant to the US Facility hereunder shall be used by the US Facility Borrower to finance capital expenditures and Permitted Acquisitions and for other working capital and general corporate needs of the Company and its Subsidiaries, including commercial paper backup liquidity.. 2.12 US FACILITY EXTENSION. (a) With the unanimous consent of all Lenders under the Total Facilities, at each US Facility Revolving Credit Extension Date the US Facility Borrower can elect to extend the US Facility Revolving Credit Termination Date for an additional period of 364 days with respect to the Total US Facility Commitment as at such US Facility Revolving Credit Extension Date; provided, however, that in no event shall the US Facility Revolving Credit Termination Date be extended beyond the Total Facility Termination Date. (b) The US Facility Borrower shall notify the Lenders of its request for such an extension by delivering to the US Facility Agent and the Global Agent notice of such request signed by an Authorized Representative not more than sixty (60) days nor less than forty-five (45) days prior to the applicable US Facility Revolving Credit Extension Date. Notice of receipt of such request shall be provided by the US Facility Agent to the US Facility Lenders and to each other Facility Agent, who shall in turn provide notice of such request to the respective Lenders in each such Facility. The Global Agent shall notify the US Facility Borrower in writing not later than twenty-one (21) days prior to the applicable US Facility Revolving Credit Extension Date of the decision of the Lenders. Failure by any Lender to respond to a request for an extension shall constitute a refusal of such Lender to give its consent to such extension, and the US Facility Revolving Credit Termination Date shall not be extended. Failure by the Global Agent to give such notice to the US Facility Borrower as a result of not receiving the consent of all Lenders to such extension shall constitute refusal by the Lenders to extend the US Facility Revolving Credit Termination Date. (c) If on any US Facility Revolving Credit Extension Date the US Facility Borrower does not so elect to extend the US Facility Revolving Credit Termination Date then in effect, or if all Lenders under the Total Facilities do not unanimously consent to such extension, then as of such US Facility Revolving Credit Termination Date, (i) in addition to any reduction required under SECTION 2.13 hereof, the Total US Facility Commitment as at such date shall be permanently reduced to an amount equal to the US Facility Term Loan Outstandings, if any, (ii) the Total US Facility Revolving Credit Commitment shall be reduced to zero, and (iii) subject to the provisions of SECTION 2.13 hereof, all US Facility Revolving Credit Outstandings plus Letter of Credit Outstandings shall be due and payable in full; except for the undrawn portion of Letters of Credit that have been fully cash collateralized in a manner consistent with the terms OF SECTION 11.01(C). 2.13 US TERM LOAN OPTION. (a) So long as no Default or Event of Default exists, at each US Facility Revolving Credit Extension Date occurring prior to the US Facility Term Loan Termination Date, the US 56 63 Facility Borrower may elect to convert any or all US Facility Revolving Credit Outstandings as of such US Facility Revolving Credit Extension Date into a term loan on such date in the original principal amount equal to such US Facility Revolving Credit Outstandings. US Facility Loans so converted by the US Facility Borrower in accordance with this SECTION 2.13 shall be referred to as the "US Facility Term Loans." Upon such conversion, the Total US Facility Commitment shall be reduced to the amount of the US Facility Term Loan Outstandings on such date. The US Facility Term Loans shall be repaid in equal quarterly installments based on a four (4) year amortization schedule on the first Business Day of each November, February, May, and August, commencing with the first such date after the most recent US Facility Revolving Credit Extension Date and continuing until and including a final payment of all US Facility Term Loan Outstandings on the US Facility Term Loan Termination Date. The US Facility Term Loans may be comprised of US Facility Base Rate Loans and Eurodollar Rate Loans as the US Facility Borrower may elect in accordance with the provisions of this ARTICLE II. The US Facility Term Loans shall bear interest at a rate equal to (i) the same terms as the US Facility Loans prior to the conversion to US Facility Term Loans plus the Term Loan Premium then applicable until the initial Continuation or Conversion thereof pursuant to SECTION 2.08 hereof and (ii) the Applicable Rate for either US Facility Base Rate Loans or Eurodollar Rate Loans, as selected by the Borrower, plus the Term Loan Premium applicable from time to time, at all times after the initial Continuation or Conversion thereof. Amounts repaid or prepaid on the US Facility Term Loans may not be reborrowed, and the Total US Facility Commitment shall be permanently reduced by any such amounts. (b) If on any US Facility Revolving Credit Extension Date the US Facility Borrower does not so elect to convert all or a portion of US Facility Revolving Credit Outstandings as of such date to US Facility Term Loans as described in (a) above, then on the US Facility Revolving Credit Termination Date then in effect, (i) all US Facility Revolving Credit Outstandings as of such date which are not so converted shall be due and payable in full on the US Facility Revolving Credit Termination Date then in effect except for the undrawn portion of Letters of Credit that have been fully cash collateralized in a manner consistent with the terms of SECTION 11.01(C), and (ii) in addition to any reduction required under SECTION 2.12 hereof, the Total US Facility Commitment as at such US Facility Revolving Credit Extension Date shall be permanently reduced by an amount equal to the US Facility Revolving Credit Outstandings as at such date which are not so converted. 2.14 PARTICIPATIONS. On the Closing Date and each day thereafter until the Total Facility Termination Date, each Lender (including a US Facility Lender if necessary) will be deemed to have absolutely, irrevocably and unconditionally purchased from each US Facility Lender a Participation in US Facility Outstandings owing to such US Facility Lender (including in such US Facility Outstandings all Participations of such US Facility Lender in Reimbursement Obligations) in an amount such that, after such purchase, each Lender will have a Facility Credit Exposure under the US Facility equal in amount to its Applicable Commitment Percentage multiplied by the US Facility Outstandings (referred to as the "Facility Participation Amount" for such Lender in the US Facility). Each such Participation of each Lender in the US Facility shall be funded in accordance with SECTION 11.07. 57 64 ARTICLE IIA US Facility Letters of Credit 2A.01 LETTERS OF CREDIT. (a) The Issuing Bank agrees, subject to the terms and conditions of this Agreement and in reliance upon the agreements of the other US Facility Lenders set forth in this ARTICLE IIA and in SECTION 2.01, upon request of the US Facility Borrower to issue from time to time for the account of the US Facility Borrower Letters of Credit in a Letter of Credit Currency upon delivery to the Issuing Bank of an Application and Agreement for Letter of Credit relating thereto in form and content acceptable to the Issuing Bank; provided, that (i) the Issuing Bank shall not be obligated to, and shall not, issue (or renew) any Letter of Credit if it has been notified by the US Facility Agent or has actual knowledge that a Default or Event of Default has occurred and is continuing, (ii) the Letter of Credit Outstandings shall not exceed the Total Letter of Credit Commitment and (iii) no Letter of Credit shall be issued (or renewed) if, after giving effect thereto, either (A) the Letter of Credit Outstandings plus US Revolving Credit Facility Outstandings would exceed the Total US Facility Revolving Credit Commitment or (B) US Facility Outstandings would exceed the Total US Facility Commitment. No Letter of Credit shall have an expiry date (including all rights of the US Facility Borrower or any beneficiary named in such Letter of Credit to require renewal) or payment date occurring later than the earlier to occur of one year after the date of its issuance or the seventh Business Day prior to the then applicable Total Facility Termination Date; provided that if any Letter of Credit is issued with an expiry date (including all rights of the US Facility Borrower or any beneficiary named in such Letter of Credit to require renewal) or payment occurring later than the then applicable US Facility Revolving Credit Termination Date, then such Letter of Credit Outstandings shall be cash collateralized in a manner consistent with the requirements of SECTION 11.01(C) on or prior to the US Facility Revolving Credit Termination Date. (b) Each request for a Letter of Credit in an Offshore Currency shall constitute the US Borrower's request for a Letter of Credit of the US Dollar Equivalent Amount of the amount of the Offshore Currency specified in the request for a Letter of Credit. The stated amount available for drawing under any Letter of Credit issued in an Offshore Currency shall be recorded in the Issuing Bank's records in US Dollars as if the Letter of Credit had been issued in US Dollars in the US Dollar Equivalent Amount of such Letter of Credit, as such amount may be adjusted as provided in SECTION 2A.01(c), (d) or (e). For the purposes of determining the maximum amount of Letter of Credit Outstandings hereunder, it is intended by the parties that all Letters of Credit shall be the functional equivalent of Letters of Credit made and repaid in US Dollars and shall be included in such determination based on their US Dollar Equivalent Amount as determined from time to time as set forth herein. The US Facility Agent shall maintain records (based upon information furnished by the Issuing Bank) sufficient to identify at any time the Spot Rate of Exchange with respect to each Letter of Credit issued in an Offshore Currency. (c) In the event a Letter of Credit issued in an Offshore Currency is for a term exceeding one (1) month, the US Dollar Equivalent Amount of the corresponding Letter of Credit Outstandings shall be recalculated as of the last Business Day of each calendar month and 58 65 the US Facility Agent shall notify the US Facility Borrower and the US Facility Lenders of the new Spot Rate of Exchange as of such Business Day for such Letter of Credit. The US Facility Agent shall apply such new Spot Rate of Exchange to determine the new US Dollar Equivalent Amount of such Letter of Credit as of such Business Day and shall adjust its record of the Letter of Credit Outstandings. In the event that such adjustment with respect to a Letter of Credit causes (x) the Letter of Credit Outstandings plus US Revolving Credit Facility Outstandings to exceed the Total US Facility Revolving Credit Commitment or (y) the US Facility Outstandings to exceed the Total US Facility Commitment, the US Facility Borrower shall immediately repay (a "Rate Adjustment Payment") the portion of US Facility Loans necessary to ensure that, giving effect to the new Spot Rate of Exchange for such Letter(s) of Credit, (A) the sum of Letter of Credit Outstandings plus US Revolving Credit Facility Outstandings does not exceed the Total US Facility Revolving Credit Commitment and (B) US Facility Outstandings do not exceed the Total US Facility Commitment; provided, however, the US Facility Borrower shall not be required to pay any additional compensation pursuant to SECTION 6.05 with respect to a Rate Adjustment Payment if such Rate Adjustment Payment is made immediately upon the effective date giving rise to such Rate Adjustment Payment and no notice of such Rate Adjustment Payment shall be required. In the event that such adjustment with respect to a Letter of Credit does not violate either of the foregoing clauses 2A.01(c)(x) or (y) but does cause the total US Dollar Equivalent Amount of Letter of Credit Outstandings to exceed the Total Letter of Credit Commitment, the US Facility Borrower shall immediately deposit US Dollars in cash (or other immediately available funds acceptable to the US Facility Agent) with the US Facility Agent, in the amount of the Letter of Credit Outstandings which cause such violation, as collateral security for the repayment of any future drawings or repayments under such Letters of Credit and such amounts shall be held by the US Facility Agent pursuant to the terms of the LC Account Agreement. (d) In the event that a Letter of Credit issued in an Offshore Currency is drawn upon, the Spot Rate of Exchange applicable to such Letter of Credit shall be adjusted to be the Spot Rate of Exchange for the date of such drawing and the amount of the corresponding Letter of Credit Outstandings shall be recalculated as of the date of such drawing only for the purposes of repayment of Reimbursement Obligations and determining the US Dollar Equivalent Amount of such Letter of Credit. (e) Without limiting the foregoing provisions of this SECTION 2A.01, in the event any Letter of Credit is issued in euro, the provisions in SECTION 6.09 applicable to the euro shall be applicable to such Letter of Credit. 2A.02 REIMBURSEMENT AND PARTICIPATIONS. (a) The US Facility Borrower hereby unconditionally agrees to pay to the Issuing Bank immediately on demand on the same Business Day at (i) the Principal Office of the US Facility Agent in the case of Letters of Credit issued in US Dollars and (ii) the Funding Bank in the case of Letters of Credit issued in an Offshore Currency all amounts required to pay all drafts drawn or purporting to be drawn under the Letters of Credit and all reasonable expenses incurred by the Issuing Bank in connection with the Letters of Credit, and in any event and without demand to place in possession of the Issuing Bank (which shall include US Facility Base Rate 59 66 Refunding Loans if permitted by SECTION 2.01) sufficient funds to pay all debts and liabilities arising under any Letter of Credit. The Issuing Bank agrees to give the US Facility Borrower prompt notice of any request for a draw under a Letter of Credit. The Issuing Bank may charge any account the US Facility Borrower may have with it for any and all amounts the Issuing Bank pays under a Letter of Credit, plus charges and reasonable expenses as from time to time agreed to by the Issuing Bank and the US Facility Borrower; provided that to the extent permitted by SECTION 2.01(b)(vi), amounts shall be paid pursuant to US Facility Base Rate Refunding Loans. The US Facility Borrower agrees to pay the Issuing Bank interest on any Reimbursement Obligations not paid when due hereunder at the Default Rate. (b) The Issuing Bank shall promptly notify the US Facility Agent of any Letter of Credit issued by the Issuing Bank. In accordance with the provisions of SECTION 2.01(b)(vi), the Issuing Bank shall notify the US Facility Agent of any drawing under any Letter of Credit promptly following the receipt by the Issuing Bank of such drawing. (c) Each US Facility Lender (other than the Issuing Bank) shall automatically acquire on the date of issuance thereof, a Participation in the liability of the Issuing Bank in respect of each Letter of Credit in an amount equal to such Lender's Applicable Fronting Percentage of such liability, and to the extent that the US Facility Borrower is obligated to pay the Issuing Bank under SECTION 2A.02(a), each US Facility Lender (other than the Issuing Bank) thereby shall absolutely, unconditionally and irrevocably assume, and shall be unconditionally obligated to pay to the Issuing Bank, its Applicable Fronting Percentage of the liability of the Issuing Bank under such Letter of Credit in the manner and with the effect provided in SECTION 2.01(b)(vi). (d) Simultaneously with the making of each payment by a US Facility Lender to the Issuing Bank pursuant to SECTION 2.01(b)(vi)(B), such US Facility Lender shall, automatically and without any further action on the part of the Issuing Bank or such US Facility Lender, acquire a Participation in an amount equal to such payment (excluding the portion thereof constituting interest accrued prior to the date the US Facility Lender made its payment) in the related Reimbursement Obligation of the US Facility Borrower. Each US Facility Lender's obligation to make payment to the US Facility Agent for the account of the Issuing Bank pursuant to SECTION 2.01(b)(vi) and SECTION 2A.02(c), and the right of the Issuing Bank to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and shall be made without any offset, abatement, withholding or reduction whatsoever. In the event the US Facility Lenders have purchased Participations in any Reimbursement Obligation as set forth above, then at any time payment (in fully collected, immediately available funds) of such Reimbursement Obligation, in whole or in part, is received by the Issuing Bank from the US Facility Borrower, the Issuing Bank shall promptly pay to each US Facility Lender an amount equal to its Applicable Fronting Percentage of such payment from the US Facility Borrower. (e) Promptly following the end of each calendar month, the Issuing Bank shall deliver to the US Facility Agent a notice describing the aggregate undrawn amount of all Letters of Credit at the end of such month, including with respect to Letters of Credit issued in an Offshore Currency, the date of issuance thereof and the applicable Offshore Currency. The US Facility Agent shall deliver to each US Facility Lender a report on a monthly basis of the 60 67 aggregate Letter of Credit Outstandings at the end of each calendar month determined based on the applicable Spot Rate of Exchange at such date. Upon the request of any US Facility Lender from time to time, the Issuing Bank shall deliver to the US Facility Agent, and the US Facility Agent shall deliver to such US Facility Lender, any other information reasonably requested by such US Facility Lender with respect to each Letter of Credit outstanding. (f) The issuance by the Issuing Bank of each Letter of Credit shall, in addition to the conditions precedent set forth in ARTICLE VII, be subject to the conditions that (x) such Letter of Credit be in such form and contain such terms as shall be reasonably satisfactory to the Issuing Bank consistent with the then current practices and procedures of the Issuing Bank with respect to similar letters of credit, (y) the issuance of such Letter of Credit shall not violate any policy of the Issuing Bank, and (z) the US Facility Borrower shall have executed and delivered such other instruments and agreements relating to such Letters of Credit as the Issuing Bank shall have reasonably requested consistent with such practices and procedures and shall not be in conflict with any of the express terms herein contained. Unless otherwise expressly agreed by the Issuing Bank and the US Facility Borrower when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the "International Standby Practices 1998" published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits as most recently published by the International Chamber of Commerce (the "ICC") at the time of issuance (including the ICC decision published by the Commission on Banking Technique and Practice on April 6, 1998 regarding the European single currency (euro)) shall apply to each commercial Letter of Credit. (g) The US Facility Borrower agrees that the Issuing Bank may, in its sole discretion, accept or pay, as complying with the terms of any Letter of Credit, any drafts or other documents otherwise in order which may be signed or issued by an administrator, executor, trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver, attorney-in-fact or other legal representative of a party who is authorized under such Letter of Credit to draw or issue any drafts or other documents. (h) Without limiting the generality of the provisions of SECTION 13.10, the US Facility Borrower hereby agrees to indemnify and hold harmless the Issuing Bank, each other US Facility Lender and the US Facility Agent from and against any and all claims and damages, losses, liabilities, reasonable costs and expenses which the Issuing Bank, such other US Facility Lender or the US Facility Agent may incur (or which may be claimed against the Issuing Bank, such other US Facility Lender or the US Facility Agent) by any Person by reason of or in connection with the issuance or transfer of or payment or failure to pay under any Letter of Credit; provided that the US Facility Borrower shall not be required to indemnify the Issuing Bank, any other US Facility Lender or the US Facility Agent for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, (i) caused by the willful misconduct or gross negligence of the party to be indemnified or (ii) caused by the failure of the Issuing Bank to pay under any Letter of Credit after the presentation to it of a request for payment strictly complying with the terms and conditions of such Letter of Credit, unless such payment is prohibited by any law, regulation, court order or decree. The indemnification and hold harmless provisions of this 61 68 SECTION 2A.02(h) shall survive repayment of the Obligations, occurrence of the US Facility Revolving Credit Termination Date, the Total Facility Repayment Date and expiration or termination of this Agreement. (i) Without limiting US Facility Borrower's rights as set forth in SECTION 2A.02(h), the obligation of the US Facility Borrower to immediately reimburse the Issuing Bank for drawings made under Letters of Credit and the Issuing Bank's right to receive such payment shall be absolute, unconditional and irrevocable, and such obligations of the US Facility Borrower shall be performed strictly in accordance with the terms of this Agreement and such Letters of Credit and the related Application and Agreement for any Letter of Credit, under all circumstances whatsoever, including the following circumstances: (i) any lack of validity or enforceability of the Letter of Credit, the obligation supported by the Letter of Credit or any other agreement or instrument relating thereto (collectively, the "Related LC Documents"); (ii) any amendment or waiver of or any consent to or departure from all or any of the Related LC Documents; (iii) the existence of any claim, setoff, defense (other than the defense of payment in accordance with the terms of this Agreement) or other rights which the US Facility Borrower may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), the US Facility Agent, the US Facility Lenders, the Issuing Bank or any other Person, whether in connection with the Loan Documents, the Related LC Documents or any unrelated transaction; (iv) any breach of contract or other dispute between the US Facility Borrower and any beneficiary or any transferee of a Letter of Credit (or any Persons for whom such beneficiary or any such transferee may be acting), the US Facility Agent, the US Facility Lenders or any other Person; (v) any draft, statement or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever so long as any such document appeared to comply with the terms of the Letter of Credit; (vi) the existence, character, quality, quantity, condition, value, or delivery (including the time, place, manner or order thereof) of property described or purportedly described in documents presented in connection with any Letter of Credit or the existence, nature or extent of any insurance relating thereto; (vii) any delay, extension of time, renewal, compromise or other indulgence or modification granted or agreed to by the US Facility Agent, with or without notice to or approval by the US Facility Borrower in respect of any of the Obligations; or 62 69 (viii) any other circumstance or happening whatsoever where the Issuing Bank has acted in good faith, whether or not similar to any of the foregoing. 2A.03 GOVERNMENTAL ACTION. The Issuing Bank shall be under no obligation to issue any Letter of Credit if any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Bank from issuing such Letter of Credit, or any law applicable to the Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Bank is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Letter of Credit any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Issuing Bank in good faith deems material to it. 2A.04 LETTER OF CREDIT FACILITY FEES. The US Facility Borrower shall pay to the US Facility Agent, for the pro rata benefit of the US Facility Lenders based on their Applicable Fronting Percentages, a fee on the US Dollar Equivalent Amount of the aggregate amount available to be drawn on each outstanding Letter of Credit at a rate equal to the Applicable Margin for Fixed Rate Loans under the US Facility. Such fees shall be due and payable with respect to each Letter of Credit quarterly in arrears on the last day of each March, June, September and December, the first such payment to be made on the first such date occurring after the date of issuance of a Letter of Credit. 2A.05 LETTER OF CREDIT FRONTING AND ADMINISTRATIVE FEES. The US Facility Borrower shall pay to the Issuing Bank a fronting fee of 0.075% per annum on the initial aggregate US Dollar Equivalent Amount available to be drawn on each outstanding Letter of Credit, such fee to be due and payable in full monthly in arrears on the last Business Day of each calendar month with respect to each Letter of Credit issued or renewed during such calendar month. The US Facility Borrower shall also pay to the Issuing Bank such administrative fee and other fees, if any, in connection with the Letters of Credit in such amounts and at such times as the Issuing Bank and the US Facility Borrower shall agree from time to time. 63 70 ARTICLE III The UK Facility 3.01 ADVANCES (a) COMMITMENT. Subject to the terms and conditions of this Agreement, each UK Facility Lender severally agrees to make, on behalf of all the Lenders, UK Facility Advances in British Pounds Sterling, French Francs or euro (as specified in a Borrowing Notice) to the UK Facility Borrower requesting such UK Facility Advance, as the case may be, as specified in such Borrowing Notice, from time to time from the Closing Date until the Total Facility Termination Date, on a pro rata basis as to the total borrowing requested by such UK Facility Borrower on any day determined by such UK Facility Lender's Applicable Fronting Percentage for UK Facility, up to but not exceeding (i) in the case of Advances in British Pounds Sterling, the British Pounds Sterling Fronting Commitment of such UK Facility Lender, (ii) in the case of Advances in French Francs or euro, the UK Facility Alternative Currency Fronting Commitment of such UK Facility Lender, and each Lender shall have a Participation in each such UK Facility Advance pursuant to SECTION 3.13 equal in amount to its Applicable Commitment Percentage times such UK Facility Advance; provided, however, that the UK Facility Lenders will not be required and shall have no obligation to make any UK Facility Advance (A) so long as a Default or an Event of Default has occurred and is continuing or (B) if the Lenders have accelerated the maturity of the Obligations as a result of an Event of Default; provided further, however, that immediately after giving effect to each such UK Facility Advance, (x) the UK Facility Outstandings shall not exceed the Total UK Facility Commitment, and (y) the sum of the French Franc Outstandings plus the euro Outstandings shall not exceed the Total UK Alternative Currency Commitment. Within such limits, the UK Facility Borrowers may borrow, repay and reborrow UK Facility Loans hereunder, on a Business Day, from the Closing Date until, but (as to borrowings and reborrowings) not including, the Total Facility Termination Date; provided, however, that the aggregate principal amount outstanding to any UK Facility Borrower shall not at any time exceed its UK Facility Maximum Amount; and provided further, however, that (i) no Offshore Rate Loan shall be made which has an Interest Period that extends beyond the Total Facility Termination Date and (ii) each Offshore Rate Loan may be repaid only on the last day of the Interest Period with respect thereto, unless such payment is accompanied by the additional payment, if any, due under SECTION 6.05. The UK Facility Borrowers agree that if at any time the UK Facility Outstandings shall exceed the Total UK Facility Commitment, or the sum of the French Franc Outstandings plus the euro Outstandings shall exceed the Total UK Alternative Currency Commitment, the UK Facility Borrowers shall immediately repay a principal amount of the outstanding UK Facility Loans such that, as a result of such reduction, the Total UK Facility Commitment shall equal or exceed the UK Facility Outstandings, and the Total UK Alternative Currency Commitment shall equal or exceed the sum of the French Franc Outstandings plus the euro Outstandings. (b) AMOUNTS, ADVANCES AND RATE SELECTION. 64 71 (i) The principal amount outstanding on any UK Facility Loan shall be recorded in the UK Facility Agent's records in British Pounds Sterling in the case of a UK Facility Advance of British Pounds Sterling, in French Francs in the case of a UK Facility Advance of French Francs, and in euro in the case of a UK Facility Advance of euro, in each case based on the amount of any UK Facility Advance as reduced from time to time by the amount of any principal payments with respect to such UK Facility Advance. In the case of a UK Facility Advance of French Francs or euro, the UK Facility Agent shall also record the principal amount outstanding on any such UK Facility Loan in British Pounds Sterling, based on the Sterling Equivalent Amount of such UK Facility Advance determined based on the Spot Rate of Exchange as of the date of such Advance, as reduced from time to time by any principal payments with respect thereto. In the event a UK Facility Loan is Continued pursuant to SECTION 3.08, such election shall be treated as a UK Facility Advance in the Applicable Currency of the existing Loan for purposes of this SECTION 3.01, with the Sterling Equivalent Amount of the principal amount of any such Loan in French Francs or euro determined based on the Spot Rate of Exchange as of the date of such Continuation. The UK Facility Agent shall adjust its books to reflect the new Sterling Equivalent Amount of such UK Facility Loan, and in the event that such adjustment would cause the UK Facility Outstandings to exceed the Total UK Facility Commitment, or would cause the sum of the French Franc Outstandings plus the euro Outstandings to exceed the Total UK Alternative Currency Commitment, the UK Facility Borrowers shall, immediately on the effective date of such Continuation, repay the portion of such Continued Loan (applying the new Spot Rate of Exchange) necessary to ensure that thereafter the Total UK Facility Commitment shall equal or exceed the UK Facility Outstandings, and the Total UK Alternative Currency Commitment shall equal or exceed the sum of the French Franc Outstandings plus the euro Outstandings. There shall be no more than ten (10) Offshore Loans outstanding at any one time under the UK Facility. (ii) Other than UK Facility Base Rate Refunding Loans, each UK Facility Loan and each Continuation and Conversion under SECTION 3.08 in British Pounds Sterling shall be in an amount not less than (pound sterling)3,000,000 and if greater in integral multiples of (pound sterling)1,000,000; each UK Facility Loan and each Continuation and Conversion under SECTION 3.08 in French Francs or in euro shall be in an amount not less than the French Franc Equivalent Amount or the euro Equivalent Amount, respectively, of (pound sterling)1,000,000. (iii) For each UK Facility Advance (other than UK Facility Base Rate Refunding Loans) an Authorized Representative shall give the UK Facility Agent at least (A) three (3) Business Days' irrevocable telefacsimile notice prior to 11:00 A.M. (London, England time) of each Offshore Rate Loan in French Francs or in euro representing a borrowing or Continuation or Conversion hereunder, and (B) two (2) Business Days' irrevocable telefacsimile notice prior to 11:00 A.M. (London, England time) of each Offshore Rate Loan in British Pounds Sterling representing a borrowing or Continuation or Conversion hereunder. Each such notice shall be in the form of a Borrowing Notice in the form attached hereto as EXHIBIT D-2, which shall be effective upon receipt by the UK Facility Agent, and shall specify the Type of Loan, whether the Loan is to be made in British Pounds Sterling, euro or French Francs, the amount of the 65 72 UK Facility Advance to be made, the date of borrowing and the Interest Period to be used in the computation of interest. Neither the UK Facility Agent nor any UK Facility Lender shall incur any liability to any UK Facility Borrower in acting upon any notice referred to above which the UK Facility Agent believes in good faith to have been given by an Authorized Representative of such UK Facility Borrower or for otherwise acting in good faith, and upon funding of UK Facility Loans by any UK Facility Lender in accordance with this Agreement pursuant to any such notice, such UK Facility Borrower shall have effected UK Facility Loans hereunder. A Borrowing Notice for an Offshore Rate Loan shall be irrevocable, and UK Facility Borrower giving such notice shall be bound to make a borrowing in accordance therewith, unless such UK Facility Borrower pays to the UK Facility Lenders such amounts as may be due under SECTION 6.05 for failure of a borrowing of an Offshore Rate Loan to occur on the date specified therefor in a Borrowing Notice. The duration of the initial Interest Period for each UK Facility Loan shall be as specified in the initial Borrowing Notice. The UK Facility Borrowers shall have the option to elect the duration of subsequent Interest Periods and to Continue the UK Facility Loans in accordance with SECTION 3.08. If the UK Facility Agent does not receive a notice of election of duration of an Interest Period by the time prescribed hereby and by SECTION 3.08, the applicable UK Facility Borrower shall be deemed to have elected to Continue such Loan as an Offshore Rate Loan with a subsequent Interest Period of one month. (iv) Except as provided in SECTION 3.01(b)(vii) below with respect to UK Facility Base Rate Refunding Loans, notice of receipt of each Borrowing Notice in respect of UK Facility Loans, together with the amount of each UK Facility Lender's portion of an Advance requested thereunder, shall be provided by the UK Facility Agent to each UK Facility Lender by telefacsimile with reasonable promptness, but not later than (A) with respect to UK Facility Advances in British Pounds Sterling, 4:00 P.M. (London, England time) on the day two (2) Business Days prior to the date of such UK Facility Advance as set forth in such Borrowing Notice and (B) with respect to UK Facility Advances in French Francs or euro, 4:00 P.M. (London, England time) on the day three (3) Business Days prior to the date of such UK Facility Advance as set forth in such Borrowing Notice. Notice of the applicable interest rate for the requested UK Facility Advance shall be provided by the UK Facility Agent to each UK Facility Lender by telefacsimile with reasonable promptness, but not later than (C) with respect to UK Facility Advances in British Pounds Sterling, 2:00 P.M. (London, England time) on the date of the UK Facility Advance as set forth in such Borrowing Notice and (D) with respect to UK Facility Advances in French Francs or euro, 2:00 P.M. (London, England time) on the day two (2) Business Days prior to the date of such UK Facility Advance as set forth in such Borrowing Notice. (v) In the case of UK Facility Advances in British Pounds Sterling, each UK Facility Lender shall, pursuant to the terms and subject to the conditions of this Agreement, not later than 12:00 noon (London, England time) on the date specified for such UK Facility Advance, make the amount of the UK Facility Advance to be made by it on such day available to the applicable UK Facility Borrower by depositing or transferring the proceeds thereof in British Pounds Sterling and in Same Day Funds to the 66 73 UK Facility Agent at its Principal Office. The amount so received by the UK Facility Agent shall, subject to the terms of this Agreement, be made available to the applicable UK Facility Borrower by deposit of the proceeds to an account of such UK Facility Borrower maintained at the Principal Office or otherwise as shall be directed in the applicable Borrowing Notice. (vi) In the case of UK Facility Advances in French Francs or euro, each UK Facility Lender shall, pursuant to the terms and subject to the conditions of this Agreement, not later than 9:00 A.M. (London, England time) on the date specified for such UK Facility Advance, make the amount of the UK Facility Advance to be made by it on such day available to the applicable UK Facility Borrower by depositing or transferring the proceeds thereof in French Francs or euro and in Same Day Funds to the account of the UK Facility Agent at the Funding Bank. The amount so received by the Funding Bank shall, subject to the terms of this Agreement and upon instruction from the UK Facility Agent to the Funding Bank on the same day but no later than 9:00 A.M. (London, England time), be made available to the applicable UK Facility Borrower by deposit of the amount of French Francs or euro specified in the related Borrowing Notice to an account of such UK Facility Borrower maintained at the Funding Bank. (vii) Notwithstanding the foregoing, if a demand for payment is made under any Bank Guarantee, such demand for payment is honored by the Applicable Bank Guarantee Issuer, and the UK Facility Borrower shall not immediately fully reimburse on the same Business Day the Applicable Bank Guarantee Issuer in respect of such payment from other funds available to the UK Facility Borrower, (A) provided that the conditions to making a UK Facility Loan as herein provided shall then be satisfied, (I) the Sterling Equivalent Amount of the Reimbursement Obligation arising from such drawing shall be paid to the Applicable Bank Guarantee Issuer by the UK Facility Agent without the requirement of notice to or from the UK Facility Borrower from immediately available funds which shall be advanced as a UK Facility Base Rate Refunding Loan in British Pounds Sterling to the UK Facility Agent at its Principal Office by each UK Facility Lender in a Sterling Equivalent Amount equal to such UK Facility Lender's Applicable Fronting Percentage of such Reimbursement Obligation, and (II) unless the UK Facility Borrower provides a Borrowing Notice to the UK Facility Agent selecting a different interest period, the UK Facility Borrower shall be deemed to have given a Borrowing Notice for a UK Facility Loan in British Pounds Sterling to be made on the day that is two Business Days following the date of such UK Facility Base Rate Refunding Loan in the amount of such UK Facility Base Rate Refunding Loan for an Interest Period of one month and such Borrowing Notice shall be effective notwithstanding any contrary provisions in this Agreement with respect to minimum borrowing amounts, and (B) if the conditions to making a UK Facility Loan as herein provided shall not then be satisfied, each of the UK Facility Lenders shall fund by payment to the UK Facility Agent (for the benefit of the Applicable Bank Guarantee Issuer) at its Principal Office in immediately available funds in British Pounds Sterling the purchase from the Applicable Bank Guarantee Issuer of its respective Participation in the related Reimbursement Obligation based on its respective Applicable Fronting Percentage of the Total Bank Guarantee Commitment. If a demand for payment is made under any Bank Guarantee in accordance 67 74 with the terms thereof and the UK Facility Borrowers shall not immediately reimburse the Applicable Bank Guarantee Issuer in respect thereof on the same Business Day, then notice of such demand or payment shall be provided promptly by the Applicable Bank Guarantee Issuer to the UK Facility Agent and the UK Facility Agent shall provide notice to each UK Facility Lender by telephone or telefacsimile transmission. If notice to the UK Facility Lenders of a demand or payment under any Bank Guarantee is given by the UK Facility Agent at or before 12:00 noon (London, England time) on any Business Day, each UK Facility Lender shall either make a UK Facility Base Rate Refunding Loan or fund the purchase of its Participation as specified above in the Sterling Equivalent Amount of such UK Facility Lender's Applicable Fronting Percentage of such demand or payment and shall pay such amount to the UK Facility Agent for the account of the Applicable Bank Guarantee Issuer at the Principal Office in British Pounds Sterling and in immediately available funds before 2:30 P.M. (London, England time) on the same Business Day. If such notice to the UK Facility Lenders is given by the Agent after 12:00 noon (London, England time) on any Business Day, each UK Facility Lender shall either make such UK Facility Base Rate Refunding Loan or fund such purchase before 12:00 noon (London, England time) on the next following Business Day. 3.02 PAYMENT OF INTEREST. (a) The UK Facility Borrowers shall pay interest to the UK Facility Agent for the account of each UK Facility Lender on the outstanding and unpaid principal amount of each UK Facility Loan made by such UK Facility Lender for the period commencing on the date of such UK Facility Loan until such Loan shall be paid or Continued, as the case may be, at the then applicable Offshore Rate, such payments to be made (i) in British Pounds Sterling with respect to UK Facility Loans made in British Pounds Sterling, (ii) in French Francs with respect to UK Facility Loans made in French Francs (subject to SECTION 6.09(e)), and (iii) in euro with respect to UK Facility Loans made in euro (subject to SECTION 6.09(e)); PROVIDED, however, that if any Event of Default shall have occurred and be continuing, all amounts outstanding hereunder shall bear interest thereafter at the Default Rate. (b) Interest on each UK Facility Loan shall be computed on the basis of a year of 365 days for Advances in British Pounds Sterling and 360 days for Advances in French Francs or euro and calculated for the actual number of days elapsed. Interest on each UK Facility Loan shall be paid (i) on the last day of the applicable Interest Period for each such Offshore Rate Loan and, if the Interest Period extends for more than three months, also at intervals of three months after the first day of the Interest Period and (ii) upon payment in full of the principal of each such Loan. Interest on amounts not paid when due shall be payable on demand. 3.03 PAYMENT OF PRINCIPAL. The principal amount of each UK Facility Loan shall be due and payable to the UK Facility Agent for the benefit of each UK Facility Lender in full on the Total Facility Termination Date. The principal amount of any Offshore Rate Loan may be prepaid only at the end of the applicable Interest Period unless the UK Facility Borrowers shall pay to the UK Facility Agent for the account of the UK Facility Lenders the additional amount, if any, required under SECTION 6.05 and, in the case of a prepayment of any Offshore Rate Loan in 68 75 French Francs or euro, the applicable UK Facility Borrower notifies the UK Facility Agent at least three (3) Business Days prior to such prepayment. All prepayments of UK Facility Loans made by the UK Facility Borrowers shall be in the Applicable Currency of the respective UK Facility Loan (subject to SECTION 6.09(e)) in the amount of (i) (pound sterling)1,000,000 (or the French Franc Equivalent Amount thereof if in French Francs, or the euro Equivalent Amount thereof if in euro) or (ii) such greater amount which is an integral multiple of (pound sterling)500,000 (or the French Franc Equivalent Amount thereof if in French Francs, or the euro Equivalent Amount thereof if in euro), or (iii) the amount equal to all UK Facility Outstandings, or (iv) such other amount as necessary to comply with SECTION 3.01(a) or 3.07. 3.04 MANNER OF PAYMENT. (a) Each payment of principal (including any prepayment) and payment of interest and fees in respect of UK Facility Loans, and any other amount required to be paid to the UK Facility Lenders with respect to the UK Facility Loans, shall be made to the UK Facility Agent at its Principal Office, for the account of each UK Facility Lender's Applicable Lending Office, to be recorded in British Pounds Sterling and, if applicable, French Francs or euro, as set forth in SECTION 3.01(b). Each such payment shall be made in the Applicable Currency of the UK Facility Loan in Same Day Funds before 1:00 P.M. (London, England time) on the date such payment is due. The UK Facility Agent may, but shall not be obligated to, debit the amount of any such payment which is not made by such time to any ordinary deposit account, if any, of the applicable UK Facility Borrower with the UK Facility Agent. The UK Facility Borrowers shall give the UK Facility Agent prior telephonic notice of any payment of principal, such notice to be given by (i) not later than 11:00 A.M. (London, England time) at least two (2) Business Days prior to the date of such payment in the case of payment of a UK Facility Loan in British Pounds Sterling and (ii) not later than 11:00 A.M. (London, England time) at least three (3) Business Days prior to the date of such payment in the case of payment of a UK Facility Loan in French Francs or euro. (b) The UK Facility Agent shall deem any payment by or on behalf of the UK Facility Borrowers hereunder that is not made both (i) in British Pounds Sterling in the case of UK Facility Loans made in British Pounds Sterling, in French Francs in the case of UK Facility Loans made in French Francs, or in euro in the case of UK Facility Loans made in euro (the foregoing subject to SECTION 6.09(e)) and, in either case, in Same Day Funds and (ii) prior to 1:00 P.M. (London, England time) to be a non-conforming payment. Any such payment shall not be deemed to be received by the UK Facility Agent until the later of (x) the time such funds become available funds in the required Applicable Currency and (y) the next Business Day. The UK Facility Agent shall give prompt telephonic notice to the applicable Authorized Representative and each of the UK Facility Lenders (confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of SECTION 11.01(a) and 11.01(b). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding Business Day) at the Default Rate or the maximum rate permitted by applicable law, whichever is lower, from the date such amount was due and payable until the date such amount is paid in full. 69 76 (c) In the event that any payment hereunder becomes due and payable on a day other than a Business Day, then such due date shall be extended to the next succeeding Business Day unless otherwise provided under clause (ii) of the definition of "Interest Period"; provided that interest shall continue to accrue during the period of any such extension. 3.05 EVIDENCE OF INDEBTEDNESS. Each UK Facility Borrower hereby authorizes each UK Facility Lender and the UK Facility Agent to record, from time to time, in its records, the date and amount of each UK Facility Loan; the interest rates payable by the applicable UK Facility Borrower in respect of each UK Facility Loan and any Interest Period applicable thereto; the dates and amounts of all payments received by such UK Facility Lender on account of principal, interest and fees; and the amount of all the UK Facility Loans which remain payable by the UK Facility Borrowers to such UK Facility Lender. All amounts and other information so recorded shall be prima facie evidence thereof. The failure to record, or any error in recording, any such amount or other information shall not limit or impair the obligations of the UK Facility Borrowers hereunder or under any Loan Document. 3.06 PRO RATA PAYMENTS. Except as otherwise provided herein, (a) each payment on account of the principal of and interest on the UK Facility Loans shall be made to the UK Facility Agent for the account of the UK Facility Lenders pro rata based on their Applicable Fronting Percentages for the UK Facility, (b) all payments to be made by the UK Facility Borrowers for the account of each of the UK Facility Lenders on account of principal, interest and fees shall be made without diminution, set-off, recoupment, counterclaim or, except as set forth in SECTION 6.06(a), deduction, and (c) the UK Facility Agent will promptly distribute payments received to the UK Facility Lenders. Notwithstanding the foregoing, in the event any UK Facility Lender shall not be able to make an Eurodollar Rate Loan under the circumstances provided in SECTION 6.01 or 6.03, interest shall be allocated to such UK Facility Lender according to the interest rate payable to such UK Facility Lender as set forth in SECTION 6.04. 3.07 REDUCTIONS. The UK Facility Borrowers shall, by notice from an Authorized Representative, have the right from time to time (but not more frequently than once during each fiscal quarter), upon not less than ten (10) Business Days' written notice to the UK Facility Agent, effective upon receipt, to reduce the Total UK Facility Commitment. The UK Facility Agent shall give each UK Facility Lender, within one (1) Business Day, telefacsimile notice, or telephonic notice (confirmed in writing), of such reduction. Each such reduction shall be in the aggregate amount of (pound sterling)1,000,000 or such greater amount which is in an integral multiple of (pound sterling)500,000, or the entire remaining Total UK Facility Commitment, and shall permanently reduce the Total UK Facility Commitment. No such reduction shall result in the payment of any Offshore Rate Loan other than on the last day of the Interest Period of such Loan unless such prepayment is accompanied by amounts due, if any, under SECTION 6.05. Each such reduction of the Total UK Facility Commitment shall be accompanied by payment of the principal amount of the UK Facility Loans to the extent that the UK Facility Outstandings exceed the Total UK Facility Commitment, or to the extent that the sum of the French Franc Outstandings plus the euro Outstandings exceeds the Total UK Alternative Currency Commitment, in each case after giving effect to such reduction, together with accrued and unpaid interest on the amounts prepaid. Any reduction of the Total UK Facility Commitment hereunder shall result, ipso facto, 70 77 in a pro rata reduction of the Total UK Alternative Currency Commitment so that, as reduced, the Sterling Equivalent Amount of the Total UK Alternative Currency Commitment shall at all times remain equal to 50% of the Total UK Facility Commitment. 3.08 CONVERSIONS AND ELECTIONS OF SUBSEQUENT INTEREST PERIODS. Subject to the limitations set forth below and in ARTICLE VI hereof, and provided that no Default or Event of Default shall have occurred and be continuing, the UK Facility Borrowers may, upon three (3) Business Days' notice to the UK Facility Agent prior to 11:00 A.M. (London, England time) in the case of an Offshore Rate Loan in British Pounds Sterling and four (4) Business Days' notice to the UK Facility Agent prior to 11:00 A.M. (London, England time) in the case of an Offshore Rate Loan in French Francs or in euro, elect a subsequent Interest Period for all or a portion of Offshore Rate Loans under the UK Facility to begin on the last day of the then current Interest Period for such Offshore Rate Loans. Notice of any such Continuations shall be effected by receipt of an appropriate Borrowing Notice and shall specify the effective date of such Continuation and the Interest Period to be applicable to the UK Facility Loan as Continued. Each Continuation pursuant to this SECTION 3.08 shall be subject to the limitations on Offshore Rate Loans set forth in the definition of "Interest Period" herein and in SECTION 3.01 and 3.03 and ARTICLE VI hereof. All such Continuations of UK Facility Loans shall be effected pro rata based on the Applicable Fronting Percentages of the UK Facility Lenders for the UK Facility and shall be in the same currency as the original such Loan. 3.09 FACILITY FEE. For the period beginning on the Closing Date and ending on the Total Facility Termination Date, the Company agrees to pay to the US Facility Agent, and the US Facility Agent shall then pay to each Lender at its office in the United States so designated thereby based on such Lender's Applicable Commitment Percentage, a Facility Fee equal to the Applicable Margin for Facility Fees multiplied by the Total UK Facility Commitment. Such payments of Facility Fees provided for in this SECTION 3.09 shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December beginning September 30, 2000 to and on the Total Facility Termination Date. Notwithstanding the foregoing, so long as any UK Facility Lender fails to make available any portion of its UK Facility Fronting Commitment when properly requested by a UK Facility Borrower, such Lender shall not be entitled to receive payment of its pro rata share of such Facility Fee until such Lender shall make available such portion. Such Facility Fee shall be calculated on the basis of a year of 365 days for the actual number of days elapsed. 3.10 DEFICIENCY ADVANCES. No UK Facility Lender shall be responsible for any default of any other UK Facility Lender in respect to such other UK Facility Lender's obligation to make any UK Facility Loan hereunder or to fund its purchase of any Participation hereunder nor shall the UK Facility Fronting Commitment or Bank Guarantee Commitment of any UK Facility Lender or the UK Facility Commitment of any Lender be increased as a result of such default of any other UK Facility Lender. Without limiting the generality of the foregoing, in the event any UK Facility Lender shall fail to advance funds to a UK Facility Borrower as herein provided, the UK Facility Agent may in its discretion, but shall not be obligated to, make a UK Facility Advance hereunder as a UK Facility Lender of all or any portion of such amount or amounts (each, a "deficiency advance") and shall thereafter be entitled to payments of principal of and interest on such deficiency advance in the same manner and at the same interest rate or rates to 71 78 which such other UK Facility Lender would have been entitled had it made such an advance; provided that, upon payment to the UK Facility Agent from such other UK Facility Lender of the entire outstanding amount of each such deficiency advance, together with accrued and unpaid interest thereon, from the most recent date or dates interest was paid to the UK Facility Agent by the applicable UK Facility Borrower on each UK Facility Loan comprising the deficiency advance, at the interest rate per annum equal to the UK Overnight Rate, then such payment shall be credited against the applicable UK Facility Outstanding owing to the UK Facility Agent in full payment of such deficiency advance and the applicable UK Facility Borrower shall be deemed to have borrowed the amount of such deficiency advance from such other UK Facility Lender as of the most recent date or dates, as the case may be, upon which any payments of interest were made by such UK Facility Borrower thereon. 3.11 USE OF PROCEEDS. The proceeds of the UK Facility Loans made pursuant to the UK Facility hereunder shall be used by the UK Facility Borrowers to finance capital expenditures and Permitted Acquisitions and for other working capital and general corporate needs of the UK Facility Borrowers. 3.12 ONE LOAN. (a) Subject to subsection (c) below, all UK Facility Loans, Reimbursement Obligations arising from Bank Guarantees and UK Facility Advances by the UK Facility Lenders to any UK Facility Borrower shall constitute the joint and several general obligation of each of the UK Facility Borrowers. Each UK Facility Borrower shall be jointly and severally liable to the UK Facility Agent and the UK Facility Lenders for all Obligations hereunder in respect of the UK Facility, regardless of whether such Obligations arise as a result of UK Facility Advances to such Borrower, it being stipulated and agreed that UK Facility Advances hereunder to any UK Facility Borrower inure to the benefit of each of the UK Facility Borrowers, and that the UK Facility Lenders are relying on the joint and several liability of the UK Facility Borrowers in extending credit under the UK Facility. (b) Subject to subsection (c) below, each UK Facility Borrower guarantees to the UK Facility Lenders the payment in full of all of the Obligations of the other UK Facility Borrowers to the UK Facility Lenders in respect of UK Facility and further guarantees the due performance by each other UK Facility Borrower of its respective duties and covenants made in favor of the UK Facility Agent and the UK Facility Lenders hereunder. Each UK Facility Borrower agrees that the joint and several liability of the UK Facility Borrowers shall not be impaired or affected by any modification, supplement, extension or amendment of any contract or agreement to which the parties thereto may hereafter agree, nor by any modification, release or other alteration of any of the rights of the UK Facility Agent and the UK Facility Lenders with respect to any collateral, nor by any delay, extension of time, renewal, compromise or other indulgence granted by the UK Facility Agent and the UK Facility Lenders with respect to any of the Obligations, nor by any other agreements or arrangements whatever with any other UK Facility Borrower, any guarantor or any other Person, each UK Facility Borrower hereby waiving all notice of any such delay, extension, release, substitution, renewal, compromise or other indulgence, and hereby consenting to be bound thereby as fully and effectually as if it had expressly agreed thereto in advance. The liability of each UK Facility Borrower hereunder is direct and unconditional as to all of the 72 79 Obligations hereunder in respect of the UK Facility, and may be enforced without requiring the UK Facility Agent or the UK Facility Lenders first to resort to any other right, remedy or security; no UK Facility Borrower shall have any right of subrogation, reimbursement or indemnity whatsoever, nor any right of recourse to security for any of the Obligations in respect of the UK Facility, unless and until all of said Obligations have been paid in full. (c) Notwithstanding subsections (a) and (b) above, the joint and several liability of each UK Facility Borrower for, and its obligation to guarantee payment of all Obligations of, the other UK Facility Borrowers in respect of the UK Facility shall not at any time exceed its UK Facility Maximum Amount. 3.13 PARTICIPATIONS. On the Closing Date and each day thereafter until the Total Facility Termination Date, each Lender (including a UK Facility Lender if necessary) will be deemed to have absolutely, irrevocably and unconditionally purchased from each UK Facility Lender a Participation in UK Facility Outstandings owing to such UK Facility Lender (including in such UK Facility Outstandings all Participations of such UK Facility Lender in Reimbursement Obligations) in an amount such that, after such purchase, each Lender will have a Facility Credit Exposure under the UK Facility equal in amount to its Applicable Commitment Percentage multiplied by the UK Facility Outstandings (referred to as the "Facility Participation Amount" for such Lender in the UK Facility). Each such Participation of each Lender in the UK Facility shall be funded in accordance with SECTION 11.07. 73 80 ARTICLE IIIA Bank Guarantees 3A.01 BANK GUARANTEES. Each Bank Guarantee Issuer agrees, subject to the terms and conditions of this Agreement and in reliance upon the agreements of the other UK Facility Lenders set forth in this ARTICLE IIIA and in SECTION 3.01, upon request of a UK Facility Borrower to issue from time to time for the account of the UK Facility Borrower Bank Guarantees in British Pounds Sterling upon delivery to such Bank Guarantee Issuer of a Bank Guarantee Issuance Agreement relating thereto in form and content acceptable to such Bank Guarantee Issuer; provided, that (i) no Bank Guarantee Issuer shall be obligated to, and shall not, issue (or renew) any Bank Guarantee if it has been notified by the UK Facility Agent or has actual knowledge that a Default or Event of Default has occurred and is continuing, (ii) the Bank Guarantee Outstandings shall not exceed the Total Bank Guarantee Commitment, (iii) no Bank Guarantee shall be issued (or renewed) if, after giving effect thereto, the Sterling Equivalent Amount of UK Facility Outstandings would exceed the Total UK Facility Commitment, (iv) Bank One, NA, London Branch shall not be obligated to issue Bank Guarantees in excess of "6,400,000 and (v) Barclays Bank Plc shall not be obligated to issue Bank Guarantees in excess of "700,000. No Bank Guarantee shall have an expiry date (including all rights of the UK Facility Borrower or any beneficiary named in such Bank Guarantee to require renewal) or payment date occurring later than the earlier to occur of one year after the date of its issuance or the seventh Business Day prior to the then applicable Total Facility Termination Date. 3A.02 REIMBURSEMENT AND PARTICIPATIONS. (a) The UK Facility Borrowers hereby unconditionally agree to pay to the Applicable Bank Guarantee Issuer immediately on demand on the same Business Day at the Principal Office of the UK Facility Agent all amounts required to be paid by the Applicable Bank Guarantee Issuer to the beneficiary of any Bank Guarantee and all reasonable expenses incurred by the Applicable Bank Guarantee Issuer in connection with the Bank Guarantees, and in any event and without demand to place in possession of the Applicable Bank Guarantee Issuer (which shall include UK Facility Base Rate Refunding Loans if permitted by SECTION 3.01) sufficient funds to pay all debts and liabilities arising under any Bank Guarantee. Each Bank Guarantee Issuer agrees to give the UK Facility Borrower prompt notice of any request for a draw under a Bank Guarantee. Each Bank Guarantee Issuer may charge any account any UK Facility Borrower may have with it for any and all amounts such Bank Guarantee Issuer pays under a Bank Guarantee, plus charges and reasonable expenses as from time to time agreed to by such Bank Guarantee Issuer and the UK Facility Borrowers; provided that to the extent permitted by SECTION 3.01(b)(vii), amounts shall be paid pursuant to UK Facility Base Rate Refunding Loans. The UK Facility Borrowers agree to pay the Applicable Bank Guarantee Issuer interest on any Reimbursement Obligations arising from Bank Guarantees not paid when due hereunder at the Default Rate. (b) Each Bank Guarantee Issuer shall promptly notify the UK Facility Agent of any Bank Guarantee issued by such Bank Guarantee Issuer. In accordance with the provisions of 74 81 SECTION 3.01(b)(vii), the Applicable Bank Guarantee Issuer shall notify the UK Facility Agent of any demand and payment under any Bank Guarantee promptly following the receipt of such demand and payment thereof by the Applicable Bank Guarantee Issuer. (c) Each UK Facility Lender (other than the Applicable Bank Guarantee Issuer) shall automatically acquire on the date of issuance thereof, a Participation in the liability of the Applicable Bank Guarantee Issuer in respect of each Bank Guarantee in an amount equal to such Lender's Applicable Fronting Percentage of such liability, and to the extent that the UK Facility Borrowers are obligated to pay the Applicable Bank Guarantee Issuer under SECTION 3A.02(a), each UK Facility Lender (other than the Applicable Bank Guarantee Issuer) thereby shall absolutely, unconditionally and irrevocably assume, and shall be unconditionally obligated to pay to the Applicable Bank Guarantee Issuer, its Applicable Fronting Percentage of the liability of the Applicable Bank Guarantee Issuer under such Bank Guarantee in the manner and with the effect provided in SECTION 3.01(b)(vii). (d) Simultaneously with the making of each payment by a UK Facility Lender to the Applicable Bank Guarantee Issuer pursuant to SECTION 3.01(b)(vii)(B), such UK Facility Lender shall, automatically and without any further action on the part of the Applicable Bank Guarantee Issuer or such UK Facility Lender, acquire a Participation in an amount equal to such payment (excluding the portion thereof constituting interest accrued prior to the date the UK Facility Lender made its payment) in the related Reimbursement Obligation of the UK Facility Borrower. Each UK Facility Lender's obligation to make payment to the UK Facility Agent for the account of the Applicable Bank Guarantee Issuer pursuant to SECTION 3.01(b)(vii) and SECTION 3A.02(c), and the right of the Applicable Bank Guarantee Issuer to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and shall be made without any offset, abatement, withholding or reduction whatsoever. In the event the UK Facility Lenders have purchased Participations in any Reimbursement Obligation as set forth above, then at any time payment (in fully collected, immediately available funds) of such Reimbursement Obligation, in whole or in part, is received by the Applicable Bank Guarantee Issuer from a UK Facility Borrower, the Applicable Bank Guarantee Issuer shall promptly pay to each UK Facility Lender an amount equal to its Applicable Fronting Percentage of such payment from the UK Facility Borrower. (e) Promptly following the end of each calendar quarter, each Bank Guarantee Issuer shall deliver to the UK Facility Agent a notice describing the aggregate amount of all Bank Guarantees at the end of such quarter. The UK Facility Agent shall deliver to each UK Facility Lender a report on a quarterly basis of the aggregate Bank Guarantee Outstandings at the end of each calendar quarter. Upon the request of any UK Facility Lender from time to time, each Bank Guarantee Issuer shall deliver to the UK Facility Agent, and the UK Facility Agent shall deliver to such UK Facility Lender, any other information reasonably requested by such UK Facility Lender with respect to each Bank Guarantee outstanding. (f) The issuance by the Applicable Bank Guarantee Issuer of each Bank Guarantee shall, in addition to the conditions precedent set forth in ARTICLE VII, be subject to the conditions that (x) such Bank Guarantee be in such form and contain such terms as shall be reasonably satisfactory to the Applicable Bank Guarantee Issuer consistent with the then current practices 75 82 and procedures of the Applicable Bank Guarantee Issuer with respect to similar bank guarantees, (y) the issuance of such Bank Guarantee shall not violate any policy of the Applicable Bank Guarantee Issuer, and (z) the UK Facility Borrowers shall have executed and delivered such other instruments and agreements relating to such Bank Guarantees as the Applicable Bank Guarantee Issuer shall have reasonably requested consistent with such practices and procedures and shall not be in conflict with any of the express terms herein contained. (g) The UK Facility Borrowers agree that the Applicable Bank Guarantee Issuer may, in its sole discretion, accept or pay, as complying with the terms of any Bank Guarantee, any demand for payment which may be made by any beneficiary of any Bank Guarantee including by an administrator, executor, trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver, attorney-in-fact or other legal representative of a beneficiary who is authorized under such Bank Guarantee to demand payment. (h) Without limiting the generality of the provisions of SECTION 13.10, the UK Facility Borrowers hereby agree to indemnify and hold harmless the Applicable Bank Guarantee Issuer, each other UK Facility Lender and the UK Facility Agent from and against any and all claims and damages, losses, liabilities, reasonable costs and expenses which the Applicable Bank Guarantee Issuer, such other UK Facility Lender or the UK Facility Agent may incur (or which may be claimed against the Applicable Bank Guarantee Issuer, such other UK Facility Lender or the UK Facility Agent) by any Person by reason of or in connection with the issuance or transfer of or payment or failure to pay under any Bank Guarantee; provided that the UK Facility Borrower shall not be required to indemnify the Applicable Bank Guarantee Issuer, any other UK Facility Lender or the UK Facility Agent for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, (i) caused by the willful misconduct or gross negligence of the party to be indemnified or (ii) caused by the failure of the Applicable Bank Guarantee Issuer to pay under any Bank Guarantee after a demand for payment strictly complying with the terms and conditions of such Bank Guarantee, unless such payment is prohibited by any law, regulation, court order or decree. The indemnification and hold harmless provisions of this SECTION 3A.02(h) shall survive repayment of the Obligations, occurrence of the Total Facility Repayment Date and expiration or termination of this Agreement. (i) Without limiting the UK Facility Borrowers' rights as set forth in SECTION 3A.02(h), the obligation of the UK Facility Borrowers to immediately reimburse the Applicable Bank Guarantee Issuer for payments made under Bank Guarantees and the Applicable Bank Guarantee Issuer's right to receive such payment shall be absolute, unconditional and irrevocable, and such obligations of the UK Facility Borrowers shall be performed strictly in accordance with the terms of this Agreement and such Bank Guarantee and the related Bank Guarantee Issuance Agreement for any Bank Guarantee, under all circumstances whatsoever, including the following circumstances: (i) any lack of validity or enforceability of the Bank Guarantee, the obligation supported by the Bank Guarantee or any other agreement or instrument relating thereto (collectively, the "Related Bank Guarantee Documents"); 76 83 (ii) any amendment or waiver of or any consent to or departure from all or any of the Related Bank Guarantee Documents; (iii) the existence of any claim, setoff, defense (other than the defense of payment in accordance with the terms of this Agreement) or other rights which any UK Facility Borrower may have at any time against any beneficiary or any transferee of a Bank Guarantee (or any Persons for whom any such beneficiary or any such transferee may be acting), the UK Facility Agent, the UK Facility Lenders, the Applicable Bank Guarantee Issuer or any other Person, whether in connection with the Loan Documents, the Related Bank Guarantee Documents or any unrelated transaction; (iv) any breach of contract or other dispute between a UK Facility Borrower and any beneficiary or any transferee of a Bank Guarantee (or any Persons for whom such beneficiary or any such transferee may be acting), the UK Facility Agent, the UK Facility Lenders or any other Person; (v) any demand, statement or any other document presented under the Bank Guarantee proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever so long as any such document appeared to comply with the terms of the Bank Guarantee; (viii) the existence, character, quality, quantity, condition, value, or delivery (including the time, place, manner or order thereof) of property described or purportedly described in documents presented in connection with any Bank Guarantee or the existence, nature or extent of any insurance relating thereto; (ix) any delay, extension of time, renewal, compromise or other indulgence or modification granted or agreed to by the UK Facility Agent, with or without notice to or approval by the UK Facility Borrowers in respect of any of the Obligations; or (viii) any other circumstance or happening whatsoever where the Applicable Bank Guarantee Issuer has acted in good faith, whether or not similar to any of the foregoing. 3A.03 GOVERNMENTAL ACTION. No Bank Guarantee Issuer shall be under any obligation to issue any Bank Guarantee if any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Bank Guarantee Issuer from issuing such Bank Guarantee, or any law applicable to such Bank Guarantee Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Bank Guarantee Issuer shall prohibit, or request that such Bank Guarantee Issuer refrain from, the issuance of bank guarantees generally or such Bank Guarantee in particular or shall impose upon such Bank Guarantee Issuer with respect to such Bank Guarantee any restriction, reserve or capital requirement (for which such Bank Guarantee Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such Bank Guarantee any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such Bank Guarantee Issuer in good faith deems material to it. 77 84 3A.04 BANK GUARANTEE FACILITY FEES. The UK Facility Borrowers shall pay to the UK Facility Agent, for the pro rata benefit of the UK Facility Lenders based on their Applicable Fronting Percentages, a fee on the amount of the aggregate amount available for payment under each outstanding Bank Guarantee at a rate equal to the Applicable Margin for Fixed Rate Loans under the UK Facility. Such fees shall be due and payable with respect to each Bank Guarantee quarterly in arrears on the last day of each March, June, September and December, the first such payment to be made on the first such date occurring after the date of issuance of a Bank Guarantee. 3A.05 BANK GUARANTEE FRONTING AND ADMINISTRATIVE FEES. The UK Facility Borrowers shall pay to the Applicable Bank Guarantee Issuer a fronting fee of 0.125% per annum on the initial aggregate amount available for payment under each outstanding Bank Guarantee, such fee to be due and payable in full with respect to each Bank Guarantee on the date of the issuance (except with respect to Existing Bank Guarantees) or renewal thereof. The UK Facility Borrowers shall also pay to the Applicable Bank Guarantee Issuer such administrative fee and other fees, if any, in connection with the Bank Guarantees in such amounts and at such times as the Applicable Bank Guarantee Issuer and the UK Facility Borrowers shall agree from time to time. 78 85 ARTICLE IV The Canadian Facility 4.01 ADVANCES. (a) COMMITMENT. Subject to the terms and conditions of this Agreement, each Canadian Facility Lender severally agrees to make, on behalf of all the Lenders, Canadian Facility Advances in Canadian Dollars to the Canadian Facility Borrower from time to time from the Closing Date until (i) the Total Facility Termination Date in the case of the Canadian Facility Full Maturity Tranche and (ii) the Canadian Facility Renewable Tranche Termination Date in the case of the Canadian Facility Renewable Tranche, in each case on a pro rata basis as to the total borrowing requested by the Canadian Facility Borrower on any day determined by such Canadian Facility Lender's Applicable Fronting Percentage for the Canadian Facility, up to but not exceeding (A) in the case of Advances under the Canadian Facility Renewable Tranche, the Canadian Facility Renewable Tranche Fronting Commitment of such Canadian Facility Lender, and (B) in the case of Advances under the Canadian Facility Full Maturity Tranche, the Canadian Facility Full Maturity Tranche Fronting Commitment of such Canadian Facility Lender, and each Lender shall have a Participation in each such Canadian Facility Advance pursuant to SECTION 4.14 equal in amount to its Applicable Commitment Percentage times such Canadian Facility Advance; provided, however, that the Canadian Facility Lenders will not be required and shall have no obligation to make any Canadian Facility Advance (x) so long as a Default or an Event of Default has occurred and is continuing or (y) if the Lenders have accelerated the maturity of the Obligations as a result of an Event of Default; provided further, however, that immediately after giving effect to each such Canadian Facility Advance, (I) the Canadian Facility Outstandings shall not exceed the Total Canadian Facility Commitment, (II) the Canadian Facility Renewable Tranche Outstandings shall not exceed the Canadian Facility Renewable Tranche Commitment, and (III) the Canadian Facility Full Maturity Tranche Outstandings shall not exceed the Canadian Facility Full Maturity Tranche Commitment. Within such limits, the Canadian Facility Borrower may borrow, repay and reborrow Canadian Facility Loans hereunder, on a Business Day, from the Closing Date until, but (as to borrowings and reborrowings) not including, (i) the Total Facility Termination Date in the case of the Canadian Facility Full Maturity Tranche and (ii) the Canadian Facility Renewable Tranche Termination Date in the case of the Canadian Facility Renewable Tranche; provided, however, that (A) no Canadian Facility BA Rate Loan shall be made which has an Interest Period or maturity that extends beyond the Total Facility Termination Date, in the case of the Canadian Facility Full Maturity Tranche, or the Canadian Facility Renewable Tranche Termination Date, in the case of the Canadian Facility Renewable Tranche, and (B) each Canadian Facility BA Rate Loan may be repaid only on the last day of the Interest Period with respect thereto, unless such prepayment is accompanied by the additional payment, if any, due under SECTION 6.05. The Canadian Facility Borrower agrees that if at any time (x) the Canadian Facility Outstandings shall exceed the Total Canadian Facility Commitment, (y) the Canadian Facility Renewable Tranche Outstandings shall exceed the Canadian Facility Renewable Tranche Commitment, or (z) the Canadian Facility Full Maturity Tranche Outstandings shall exceed the Canadian Facility Full Maturity Tranche Commitment, then in any such case the Canadian Facility Borrower shall immediately repay a 79 86 principal amount of the outstanding Canadian Facility Loans such that, as a result of such reduction, (I) the Total Canadian Facility Commitment shall equal or exceed the Canadian Facility Outstandings, (II) the Canadian Facility Renewable Tranche Commitment shall equal or exceed the Canadian Facility Renewable Tranche Outstandings and (III) the Canadian Facility Full Maturity Tranche Commitment shall equal or exceed the Canadian Facility Full Maturity Tranche Outstandings. (b) AMOUNTS, ADVANCES AND RATE SELECTION. (i) The principal amount outstanding on any Canadian Facility Loan shall be recorded in the Canadian Facility Agent's records in Canadian Dollars, based on the amount of any Canadian Facility Advance as reduced from time to time by the amount of any principal payments with respect to such Canadian Facility Loan. In the event a Canadian Facility Loan is Continued or Converted pursuant to SECTION 4.08, such election shall be treated as a Canadian Facility Advance for purposes of this SECTION 4.01. There shall be no more than ten (10) Canadian Facility BA Rate Loans outstanding at any one time under the Canadian Facility. (ii) Each Canadian Facility Loan and each Continuation and Conversion under SECTION 4.08 shall be in an amount not less than CAN $2,000,000 and, if greater, in integral multiples of CAN $100,000. (iii) For each Canadian Facility Advance, an Authorized Representative of the Canadian Facility Borrower shall give the Canadian Facility Agent (A) at least two (2) Business Days' irrevocable telefacsimile notice prior to 10:00 A.M. (Toronto, Canada time) of each Canadian Facility BA Rate Loan representing a borrowing or Continuation or Conversion hereunder and (B) at least two (2) Business Days' irrevocable telefacsimile notice prior to 10:00 A.M. (Toronto, Canada time) of each Canadian Facility Base Rate Loan representing a borrowing or Conversion hereunder. Each such notice shall be in the form of a Borrowing Notice in the form attached hereto as EXHIBIT D-3, which shall be effective upon receipt by the Canadian Facility Agent, and shall specify the Type of Canadian Facility Loan (Canadian Facility BA Rate or Canadian Facility Base Rate), the amount of the Canadian Facility Advance to be made, whether such advance is under the Canadian Facility Renewable Tranche or the Canadian Facility Full Maturity Tranche, the date of borrowing and the Interest Period (if a Canadian Facility BA Rate Loan) to be used in the computation of interest. Neither the Canadian Facility Agent nor any Canadian Facility Lender shall incur any liability to any Canadian Facility Borrower in acting upon any notice referred to above which the Canadian Facility Agent believes in good faith to have been given by an Authorized Representative of the Canadian Facility Borrower or for otherwise acting in good faith, and upon funding of Canadian Facility Loans by any Canadian Facility Lender in accordance with this Agreement pursuant to any such notice, such Canadian Facility Borrower shall have effected Canadian Facility Loans hereunder. A Borrowing Notice for a Canadian Facility BA Rate Loan shall be irrevocable, and the Canadian Facility Borrower shall be bound to make a borrowing in accordance therewith, unless such Canadian Facility Borrower pays to the Canadian Facility Lenders such amounts as may be due under SECTION 6.05 for failure of a 80 87 borrowing of a Canadian Facility BA Rate Loan to occur on the date specified therefor in the related Borrowing Notice. The duration of the initial Interest Period for each Canadian Facility BA Rate Loan shall be as specified in the initial Borrowing Notice. The Canadian Facility Borrower shall have the option to elect the duration of subsequent Interest Periods and to Continue or Convert the Loans in accordance with SECTION 4.08. If the Canadian Facility Agent does not receive a notice of election of the duration of an Interest Period or of the Conversion of a Loan by the time prescribed hereby and by SECTION 4.08, the Canadian Facility Borrower shall be deemed to have elected to Convert such Loan to or Continue such Loan as a Canadian Facility Base Rate Loan until the Canadian Facility Borrower notifies the Canadian Facility Agent in accordance with SECTION 4.08. (iv) Notice of receipt of each Borrowing Notice in respect of Canadian Facility Loans shall be provided by the Canadian Facility Agent to each Canadian Facility Lender by telefacsimile with reasonable promptness, but not later than 12:00 noon (Toronto, Canada time) on the same day as the Canadian Facility Agent's receipt of such notice from the Canadian Facility Borrower so long as receipt is prior to 10:00 A.M. (Toronto, Canada time). The Canadian Facility Agent shall determine the Canadian Facility Fixed BA Rate for a Canadian Facility BA Rate Loan at 10:00 A.M. (Toronto, Canada time) on the day of such proposed Canadian Facility Fixed BA Rate, and not later than 12:00 noon (Toronto, Canada time) on such date, the Canadian Facility Agent shall provide the Canadian Facility Borrower and each Canadian Facility Lender notice by telefacsimile transmission of the amount of the Canadian Facility Loan or Loans required to be made by each Canadian Facility Lender on such date, and the applicable Canadian Facility Fixed BA Rate. (v) Not later than 12:00 noon (Toronto, Canada time) on the date specified for each Canadian Facility Advance, each Canadian Facility Lender shall, pursuant to the terms and subject to the conditions of this Agreement, make the amount of the Canadian Facility Advance or Advances to be made by it on such day available to the Canadian Facility Borrower by depositing or transferring the proceeds thereof in Canadian Dollars and Same Day Funds to the Canadian Facility Agent at the Principal Office. The amount so received by the Canadian Facility Agent shall, subject to the terms of this Agreement, on the same day be made available to the Canadian Facility Borrower by delivery to the Canadian Facility Borrower's account with the Canadian Facility Agent. 4.02 PAYMENT OF INTEREST. (a) The Canadian Facility Borrower shall pay interest to the Canadian Facility Agent for the account of each Canadian Facility Lender on the outstanding and unpaid principal amount of each Canadian Facility Loan made by such Canadian Facility Lender for the period commencing on the date of such Canadian Facility Loan until such Loan shall be paid, Continued or Converted, as the case may be, at the then applicable Canadian Facility Base Rate for Canadian Facility Base Rate Loans or applicable Canadian Facility Fixed BA Rate for Canadian Facility BA Rate Loans, such payments to be made in Canadian Dollars; provided, 81 88 however, that if any Event of Default shall have occurred and be continuing, all amounts outstanding hereunder shall bear interest thereafter at the Default Rate. The Canadian Facility Agent's certificate as to each rate of interest payable hereunder shall be prima facie evidence of such rate. (b) COMPUTATION OF INTEREST. The Canadian Facility Borrower shall pay to the Canadian Facility Agent for the benefit of the Canadian Facility Lenders interest on each Canadian Facility Loan, which interest shall be calculated on the outstanding principal amount daily for the period: (i) in the case of a Canadian Facility Base Rate Loan, commencing on and including the day on which it is advanced and ending on, but excluding, the day on which it is repaid; or (ii) in the case of a Canadian Facility BA Rate Loan, commencing on and including the first day of the Interest Period relative to such Canadian Facility BA Rate Loan and ending on, but excluding, the last day of such Interest Period, at the rate of interest per annum equal to: (i) the Canadian Facility Base Rate for Canadian Facility Base Rate Loans, on the basis of a year of 365 days for the actual number of days elapsed; or (ii) the Canadian Facility Fixed BA Rate for Canadian Facility BA Rate Loans, on the basis of a year of 365 days for the actual number of days elapsed. For the purposes of this Agreement and calculation of interest on the basis of a year of 365 days, each rate of interest determined pursuant to such calculation expressed as an annual rate for the purposes of the Interest Act (Canada) is equivalent to such rate as so determined multiplied by the number of days in the calendar year in which the same is to be ascertained and divided by 365. The parties further agree that for the purposes of the Interest Act (Canada), (i) the principle of deemed reinvestment of interest shall not apply to any interest calculation under this Agreement, and (ii) the rates of interest stipulated in this Agreement are intended to be nominal rates and not effective rates or yields. (c) Accrual and Payment of Interest. Interest on each Canadian Facility Loan shall accrue from day to day but shall not compound and shall be payable: (i) in the case of a Canadian Facility Base Rate Loan or any other amount payable hereunder other than in respect of a Canadian Facility BA Rate Loan, monthly in arrears on the last Business Day of each month; or (ii) in the case of a Canadian Facility BA Rate Loan, on the last day of the applicable Interest Period for each Canadian Facility BA Rate Loan and, if the Interest Period extends for more than three months, at intervals of three months after the first day 82 89 of the Interest Period and upon payment in full of the principal amount of each such Loan. 4.03 PAYMENT OF PRINCIPAL. Except as set forth in SECTION 4.13 with respect to Canadian Facility Term Loans, (i) the principal amount of each Canadian Facility Loan advanced under the Canadian Facility Full Maturity Tranche shall be due and payable to the Canadian Facility Agent for the benefit of the Canadian Facility Lenders in full on the Total Facility Termination Date and (ii) the principal amount of each Canadian Facility Loan advanced under the Canadian Facility Renewable Tranche shall be due and payable to the Canadian Facility Agent for the benefit of the Canadian Facility Lenders in full on the Canadian Facility Renewable Tranche Termination Date. The principal amount of any Canadian Facility Base Rate Loan may be prepaid in whole or in part at any time. The principal amount of any Canadian Facility BA Rate Loan may be prepaid only at the end of the applicable Interest Period unless the Canadian Facility Borrower shall pay to the Canadian Facility Agent for the account of the Canadian Facility Lenders the additional amount, if any, required under SECTION 6.05. All prepayments of Canadian Facility Loans made by the Canadian Facility Borrower shall be in the amount of (i) at least CAN $2,000,000 or (ii) the amount equal to all Canadian Facility Outstandings, or (iii) such other amount as necessary to comply with SECTION 4.01(a) or 4.07. 4.04 MANNER OF PAYMENT. (a) Each payment of principal (including any prepayment) and payment of interest in respect of Canadian Facility Loans, and any other amount required to be paid to the Canadian Facility Lenders with respect to the Canadian Facility Loans, shall be made in Canadian Dollars to the Canadian Facility Agent at its Principal Office, for the account of each Canadian Facility Lender's Applicable Lending Office. Each such payment shall be made in Same Day Funds before 12:00 noon (Toronto, Canada time) on the date such payment is due. The Canadian Facility Agent may, but shall not be obligated to, debit the amount of any such payment which is not made by such time to any ordinary deposit account, if any, of the Canadian Facility Borrower with the Canadian Facility Agent. The Canadian Facility Borrower shall give the Canadian Facility Agent prior telephonic notice of any payment of principal, such notice to be given by not later than 10:00 A.M. (Toronto, Canada time) one (1) Business Day prior to the date of such payment. (b) The Canadian Facility Agent shall deem any payment by or on behalf of the Canadian Facility Borrower hereunder that is not made both (i) in Canadian Dollars and in Same Day Funds and (ii) prior to 12:00 noon (Toronto, Canada time) to be a non-conforming payment. Any such payment shall not be deemed to be received by the Canadian Facility Agent until the later of (x) the time such funds become available funds and (y) the next Business Day. The Canadian Facility Agent shall give prompt telephonic notice to the applicable Authorized Representative and each of the Canadian Facility Lenders (confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of SECTION 11.01(a) and 11.01(b). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding Business Day) at the Default or the maximum rate permitted by applicable law, 83 90 whichever is lower, from the date such amount was due and payable until the date such amount is paid in full. (c) In the event that any payment hereunder or under the Canadian Facility Loans which bear interest at the Canadian Facility Base Rate becomes due and payable on a day other than a Business Day, then such due date shall be extended to the next succeeding Business Day; provided that interest shall continue to accrue during the period of any such extension. 4.05 EVIDENCE OF INDEBTEDNESS. The Canadian Facility Borrower hereby authorizes each Canadian Facility Lender and the Canadian Facility Agent to record, from time to time, in its records, the date and amount of each Canadian Facility Loan; the interest rates payable by the Canadian Facility Borrower in respect of each Canadian Facility Loan and any Interest Period applicable thereto; the dates and amounts of all payments received by such Canadian Facility Lender on account of principal, interest and fees; and the amount of all the Canadian Facility Loans which remain payable by the Canadian Facility Borrower to such Canadian Facility Lender. All amounts and other information so recorded shall be prima facie evidence thereof. The failure to record, or any error in recording, any such amount or other information shall not limit or impair the obligations of the Canadian Facility Borrower hereunder or under any Loan Document. 4.06 PRO RATA PAYMENTS. Except as otherwise provided herein, (a) each payment on account of the principal of and interest on the Canadian Facility Loans shall be made to the Canadian Facility Agent for the account of the Canadian Facility Lenders pro rata based on their Applicable Fronting Percentages for the Canadian Facility, (b) all payments to be made by the Canadian Facility Borrower for the account of each of the Canadian Facility Lenders on account of principal, interest and fees shall be made without diminution, set-off, recoupment, counterclaim or, except as set forth in SECTION 6.06(a), deduction, and (c) the Canadian Facility Agent in all other cases will promptly distribute payments received to the Canadian Facility Lenders. Notwithstanding the foregoing, in the event any Canadian Facility Lender shall not be able to make a Canadian Facility BA Rate Loan under the circumstances provided in SECTION 6.01 or 6.03, interest shall be allocated to such Canadian Facility Lender according to the interest rate payable to such Canadian Facility Lender as set forth in SECTION 6.04. 4.07 REDUCTIONS. The Canadian Facility Borrower shall, by notice from an Authorized Representative, have the right from time to time (but not more frequently than once during each fiscal quarter), upon not less than ten (10) Business Days' written notice to the Canadian Facility Agent, effective upon receipt, to reduce the Total Canadian Facility Commitment. The Canadian Facility Agent shall give each Canadian Facility Lender, within one (1) Business Day, telefacsimile notice, or telephonic notice (confirmed in writing), of such reduction. Each such reduction shall be in the aggregate amount of CAN $5,000,000 or such greater amount which is in an integral multiple of CAN $5,000,000 or the entire remaining Total Canadian Facility Commitment, shall permanently reduce the Total Canadian Facility Commitment and shall result in a pro rata reduction of both the Canadian Facility Full Maturity Tranche Commitment and the Canadian Facility Renewable Tranche Commitment, if such Canadian Facility Renewable Tranche Commitment remains outstanding at the time of such reduction. No such reduction shall result in the payment of any Canadian Facility BA Rate Loan other than on the last day of 84 91 the Interest Period of such Loan unless such prepayment is accompanied by amounts due, if any, under SECTION 6.05. Each reduction of the Total Canadian Facility Commitment shall be accompanied by payment of the Canadian Facility Loans to the extent that the (i) Canadian Facility Outstandings exceed the Total Canadian Facility Commitment, (ii) the Canadian Facility Renewable Tranche Outstandings exceed the Canadian Facility Renewable Tranche Commitment or (iii) the Canadian Facility Full Maturity Tranche Outstandings exceed the Canadian Facility Full Maturity Tranche Commitment, in each case after giving effect to such reduction, together with accrued and unpaid interest on the amounts prepaid. 4.08 CONVERSIONS AND ELECTIONS OF SUBSEQUENT INTEREST PERIODS. Provided that no Default or Event of Default shall have occurred and be continuing and subject to the limitations set forth below and in ARTICLE VI hereof, the Canadian Facility Borrower may request a Conversion or Continuation provided that: (a) the proceeds are used to retire the outstanding Canadian Facility Loan (the "Outstanding Loan"); (b) the Conversion or Continuance would otherwise be a permitted Canadian Facility Advance hereunder and the Canadian Facility Borrower complies with each provision hereof relative to the obtaining of a Canadian Facility Advance; (c) the aggregate principal amount of the Conversion or Continuance is not greater than the Outstanding Loan plus accrued interest in the case of Canadian Facility BA Rate Loans rounded up to the nearest CAN $100,000; and (d) each Conversion or Continuance is made contemporaneously with the retirement of the Outstanding Loan. Notice of any such Conversions or Continuation shall be effected by receipt of an appropriate Borrowing Notice and shall specify the effective date of such Conversion or Continuation and the Interest Period to be applicable to the Canadian Facility Loan as Continued or Converted and the Outstanding Loan to be retired. Each Continuation and Conversion pursuant to this SECTION 4.08 shall be subject to the limitations on Canadian Facility BA Rate Loans set forth in the definition of "Interest Period" herein and in SECTIONS 4.01 and 4.03 and ARTICLE VI hereof. All such Continuations or Conversions of Canadian Facility Loans shall be effected pro rata based on the Applicable Fronting Percentages of the Canadian Facility Lenders for the Canadian Facility. 4.09 FACILITY FEE. For the period beginning on the Closing Date and ending on the Total Facility Termination Date in the case of the Canadian Facility Full Maturity Tranche, and on the Canadian Facility Renewable Tranche Termination Date in the case of the Canadian Facility Renewable Tranche, the Company agrees to pay to the US Facility Agent, and the US Facility Agent shall then pay to each Lender at its office in the United States so designated thereby based on such Lender's Applicable Commitment Percentage, (a) a Facility Fee equal to the Applicable Margin for Facility Fees with respect to the Canadian Facility Full Maturity Tranche multiplied by the Canadian Facility Full Maturity Tranche Commitment, and (b) a 85 92 Facility Fee equal to the Applicable Margin for Facility Fees with respect to the Canadian Facility Renewable Tranche multiplied by the Canadian Facility Renewable Tranche Commitment. Such payments of Facility Fees provided for in this SECTION 4.09 shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December of each year beginning September 30, 2000 to and on the Total Facility Termination Date in the case of the Canadian Facility Full Maturity Tranche and on the Canadian Facility Renewable Tranche Termination Date in the case of the Canadian Facility Renewable Tranche. Notwithstanding the foregoing, so long as any Canadian Facility Fronting Lender fails to make available any portion of its Canadian Facility Commitment when properly requested by the Canadian Facility Borrower, such Lender shall not be entitled to receive payment of its pro rata share of such Facility Fees until such Lender shall make available such portion. Such Facility Fees shall be calculated on the basis of a year of 360 days for the actual number of days elapsed. 4.10 DEFICIENCY ADVANCES. No Canadian Facility Lender shall be responsible for any default of any other Canadian Facility Lender in respect to such other Canadian Facility Lender's obligation to make any Canadian Facility Loan hereunder nor shall the Canadian Facility Fronting Commitment of any Canadian Facility Lender or the Canadian Facility Commitment of any Lender be increased as a result of such default of any other Canadian Facility Lender. Without limiting the generality of the foregoing, in the event any Canadian Facility Lender shall fail to advance funds to the Canadian Facility Borrower as herein provided, the Canadian Facility Agent may in its discretion, but shall not be obligated to, make a Canadian Facility Advance hereunder as a Canadian Facility Lender of all or any portion of such amount or amounts (each, a "deficiency advance") and shall thereafter be entitled to payments of principal of and interest on such deficiency advance in the same manner and at the same interest rate or rates to which such other Canadian Facility Lender would have been entitled had it made such advance hereunder; provided that, upon payment to the Canadian Facility Agent from such other Canadian Facility Lender of the entire outstanding amount of each such deficiency advance, together with accrued and unpaid interest thereon, from the most recent date or dates interest was paid to the Canadian Facility Agent by the Canadian Facility Borrower on each Canadian Facility Loan comprising the deficiency advance, at the interest rate per annum equal to the Canadian Overnight Rate, then such payment shall be credited against the applicable Canadian Facility Outstanding owing to the Canadian Facility Agent in full payment of such deficiency advance and the Canadian Facility Borrower shall be deemed to have borrowed the amount of such deficiency advance from such other Canadian Facility Lender as of the most recent date or dates, as the case may be, upon which any payments of interest were made by the Canadian Facility Borrower thereon. 4.11 USE OF PROCEEDS. The proceeds of the Canadian Facility Loans made pursuant to the Canadian Facility hereunder shall be used by the Canadian Facility Borrower to finance capital expenditures and Permitted Acquisitions and for other working capital and general corporate needs of the Canadian Facility Borrower, including commercial paper backup liquidity. 4.12 CANADIAN FACILITY EXTENSION. (a) With the unanimous consent of all Lenders under the Total Facilities, at each Canadian Facility Renewable Tranche Extension Date the Canadian Facility Borrower can elect 86 93 to extend the Canadian Facility Renewable Tranche Termination Date for an additional period of 364 days with respect to the Canadian Facility Renewable Tranche Commitment as at such Canadian Facility Renewable Tranche Extension Date; provided, however, that in no event shall the Canadian Facility Renewable Tranche Termination Date be extended beyond the Total Facility Termination Date. (b) The Canadian Facility Borrower shall notify the Lenders of its request for such an extension by delivering to the Canadian Facility Agent and the Global Agent notice of such request signed by an Authorized Representative not more than sixty (60) days nor less than forty-five (45) days prior to the applicable Canadian Facility Renewable Tranche Extension Date. Notice of receipt of such request shall be provided by the Canadian Facility Agent to the Canadian Facility Lenders and to each other Facility Agent, who shall in turn provide notice of such request to the respective Lenders in such Facility. The Global Agent shall notify the Canadian Facility Borrower in writing not later than twenty-one (21) days prior to the applicable Canadian Facility Renewable Tranche Extension Date of the decision of the Lenders. Failure by any Lender to respond to a request for an extension shall constitute a refusal of such Lender to give its consent to such extension, and the Canadian Facility Renewable Tranche Termination Date shall not be extended. Failure by the Global Agent to give such notice to the Canadian Facility Borrower as a result of not receiving the consent of all Lenders to such extension shall constitute refusal by the Lenders to extend the Canadian Facility Renewable Tranche Termination Date. (c) If on any Canadian Facility Renewable Tranche Extension Date the Canadian Facility Borrower does not so elect to extend the Canadian Facility Renewable Tranche Termination Date then in effect, or if all Lenders under the Total Facilities do not unanimously consent to such extension, then as of such Canadian Facility Renewable Tranche Termination Date, (i) in addition to any reduction required under SECTION 4.13 hereof, the Total Canadian Facility Commitment as at such date shall be permanently reduced to an amount equal to the Canadian Facility Term Loan Outstandings, if any, (ii) the Canadian Facility Renewable Tranche Commitment shall be reduced to zero, and (iii) subject to the provisions of SECTION 4.13 hereof, all Canadian Facility Renewable Tranche Outstandings shall be due and payable in full. 4.13 CANADIAN TERM LOAN OPTION. (a) So long as no Default or Event of Default exists, at each Canadian Facility Renewable Tranche Extension Date occurring prior to the Canadian Facility Term Loan Termination Date, the Canadian Facility Borrower can elect to convert any or all Canadian Facility Renewable Tranche Outstandings as of such Canadian Facility Renewable Tranche Extension Date into a term loan on such date in the original principal amount equal to such Canadian Facility Renewable Tranche Outstandings. Canadian Facility Loans so converted by the Canadian Facility Borrower in accordance with this SECTION 4.13 shall be referred to as the "Canadian Facility Term Loans." The Canadian Facility Term Loans shall be repaid in equal quarterly installments based on a four (4) year amortization schedule on the first Business Day of each November, February, May and August commencing with the first such date after the most recent Canadian Facility Renewable Tranche Extension Date and continuing until and including a final payment of all Canadian Facility Term Loan Outstandings on the Canadian Facility Term 87 94 Loan Termination Date. The Canadian Facility Term Loans may be comprised of Canadian Facility Base Rate Loans and Canadian Facility BA Rate Loans as the Canadian Facility Borrower may elect in accordance with the provisions of this ARTICLE IV. The Canadian Facility Term Loans shall bear interest at a rate equal to (i) the same terms as the Canadian Facility Loans prior to the conversion to Canadian Facility Term Loans plus the Term Loan Premium then applicable until the initial Continuation or Conversion thereof pursuant to SECTION 4.08 hereof and (ii) the Applicable Rate for either Canadian Facility Base Rate Loans or Eurodollar Rate Loans, as selected by the Borrower, plus the Term Loan Premium applicable from time to time, at all times after the initial Continuation or Conversion thereof. Amounts repaid or prepaid on the Canadian Facility Term Loans may not be reborrowed, and the Total Canadian Facility Commitment shall be permanently reduced by any such amounts. (b) If on any Canadian Facility Renewable Tranche Extension Date the Canadian Facility Borrower does not so elect to convert all or a portion of its Canadian Facility Renewable Tranche Outstandings as of such date to Canadian Facility Term Loans as described in (a) above, then on the Canadian Facility Renewable Tranche Termination Date then in effect, (i) all Canadian Facility Renewable Tranche Outstandings as of such date which are not so converted shall be due and payable in full, and (ii) in addition to any reduction required under SECTION 4.12 hereof, the Total Canadian Facility Commitment as at such Canadian Facility Renewable Tranche Extension Date shall be permanently reduced by an amount equal to the Canadian Facility Renewable Tranche Outstandings as at such date which are not so converted. 4.14 PARTICIPATIONS. On the Closing Date and each day thereafter until the Total Facility Termination Date, each Lender (including a Canadian Facility Lender if necessary) will be deemed to have absolutely, irrevocably and unconditionally purchased from each Canadian Facility Lender a Participation in Canadian Facility Outstandings owing to such Canadian Facility Lender in an amount such that, after such purchase, each Lender will have a Facility Credit Exposure under the Canadian Facility equal in amount to its Applicable Commitment Percentage multiplied by the Canadian Facility Outstandings (referred to as the "Facility Participation Amount" for such Lender in the Canadian Facility). Each such Participation of each Lender in the Canadian Facility shall be funded in accordance with SECTION 11.07. 4.15 MAXIMUM RATE OF RETURN. Notwithstanding any provision to the contrary contained in this Agreement, in no event shall the aggregate "interest" (as defined in Section 347 of the Criminal Code, Revised Statutes of Canada, 1985, C. 46 as the same may be amended, replaced or re-enacted from time to time) payable under this Agreement exceed the effective annual rate of interest on the "credit advanced" (as defined in that section) under this Agreement lawfully permitted under that section and, if any payment, collection or demand pursuant to this Agreement in respect of "interest" (as defined in that section) is determined to be contrary to the provisions of that section, such payment, collection or demand shall be deemed to have been made by mutual mistake of the Canadian Facility Borrower and the Canadian Facility Lenders and the amount of such payment or collection shall be refunded to the Canadian Facility Borrower; for purposes of this Agreement the effective annual rate of interest shall be determined in accordance with generally accepted actuarial practices and principles over the term of the applicable credit advanced on the basis of annual compounding of the lawfully permitted rate of interest and, in the event of dispute, a certificate of a Fellow of the Canadian Institute of 88 95 Actuaries appointed by the Canadian Facility Agent will be conclusive for the purposes of such determination. 89 96 ARTICLE V The Australian Facility 5.01 ADVANCES. (a) COMMITMENT. Subject to the terms and conditions of this Agreement, each Australian Facility Lender severally agrees to make, on behalf of all the Lenders, Australian Facility Advances in Australian Dollars or New Zealand Dollars (as specified in a Borrowing Notice) to the Australian Facility Borrower requesting such Australian Facility Advance, as the case may be, as specified in such Borrowing Notice, from time to time from the Closing Date until the Total Facility Termination Date, on a pro rata basis as to the total borrowing requested by such Australian Facility Borrower on any day determined by such Australian Facility Lender's Applicable Fronting Percentage for the Australian Facility, up to but not exceeding (i) in the case of Advances in Australian Dollars, the Australian Dollar Fronting Commitment of such Australian Facility Lender, and (ii) in the case of Advances in New Zealand Dollars, the New Zealand Dollar Fronting Commitment of such Australian Facility Lender, and each Lender shall have a Participation in each such Australian Facility Advance pursuant to SECTION 5.14 equal in amount to its Applicable Commitment Percentage times such Australian Facility Advance; PROVIDED, however, that the Australian Facility Lenders will not be required and shall have no obligation to make any Australian Facility Advance (A) so long as a Default or an Event of Default has occurred and is continuing or (B) if the Lenders have accelerated the maturity of the Obligations as a result of an Event of Default; provided further, however, that immediately after giving effect to each such Australian Facility Advance, (x) the Australian Facility Outstandings shall not exceed the Total Australian Facility Commitment and (y) the New Zealand Dollar Outstandings shall not exceed the Total New Zealand Dollar Commitment. Within such limits, the Australian Facility Borrowers may borrow, repay and reborrow Australian Facility Loans hereunder, on a Business Day, from the Closing Date until, but (as to borrowings and reborrowings) not including, the Total Facility Termination Date; provided, however, that the aggregate principal amount outstanding to any Australian Facility Borrower shall not at any time exceed its Australian Facility Maximum Amount; and provided further, however, that (i) no Offshore Rate Loan shall be made which has an Interest Period that extends beyond the Total Facility Termination Date and (ii) each Offshore Rate Loan may be repaid only on the last day of the Interest Period with respect thereto, unless such prepayment is accompanied by the additional payment, if any, due under SECTION 6.05. The Australian Facility Borrowers agree that if at any time the Australian Facility Outstandings shall exceed the Total Australian Facility Commitment or the New Zealand Dollar Outstandings shall exceed the Total New Zealand Dollar Commitment, the Australian Facility Borrowers shall immediately repay a principal amount of the outstanding Australian Facility Loans such that, as a result of such reduction, the Total Australian Facility Commitment shall equal or exceed the Australian Facility Outstandings and the Total New Zealand Dollar Commitment shall equal or exceed the New Zealand Dollar Outstandings. (b) Amounts, Advances and Rate Selection. 90 97 (i) The principal amount outstanding on any Australian Facility Loan shall be recorded in the Australian Facility Agent's records in Australian Dollars in the case of an Australian Facility Advance of Australian Dollars and in New Zealand Dollars in the case of an Australian Facility Advance of New Zealand Dollars, in each case based on the amount of any Australian Facility Advance as reduced from time to time by the amount of any principal payments with respect to such Australian Facility Advance. In the case of an Australian Facility Advance of New Zealand Dollars, the Australian Facility Agent shall also record the principal amount outstanding on any such Australian Facility Loan in Australian Dollars, based on the Australian Dollar Equivalent Amount of such Australia Facility Advance determined based on the Spot Rate of Exchange as of the date of such Advance, as reduced from time to time by any principal payments with respect thereto. In the event an Australian Facility Loan is Continued or Converted pursuant to SECTION 5.08, such election shall be treated as an Australian Facility Advance in the Applicable Currency of such Loan for purposes of this SECTION 5.01, with the Australian Dollar Equivalent Amount of the principal amount of any such Loan in New Zealand Dollars determined based on the Spot Rate of Exchange as of the date of such Continuation or Conversion. The Australian Facility Agent shall adjust its books to reflect the new Australian Dollar Equivalent Amount of such Australian Facility Loan, and in the event that such adjustment would cause the Australian Facility Outstandings to exceed the Total Australian Facility Commitment, or the New Zealand Dollar Outstandings to exceed the Total New Zealand Dollar Commitment, the Australian Facility Borrowers shall, immediately on the effective date of such Continuation or Conversion, repay the portion of such Continued or Converted Loan (applying the new Spot Rate of Exchange) necessary to ensure that thereafter the Total Australian Facility Commitment shall equal or exceed the Australian Facility Outstandings and the Total New Zealand Dollar Commitment shall equal or exceed the New Zealand Dollar Outstandings. There shall be no more than four (4) Offshore Rate Loans outstanding at any one time under the Australian Facility. (ii) Each Australian Facility Loan made pursuant to SECTION 5.01 and each Continuation and Conversion under SECTION 5.08 shall be (A) in the case of Offshore Rate Loans, in an amount not less than AUS $5,000,000 (or the New Zealand Dollar Equivalent Amount thereof if in New Zealand Dollars), and, if greater, in integral multiples of AUS $500,000 (or the New Zealand Dollar Equivalent Amount thereof if in New Zealand Dollars), and (B) in the case of Australian Facility Base Rate Loans (other than Australian Facility Base Rate Refunding Loans), in an amount not less than AUS $5,000,000 (or the New Zealand Dollar Equivalent Amount thereof if in New Zealand Dollars), and, if greater, in integral multiples of AUS $500,000 (or the New Zealand Dollar Equivalent Amount thereof if in New Zealand Dollars). (iii) For each Australian Facility Advance made pursuant to SECTION 5.01 (other than Australian Facility Base Rate Refunding Loans made pursuant to SECTION 5.13(c)(i)) an Authorized Representative shall give the Australian Facility Agent at least (A) three (3) Business Days' irrevocable telefacsimile notice prior to 11:00 A.M. (Sydney, Australia time) of each Offshore Rate Loan representing a borrowing or Continuation or Conversion hereunder, and (B) three (3) Business Days' irrevocable 91 98 telefacsimile notice prior to 11:00 A.M. (Sydney, Australia time) of each Australian Facility Base Rate Loan representing a borrowing or Continuation or Conversion hereunder. Each such notice shall be in the form of a Borrowing Notice in the form attached hereto as EXHIBIT D-4, which shall be effective upon receipt by the Australian Facility Agent, and shall specify the Type of Loan, whether the Loan is to be made in Australian Dollars or New Zealand Dollars, the amount of the Australian Facility Advance to be made, the date of borrowing and the Interest Period (if an Offshore Rate Loan) to be used in the computation of interest. Neither the Australian Facility Agent nor any Australian Facility Lender shall incur any liability to any Australian Facility Borrower in acting upon any notice referred to above which the Australian Facility Agent believes in good faith to have been given by an Authorized Representative of such Australian Facility Borrower or for otherwise acting in good faith, and upon funding of Australian Facility Loans by any Australian Facility Lender in accordance with this Agreement pursuant to any such notice, such Australian Facility Borrower shall have effected Australian Facility Loans hereunder. A Borrowing Notice for an Offshore Rate Loan shall be irrevocable, and Australian Facility Borrower giving such notice shall be bound to make a borrowing in accordance therewith, unless such Australian Facility Borrower pays to the Australian Facility Lenders such amounts as may be due under SECTION 6.05 for failure of a borrowing of an Offshore Rate Loan to occur on the date specified therefor in a Borrowing Notice. The duration of the initial Interest Period for each Australian Facility Loan shall be as specified in the initial Borrowing Notice. The Australian Facility Borrowers shall have the option to elect the duration of subsequent Interest Periods and to Continue or Convert the Australian Facility Loans in accordance with SECTION 5.08. If the Australian Facility Agent does not receive a notice of election of duration of an Interest Period or of the Conversion of a Loan by the time prescribed hereby and by SECTION 5.08, the applicable Australian Facility Borrower shall be deemed to have elected to Convert such Loan to or Continue such Loan as an Australian Facility Base Rate Loan until such Australian Facility Borrower notifies the Australian Facility Agent in accordance with SECTION 5.08. (iv) Notice of receipt of each Borrowing Notice in respect of Australian Facility Loans made pursuant to SECTION 5.01, together with the amount of each Australian Facility Lender's portion of an Advance requested thereunder and the applicable interest rate, shall be provided by the Australian Facility Agent to each Australian Facility Lender by telefacsimile with reasonable promptness, but (provided the Australian Facility Agent shall have received such notice by 11:00 A.M. (Sydney, Australia time)) not later than 2:00 P.M. (Sydney, Australia time) on the same day as the Australian Facility Agent's receipt of such notice from the applicable Australian Facility Borrower. (v) Each Australian Facility Lender shall, pursuant to the terms and subject to the conditions of this Agreement, not later than 12:00 noon (Sydney, Australia time) on the date specified for such Australian Facility Advance, make the amount of the Australian Facility Advance to be made by it on such day available to the applicable Australian Facility Borrower by depositing or transferring the proceeds thereof in Australian Dollars or New Zealand Dollars, as requested, and in Same Day Funds to the 92 99 Australian Facility Agent at its Principal Office. The amount so received by the Australian Facility Agent shall, subject to the terms of this Agreement, be made available to the applicable Australian Facility Borrower by deposit of the proceeds to an account of such Australian Facility Borrower maintained at the Principal Office or otherwise as shall be directed in the applicable Borrowing Notice. 5.02 PAYMENT OF INTEREST. (a) The Australian Facility Borrowers shall pay interest to the Australian Facility Agent for the account of each Australian Facility Lender on the outstanding and unpaid principal amount of each Australian Facility Loan made by such Australian Facility Lender for the period commencing on the date of such Australian Facility Loan until such Loan shall be paid, Continued or Converted, as the case may be, at the then applicable Australian Facility Base Rate for Australian Facility Base Rate Loans or applicable Offshore Rate for Offshore Rate Loans, such payments to be made (i) in Australian Dollars with respect to Australian Facility Loans made in Australian Dollars, and (ii) in New Zealand Dollars with respect to Australian Facility Loans made in New Zealand Dollars; provided, however, that if any Event of Default shall have occurred and be continuing, all amounts outstanding hereunder shall bear interest thereafter at the Default Rate. (b) Interest on each Australian Facility Loan shall be computed on the basis of a year of 365/366 days and calculated for the actual number of days elapsed. Interest on each Australian Facility Loan shall be paid (i) quarterly in arrears on the last Business Day of each fiscal quarter, commencing September 30, 2000, for each Australian Facility Base Rate Loan, (ii) on the last day of the applicable Interest Period for each Offshore Rate Loan and, if the Interest Period extends for more than three months, also at intervals of three months after the first day of the Interest Period and (iii) upon payment in full of the principal of each such Loan. Interest on amounts not paid when due shall be payable on demand. 5.03 PAYMENT OF PRINCIPAL. The principal amount of each Australian Facility Loan shall be due and payable to the Australian Facility Agent for the benefit of each Australian Facility Lender in full on the Total Facility Termination Date. The principal amount of any Australian Facility Base Rate Loan may be prepaid in whole or in part at any time. The principal amount of any Offshore Rate Loan may be prepaid only at the end of the applicable Interest Period unless the Australian Facility Borrowers shall pay to the Australian Facility Agent for the account of the Australian Facility Lenders the additional amount, if any, required under SECTION 6.05. All prepayments of Australian Facility Loans made by the Australian Facility Borrowers shall be in the Applicable Currency of the respective Australian Facility Loan in the amount of (i) AUS $5,000,000 (or the New Zealand Dollar Equivalent Amount thereof if in New Zealand Dollars), or (ii) such greater amount which is an integral multiple of AUS $1,000,000 (or the New Zealand Dollar Equivalent Amount thereof if in New Zealand Dollars), or (iii) the amount equal to all Australian Facility Outstandings, or (iv) such other amount as necessary to comply with SECTION 5.01(a) or 5.07. 5.04 MANNER OF PAYMENT. 93 100 (a) Each payment of principal (including any prepayment) and payment of interest and fees in respect of Australian Facility Loans, and any other amount required to be paid to the Australian Facility Lenders with respect to the Australian Facility Loans, shall be made to the Australian Facility Agent at its Principal Office, for the account of each Australian Facility Lender's Applicable Lending Office, to be recorded in Australian Dollars and, if applicable, New Zealand Dollars, as set forth in SECTION 5.01(b). Each such payment shall be made in Applicable Currency of the Australian Facility Loan in Same Day Funds before 12:00 noon (Sydney, Australia time) on the date such payment is due. The Australian Facility Agent may, but shall not be obligated to, debit the amount of any such payment which is not made by such time to any ordinary deposit account, if any, of the applicable Australian Facility Borrower with the Australian Facility Agent. The Australian Facility Borrowers shall give the Australian Facility Agent prior telephonic notice of any payment of principal, such notice to be given by not later than 11:00 A.M. (Sydney, Australia time), at least three (3) Business Days prior to the date of such payment. (b) The Australian Facility Agent shall deem any payment by or on behalf of the Australian Facility Borrowers hereunder that is not made both (i) in Australian Dollars in the case of Australian Facility Loans made in Australian Dollars or in New Zealand Dollars in the case of Australian Facility Loans made in New Zealand Dollars and, in either case, in Same Day Funds and (ii) prior to 12:00 noon (Sydney, Australia time) to be a non-conforming payment. Any such payment shall not be deemed to be received by the Australian Facility Agent until the later of (x) the time such funds become available funds in the required Applicable Currency and (y) the next Business Day. The Australian Facility Agent shall give prompt telephonic notice to the applicable Authorized Representative and each of the Australian Facility Lenders (confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of SECTION 11.01(a) and 11.01(b). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding Business Day) at the Default Rate or the maximum rate permitted by applicable law, whichever is lower, from the date such amount was due and payable until the date such amount is paid in full. (c) In the event that any payment hereunder becomes due and payable on a day other than a Business Day, then such due date shall be extended to the next succeeding Business Day unless otherwise provided under clause (ii) of the definition of "Interest Period"; provided that interest shall continue to accrue during the period of any such extension. 5.05 EVIDENCE OF INDEBTEDNESS. Each Australian Facility Borrower hereby authorizes each Australian Facility Lender and the Australian Facility Agent to record, from time to time, in its records, the date and amount of each Australian Facility Loan; the interest rates payable by the applicable Australian Facility Borrower in respect of each Australian Facility Loan and any Interest Period applicable thereto; the dates and amounts of all payments received by such Australian Facility Lender on account of principal, interest and fees; and the amount of all the Australian Facility Loans which remain payable by the Australian Facility Borrowers to such Australian Facility Lender. All amounts and other information so recorded shall be prima facie evidence thereof. The failure to record, or any error in recording, any such amount or other 94 101 information shall not limit or impair the obligations of the Australian Facility Borrowers hereunder or under any Loan Document. 5.06 PRO RATA PAYMENTS. Except as otherwise provided herein, (a) each payment on account of the principal of and interest on the Australian Facility Loans shall be made to the Australian Facility Agent for the account of the Australian Facility Lenders pro rata based on their Applicable Fronting Percentages for the Australian Facility, (b) all payments to be made by the Australian Facility Borrowers for the account of each of the Australian Facility Lenders on account of principal, interest and fees shall be made without diminution, set-off, recoupment, counterclaim or, except as set forth in SECTION 6.06(a), deduction, and (c) the Australian Facility Agent will promptly distribute payments received to the Australian Facility Lenders. Notwithstanding the foregoing, in the event any Australian Facility Lender shall not be able to make an Offshore Rate Loan under the circumstances provided in SECTION 6.01 or 6.03, interest shall be allocated to such Australian Facility Lender according to the interest rate payable to such Australian Facility Lender as set forth in SECTION 6.04. 5.07 REDUCTIONS. The Australian Facility Borrowers shall, by notice from an Authorized Representative, have the right from time to time (but not more frequently than once during each fiscal quarter), upon not less than ten (10) Business Days' written notice to the Australian Facility Agent, effective upon receipt, to reduce the Total Australian Facility Commitment. The Australian Facility Agent shall give each Australian Facility Lender, within two (2) Business Days, telefacsimile notice, or telephonic notice (confirmed in writing), of such reduction. Each such reduction shall be in the aggregate amount of AUS $5,000,000 or such greater amount which is in an integral multiple of AUS $1,000,000, or the entire remaining Total Australian Facility Commitment, and shall permanently reduce the Total Australian Facility Commitment. No such reduction shall result in the payment of any Offshore Rate Loan other than on the last day of the Interest Period of such Loan unless such prepayment is accompanied by amounts due, if any, under SECTION 6.05. Each such reduction of the Total Australian Facility Commitment shall be accompanied by payment of the principal amount of the Australian Facility Loans to the extent that the Australian Facility Outstandings exceed the Total Australian Facility Commitment or the New Zealand Dollar Outstandings exceed the Total New Zealand Dollar Commitment, in each case after giving effect to such reduction, together with accrued and unpaid interest on the amounts prepaid. Any reduction of the Total Australian Facility Commitment hereunder shall result, ipso facto, in a pro rata reduction of the Total New Zealand Dollar Commitment so that, as reduced, the Australian Dollar Equivalent Amount of the Total New Zealand Dollar Commitment shall at all times remain equal to 10% of the Total Australian Facility Commitment. 5.08 CONVERSIONS AND ELECTIONS OF SUBSEQUENT INTEREST PERIODS. Subject to the limitations set forth below and in ARTICLE VI hereof, the Australian Facility Borrowers may: (a) upon notice to the Australian Facility Agent on or before 11:00 A.M. (Sydney, Australia time) on any Business Day, Convert all or a part of Offshore Rate Loans to Australian Facility Base Rate Loans under the Australian Facility on the last day of the Interest Period for such Offshore Rate Loans; and 95 102 (b) provided that no Default or Event of Default shall have occurred and be continuing, upon five (5) Business Days' notice to the Australian Facility Agent prior to 11:00 A.M. (Sydney, Australia time): (i) elect a subsequent Interest Period for all or a portion of Offshore Rate Loans under the Australian Facility to begin on the last day of the then current Interest Period for such Offshore Rate Loans; and (ii) Convert Australian Facility Base Loans to Offshore Rate Loans under the Australian Facility on any Business Day. Notice of any such Continuations or Conversions shall be effected by receipt of an appropriate Borrowing Notice and shall specify the effective date of such Continuation or Conversion and the Interest Period to be applicable to the Australian Facility Loan as Continued or Converted. Each Continuation and Conversion pursuant to this SECTION 5.08 shall be subject to the limitations on Offshore Rate Loans set forth in the definition of "Interest Period" herein and in SECTION 5.01 and 5.03 and ARTICLE VI hereof. All such Continuations or Conversions of Australian Facility Loans shall be effected pro rata based on the Applicable Fronting Percentages of the Australian Facility Lenders for the Australian Facility and shall be in the same currency as the original such Loan. 5.09 FACILITY FEE. For the period beginning on the Closing Date and ending on the Total Facility Termination Date, the Company agrees to pay to the US Facility Agent, and the US Facility Agent shall then pay to each Lender at its office in the United States so designated thereby based on such Lender's Applicable Commitment Percentage, a Facility Fee equal to the Applicable Margin for Facility Fees multiplied by the Total Australian Facility Commitment. Such payments of Facility Fees provided for in this SECTION 5.09 shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December beginning September 30, 2000 to and on the Total Facility Termination Date. Notwithstanding the foregoing, so long as any Australian Facility Lender fails to make available any portion of its Australian Facility Fronting Commitment when properly requested by an Australian Facility Borrower, such Lender shall not be entitled to receive payment of its pro rata share of such Facility Fee until such Lender shall make available such portion. Such Facility Fee shall be calculated on the basis of a year of 365/366 days for the actual number of days elapsed. 5.10 DEFICIENCY ADVANCES. No Australian Facility Lender shall be responsible for any default of any other Australian Facility Lender in respect to such other Australian Facility Lender's obligation to make any Australian Facility Loan hereunder nor shall the Australian Facility Fronting Commitment of any Australian Facility Lender or the Australian Facility Commitment of any Lender be increased as a result of such default of any other Australian Facility Lender. Without limiting the generality of the foregoing, in the event any Australian Facility Lender shall fail to advance funds to an Australian Facility Borrower as herein provided, the Australian Facility Agent may in its discretion, but shall not be obligated to, make an Australian Facility Advance hereunder as an Australian Facility Lender of all or any portion of such amount or amounts (each, a "deficiency advance") and shall thereafter be entitled to payments of principal of and interest on such deficiency advance in the same manner and at the 96 103 same interest rate or rates to which such other Australian Facility Lender would have been entitled had it made such advance; provided that, upon payment to the Australian Facility Agent from such other Australian Facility Lender of the entire outstanding amount of each such deficiency advance, together with accrued and unpaid interest thereon, from the most recent date or dates interest was paid to the Australian Facility Agent by the applicable Australian Facility Borrower on each Australian Facility Loan comprising the deficiency advance, at the interest rate per annum equal to the customary rate set by the Australian Facility Agent for the correction of errors among banks in Australia for three (3) Business Days and thereafter at the Australian Facility Base Rate, then such payment shall be credited against the applicable Australian Facility Outstanding owing to the Australian Facility Agent in full payment of such deficiency advance and the applicable Australian Facility Borrower shall be deemed to have borrowed the amount of such deficiency advance from such other Australian Facility Lender as of the most recent date or dates, as the case may be, upon which any payments of interest were made by such Australian Facility Borrower thereon. In the event any Australian Facility Lender shall fail to fund its purchase of a Participation after notice from the Australian Facility Swing Line Lender, such Australian Facility Lender shall pay to the Australian Facility Swing Line Lender such amount on demand, together with interest at the interest rate per annum equal to the customary rate set by the Australian Facility Agent for the correction of errors among banks in Australia for three (3) Business Days and thereafter at the Australian Facility Base Rate on the amount so due from the date of such notice to the date such purchase price is received by the Australian Facility Swing Line Lender, as applicable. 5.11 USE OF PROCEEDS. The proceeds of the Australian Facility Loans made pursuant to the Australian Facility hereunder shall be used by the Australian Facility Borrowers to finance capital expenditures and Permitted Acquisitions and for other working capital and general corporate needs of the Australian Facility Borrowers. 5.12 ONE LOAN. (a) Subject to subsection (c) below, all Australian Facility Loans and Australian Facility Advances by the Australian Facility Lenders to any Australian Facility Borrower shall constitute the joint and several general obligation of each of the Australian Facility Borrowers. Each Australian Facility Borrower shall be jointly and severally liable to the Australian Facility Agent and the Australian Facility Lenders for all Obligations hereunder in respect of the Australian Facility, regardless of whether such Obligations arise as a result of Australian Facility Advances to such Borrower, it being stipulated and agreed that Australian Facility Advances hereunder to any Australian Facility Borrower inure to the benefit of each of the Australian Facility Borrowers, and that the Australian Facility Lenders are relying on the joint and several liability of the Australian Facility Borrowers in extending credit under the Australian Facility. (b) Subject to subsection (c) below, each Australian Facility Borrower guarantees to the Australian Facility Lenders the payment in full of all of the Obligations of the other Australian Facility Borrowers to the Australian Facility Lenders in respect of Australian Facility and further guarantees the due performance by each other Australian Facility Borrower of its respective duties and covenants made in favor of the Australian Facility Agent and the Australian Facility Lenders hereunder. Each Australian Facility Borrower agrees that the joint and several 97 104 liability of the Australian Facility Borrowers shall not be impaired or affected by any modification, supplement, extension or amendment of any contract or agreement to which the parties thereto may hereafter agree, nor by any modification, release or other alteration of any of the rights of the Australian Facility Agent and the Australian Facility Lenders with respect to any collateral, nor by any delay, extension of time, renewal, compromise or other indulgence granted by the Australian Facility Agent and the Australian Facility Lenders with respect to any of the Obligations, nor by any other agreements or arrangements whatever with any other Australian Facility Borrower, any guarantor or any other Person, each Australian Facility Borrower hereby waiving all notice of any such delay, extension, release, substitution, renewal, compromise or other indulgence, and hereby consenting to be bound thereby as fully and effectually as if it had expressly agreed thereto in advance. The liability of each Australian Facility Borrower hereunder is direct and unconditional as to all of the Obligations hereunder in respect of the Australian Facility, and may be enforced without requiring the Australian Facility Agent or the Australian Facility Lenders first to resort to any other right, remedy or security; no Australian Facility Borrower shall have any right of subrogation, reimbursement or indemnity whatsoever, nor any right of recourse to security for any of the Obligations in respect of the Australian Facility, unless and until all of said Obligations have been paid in full. (c) Notwithstanding subsections (a) and (b) above, the joint and several liability of each Australian Facility Borrower for, and its obligation to guarantee payment of, all Obligations of the other Australian Facility Borrowers in respect of the Australian Facility shall not at any time exceed its Australian Facility Maximum Amount. 5.13 SWING LINE. (a) Notwithstanding any other provision of this Agreement to the contrary, in order to administer the Australian Facility in an efficient manner and to minimize the transfer of funds between the Australian Facility Agent and the Australian Facility Lenders, the Australian Facility Swing Line Lender shall make available Australian Facility Swing Line Loans in Australian Dollars to the Australian Facility Borrowers prior to the Total Facility Termination Date. The Australian Facility Swing Line Lender shall not be obligated to, and shall not, make any Australian Facility Swing Line Loan pursuant hereto (i) if it has been notified by the Australian Facility Agent or has actual knowledge that the Australian Facility Borrowers are not in compliance with all the conditions to the making of Australian Facility Loans set forth in this Agreement, (ii) if after giving effect to such Australian Facility Swing Line Loan, the Australian Facility Swing Line Outstandings would exceed AUS $5,000,000, or (iii) if after giving effect to such Australian Facility Swing Line Loan, the Australian Dollar Equivalent Amount of Australian Facility Outstandings would exceed the Total Australian Facility Commitment. The Australian Facility Borrowers may, subject to the conditions set forth in the preceding sentence, borrow, repay and reborrow under this SECTION 5.13. The interest payable on the Australian Facility Swing Line Loans is solely for the account of the Australian Facility Swing Line Lender until such time as any Lender has funded its Participation therein. If any Event of Default shall have occurred and be continuing, all Australian Facility Swing Line Loans shall bear interest thereafter at the Default Rate. (b) Subject to the terms and conditions in paragraph (a) of this SECTION 5.13, the amount of all overdrafts (including overnight or "book" overdrafts) in any deposit account that any Australian Facility Borrower may have with the Australian Facility Swing Line Lender from 98 105 time to time, shall be advanced as and be deemed to be Australian Facility Swing Loan Loans hereunder, without the requirement of notice to or from the Australian Facility Swing Line Lender or Australian Facility Borrowers, in the Australian Dollar Equivalent Amount of such overdraft. Each Australian Facility Swing Line Loan made pursuant to this SECTION 5.13(b) shall bear interest at the Australian Facility Prime Rate. The entire principal amount, together with accrued interest thereon, of any Australian Facility Swing Line Loan made pursuant to this SECTION 5.13(b) shall be due and payable to the Australian Facility Swing Line Lender two Business Days following the date of such Australian Facility Swing Line Loan. (c) In addition to Australian Facility Swing Line Loans made pursuant to paragraph (b) of this SECTION 5.13, the Australian Facility Borrowers may request Australian Facility Swing Line Loans pursuant to the terms of this paragraph (c). Borrowings under the Australian Facility Swing Line shall be in the minimum amount of AUS $50,000. For each Australian Facility Swing Line Loan Advance made pursuant to this SECTION 5.13(c), an Authorized Representative shall give the Australian Facility Swing Line Lender at least one Business Day's notice prior to 11:00 A.M. (Sydney, Australia time) of each Australian Facility Swing Line Loan hereunder. Each such Borrowing Notice shall specify the amount of the borrowing and the date of borrowing, and shall be in the form of EXHIBIT D-5, with appropriate insertions. Unless notified to the contrary by the Australian Facility Swing Line Lender, each repayment of an Australian Facility Swing Line Loan shall be in an amount which is an integral multiple of AUS $50,000 or the aggregate amount of all Australian Facility Swing Line Outstandings. Australian Facility Swing Line Loans made pursuant to this SECTION 5.13(c) shall bear interest solely at the Australian Facility Base Rate. All accrued and unpaid interest on Australian Facility Swing Line Loans made pursuant to this SECTION 5.13(c) shall be payable, on the dates and in the manner provided in SECTION 5.02 with respect to interest on Australian Facility Base Rate Loans. (d) Upon the making of an Australian Facility Swing Line Loan (whether pursuant to paragraph (b) or (c) of this SECTION 5.13), each Australian Facility Lender shall be deemed to have purchased from the Australian Facility Swing Line Lender a Participation therein in an amount equal to that Australian Facility Lender's Applicable Fronting Percentage of such Australian Facility Swing Line Loan. Upon demand made by the Australian Facility Swing Line Lender, each Australian Facility Lender shall, according to its Applicable Fronting Percentage of such Australian Facility Swing Line Loan, promptly provide to the Australian Facility Swing Line Lender the purchase price of its Participation therein. Any Advance made by an Australian Facility Lender pursuant to demand of the Australian Facility Swing Line Lender of the purchase price of its Participation shall when made be deemed to be (i) provided that the conditions to making Australian Facility Loans shall be satisfied, an Australian Facility Base Rate Refunding Loan and (ii) in all other cases, the funding by each Australian Facility Lender of the purchase price of its Participation in such Australian Facility Swing Line Loan. The obligation of each Australian Facility Lender to so provide its purchase price to the Australian Facility Swing Line Lender shall be absolute and unconditional and shall not be affected by the occurrence of an Event of Default or any other occurrence or event. (e) Any Australian Facility Borrower, at its option and subject to the terms hereof, may request an Advance pursuant to SECTION 5.01 in an amount sufficient to repay Australian Facility Swing Line Outstandings on any date and the Australian Facility Agent shall provide to 99 106 the Australian Facility Swing Line Lender from the proceeds of such Advance the amount necessary to repay such Australian Facility Swing Line Outstandings (which the Australian Facility Swing Line Lender shall then apply to such repayment) and credit any balance of the Advance in immediately available funds in the manner directed by the applicable Australian Facility Borrower. The Australian Facility Swing Line shall continue in effect until the Total Facility Termination Date, at which time all Australian Facility Swing Line Outstandings and accrued interest thereon shall be due and payable in full. 5.14 PARTICIPATIONS. On the Closing Date and each day thereafter until the Total Facility Termination Date, each Lender (including an Australian Facility Lender if necessary) will be deemed to have absolutely, irrevocably and unconditionally purchased from each Australian Facility Lender a Participation in Australian Facility Outstandings owing to such Australian Facility Lender (including in such Australian Facility Outstandings all Participations of such Australian Facility Lender in Australian Facility Swing Line Loans) in an amount such that, after such purchase, each Lender will have a Facility Credit Exposure under the Australian Facility equal in amount to its Applicable Commitment Percentage multiplied by the Australian Facility Outstandings (referred to as the "Facility Participation Amount" for such Lender in the Australian Facility). Each such Participation of each Lender in the Australian Facility shall be funded in accordance with SECTION 11.07. 100 107 ARTICLE VI Changes in Circumstances 6.01 INCREASED COST AND REDUCED RETURN. (a) If, after the date hereof, the adoption of any applicable law, rule, or regulation, or any change in any applicable law, rule, or regulation, or any change in the interpretation or administration thereof by any Governmental Authority, central bank, or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its Applicable Lending Office), the Issuing Bank or any Bank Guarantee Issuer, with any request or directive (whether or not having the force of law) of any such Governmental Authority, central bank, or comparable agency: (i) shall subject such Lender (or its Applicable Lending Office), the Issuing Bank or any Bank Guarantee Issuer to any tax, duty, or other charge with respect to any Fixed Rate Loans, any Note, its obligation to make or to Participate in Fixed Rate Loans or Reimbursement Obligations, or its obligation to issue any Letter of Credit or Bank Guarantee; or shall change the basis of taxation of any amounts payable to such Lender (or its Applicable Lending Office), the Issuing Bank or any Bank Guarantee Issuer under this Agreement or any Note in respect of any Fixed Rate Loans, Letters of Credit, Bank Guarantees or Reimbursement Obligations (other than taxes imposed on the overall net income of such Lender, Issuing Bank or Bank Guarantee Issuer by the jurisdiction in which such Lender, Issuing Bank or Bank Guarantee Issuer has its principal office or such Applicable Lending Office); (ii) shall impose, modify, or deem applicable any reserve, special deposit, assessment, compulsory loan, or similar requirement (other than the Applicable Reserve Requirement utilized in the determination of the Eurodollar Rate or the Offshore Rate) relating to any extensions of credit or other assets of, or any deposits with or other liabilities or commitments of, such Lender (or its Applicable Lending Office), Issuing Bank or Bank Guarantee Issuer including the Applicable Facility Commitments, Applicable Fronting Commitments, Bank Guarantee Commitment and Letter of Credit Commitment of such Lender, Issuing Bank or Bank Guarantee Issuer hereunder; or (iii) shall impose on such Lender (or its Applicable Lending Office), Issuing Bank or Bank Guarantee Issuer or the London or applicable offshore interbank market any other condition affecting this Agreement or any Note or any of such extensions of credit or liabilities or commitments; and the result of any of the foregoing is to increase the cost to such Lender (or its Applicable Lending Office), Issuing Bank or Bank Guarantee Issuer of making, Converting into, Continuing, or maintaining or participating in any Fixed Rate Loan or Reimbursement Obligation or issuing any Letter of Credit or Bank Guarantee or to reduce any sum received or receivable by such Lender (or its Applicable Lending Office), Issuing Bank or Bank Guarantee 101 108 Issuer under this Agreement or any Note with respect to any Fixed Rate Loan, Reimbursement Obligation, Letter of Credit or Bank Guarantee then each Borrower in the Facility or Facilities in which such Lender, Issuing Bank or Bank Guarantee Issuer has made, or is obligated to make, such Fixed Rate Loans or to participate in Reimbursement Obligations or to issue such Letters of Credit or Bank Guarantees to which such increased costs relate shall pay to such Lender, Issuing Bank or Bank Guarantee Issuer on demand such amount or amounts as will compensate such Lender, Issuing Bank or Bank Guarantee Issuer for such increased cost or reduction. If any Lender, Issuing Bank or Bank Guarantee Issuer requests compensation by any Borrower under this SECTION 6.01(a), the applicable Borrower may, by notice to such Lender, Issuing Bank or Bank Guarantee Issuer (with a copy to the Applicable Facility Agent and the Global Agent), suspend the obligation of such Lender to make or Continue Loans, or to Convert Loans of any other Type into Loans of such Type, or the obligation of such Issuing Bank to issue Letters of Credit or the obligation of the Bank Guarantee Issuer to issue Bank Guarantees of the Type with respect to which such compensation is requested, until the event or condition giving rise to such request ceases to be in effect (in which case the provisions of SECTION 6.04 shall be applicable); provided that such suspension shall not affect the right of such Lender, Issuing Bank or Bank Guarantee Issuer to receive the compensation so requested. (b) If, after the date hereof, any Lender, Issuing Bank or Bank Guarantee Issuer shall have determined that the adoption of any applicable law, rule, or regulation regarding capital adequacy or any change therein or in the interpretation or administration thereof by any Governmental Authority, central bank, or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, central bank, or comparable agency, has or would have the effect of reducing the rate of return on the capital of such Lender, Issuing Bank, Bank Guarantee Issuer or any corporation controlling such Lender, Issuing Bank or Bank Guarantee Issuer as a consequence of such Lender's, Issuing Bank's or Bank Guarantee Issuer's obligations hereunder to a level below that which such Lender, Issuing Bank or Bank Guarantee Issuer or such corporation could have achieved but for such adoption, change, request, or directive (taking into consideration its policies with respect to capital adequacy), then from time to time upon demand each Applicable Borrower in any Facility in which such Lender, Issuing Bank or Bank Guarantee Issuer has made or is obligated to make Loans, or has issued or is obligated to issue Letters of Credit or Bank Guarantees, shall pay to such Lender, Issuing Bank or Bank Guarantee Issuer such additional amount or amounts as will compensate such Lender, Issuing Bank or Bank Guarantee Issuer for such reduction. (c) Each Lender shall promptly notify the Borrowers and the Agents of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender, Issuing Bank or Bank Guarantee Issuer to compensation pursuant to this SECTION 6.01 and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Lender, Issuing Bank or Bank Guarantee Issuer, be otherwise disadvantageous to it. Any Lender claiming compensation under this SECTION 6.01 shall furnish to the Borrowers and the Agents a statement setting forth the additional amount or amounts to be paid to it hereunder which shall be conclusive in the absence of manifest error. In determining such amount, such Lender, Issuing Bank or Bank Guarantee Issuer may use any reasonable averaging and attribution methods. 102 109 6.02 LIMITATION ON TYPES OF LOANS. If on or prior to the first day of any Interest Period for any Fixed Rate Loan: (a) the Applicable Facility Agent in the Facility in which such Fixed Rate Loan is to be made or Continued or Converted determines (which determination shall be conclusive) that by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate or Offshore Rate or Canadian Facility BA Rate, as the case may be, for such Interest Period; or (b) the Required Fronting Lenders in the Facility in which such Fixed Rate Loan is to be made or Continued or Converted determine (which determination shall be conclusive) and notify the Applicable Facility Agent and the Global Agent that (i) the Eurodollar Rate will not adequately and fairly reflect the cost to the Lenders in such Facility of funding Fixed Rate Loans for such Interest Period or (ii) that the Offshore Rate does not represent, in the case of the UK Facility Lenders, the effective cost to those Lenders for deposits in the Applicable Currency of comparable amounts for the applicable Interest Period or, in the case of the Australian Facility Lenders, the effective bid rate for bills of exchange of such tenor in Australian Dollars for such Lenders or (iii) that the Canadian Facility BA Rate does not represent, in the case of the Canadian Facility Lenders, the effective cost to those Lenders for banker's acceptances of comparable amounts for the applicable Interest Period; then the Applicable Facility Agent shall give the Applicable Borrowers prompt notice thereof specifying the relevant Type of Loans and the relevant amounts or periods, and so long as such condition remains in effect, the Applicable Lenders in such Facility or Facilities shall be under no obligation to make additional Loans of such Type, Continue Loans of such Type, or to Convert Loans of any other Type into Loans of such Type and the Applicable Borrower shall, on the last day(s) of the then current Interest Period(s) for the outstanding Loans of the affected Type, either repay such Loans or Convert such Loans into another Type of Loan in accordance with the terms of this Agreement. 6.03 ILLEGALITY. Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for any Lender or its Applicable Lending Office to make, maintain, or fund any Fixed Rate Loans hereunder, then such Lender shall promptly notify the Applicable Borrowers in the Facility or Facilities in which such Lender has made or is obligated to make such Fixed Rate Loans and such Lender's obligation to make or Continue any Fixed Rate Loans and to Convert other Types of Loans into such Fixed Rate Loans shall be suspended until such time as such Lender may again make, maintain, and fund such Fixed Rate Loans (in which case the provisions of SECTION 6.04 shall be applicable). 6.04 TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to make a particular Type of Fixed Rate Loan or to Continue, or to Convert Loans of any other Type into, Loans of a particular Type shall be suspended pursuant to SECTION 6.01 or 6.03 hereof (Loans of such Type being herein called "Affected Loans" and such Type being herein called the "Affected Type"), such Lender's Affected Loans shall be automatically Converted into, in the case of the US Facility, the Canadian Facility or the Australian Facility, a Floating Rate Loan applicable to the 103 110 Facility or Facilities in which the Affected Loans were made or, in the case of the UK Facility, a UK Facility Alternative Rate Loan (each referred to as "Substitute Base Rate Loans") on the last day(s) of the then current Interest Period(s) for Affected Loans (or, in the case of a Conversion required by SECTION 6.03 hereof, on such earlier date as such Lender may specify to the Applicable Borrower with a copy to the Applicable Facility Agent and the Global Agent) and, unless and until such Lender gives notice as provided below that the circumstances specified in SECTION 6.01 or 6.03 hereof that gave rise to such Conversion no longer exist: (a) to the extent that such Lender's Affected Loans have been so Converted, all payments and prepayments of principal that would otherwise be applied to such Lender's Affected Loans shall be applied instead to its Substitute Base Rate Loans; and (b) all Loans that would otherwise be made or Continued by such Lender as Loans of the Affected Type shall be made or Continued instead as Substitute Base Rate Loans, and all Loans of such Lender that would otherwise be Converted into Loans of the Affected Type shall be Converted instead into (or shall remain as) Substitute Base Rate Loans. If such Lender gives notice to the Applicable Borrowers (with a copy to the Applicable Facility Agent and the Global Agent) that the circumstances specified in SECTION 6.01 or 6.03 hereof that gave rise to the Conversion of such Lender's Affected Loans pursuant to this SECTION 6.04 no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when Loans of the Affected Type made by other Lenders are outstanding, such Lender's Substitute Base Rate Loans shall be automatically Converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding Loans of the Affected Type, to the extent necessary so that, after giving effect thereto, all Loans held by the Lenders holding Loans of the Affected Type and by such Lender are held pro rata (as to principal amounts, Types, and Interest Periods) in accordance with their respective Applicable Fronting Percentage applicable to the Facility or Facilities in which the Affected Loans were made. 6.05 COMPENSATION. Upon the request of any Lender, each Applicable Borrower in any Facility in which such Lender has made or is obligated to make Loans shall pay to such Lender such amount or amounts as shall be sufficient (in the reasonable opinion of such Lender) to compensate it for any loss, cost, or expense (including loss of anticipated profits) incurred by it as a result of: (a) any payment, prepayment, or Conversion of a Fixed Rate Loan for any reason (including, without limitation, the acceleration of the Loans pursuant to SECTION 11.01) on a date other than the last day of the Interest Period for such Loan; or (b) any failure by the Applicable Borrower for any reason (including, without limitation, the failure of any condition precedent specified in ARTICLE VII to be satisfied) to borrow, Convert, Continue, or prepay a Fixed Rate Loan on the date for such borrowing, Conversion, Continuation, or prepayment specified in the relevant notice of borrowing, prepayment, Continuation, or Conversion under this Agreement. 6.06 TAXES. 104 111 (a) Any and all payments by any Borrower to any Lender, Issuing Bank, Bank Guarantee Issuer or Agent under this Agreement and any other Loan Document shall be made free and clear of, and without deduction or withholding for, any Taxes. In addition, each Borrower shall pay all Other Taxes. (b) If any Borrower shall be required by law to deduct or withhold any Taxes, Other Taxes or Further Taxes from or in respect of any sum payable hereunder to any Lender, Issuing Bank, Bank Guarantee or Agent, then: (i) the sum payable shall be increased as necessary so that, after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this SECTION 6.06), such Lender, Issuing Bank, Bank Guarantee Issuer or Agent, as the case may be, receives and retains an amount equal to the sum it would have received and retained had no such deductions or withholdings been made; (ii) such Borrower shall make such deductions and withholdings; (iii) such Borrower shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law; and (iv) such Borrower shall also pay to such Lender, Issuing Bank, Bank Guarantee Issuer or Applicable Facility Agent for the account of such Lender, Issuing Bank, Bank Guarantee Issuer or Agent at the time interest is paid, Further Taxes in the amount that the respective Lender, Issuing Bank, Bank Guarantee Issuer or Agent specifies as necessary to preserve the after-tax yield the Lender, Issuing Bank, Bank Guarantee Issuer or Agent would have received if such Taxes, Other Taxes or Further Taxes had not been imposed. (c) The Company and each Borrower jointly and severally agree to indemnify and hold harmless each Lender, Issuing Bank, Bank Guarantee Issuer and Agent for the full amount of (i) Taxes, (ii) Other Taxes, and (iii) Further Taxes in the amount that the respective Lender, Issuing Bank, Bank Guarantee Issuer or Agent specifies as necessary to preserve the after-tax yield the Lender, Issuing Bank, Bank Guarantee Issuer or Agent would have received if such Taxes, Other Taxes or Further Taxes had not been imposed, and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes, Other Taxes or Further Taxes were correctly or legally asserted. Payment under this indemnification shall be made within 30 days after the date the applicable Lender, Issuing Bank, Bank Guarantee Issuer or Agent makes written demand therefor. (d) Within 30 days after the date of any payment by the applicable Borrower of Taxes, Other Taxes or Further Taxes, such Borrower shall furnish to each Applicable Lender, Issuing Bank, Applicable Bank Guarantee Issuer or Applicable Facility Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment satisfactory to such Lender, Issuing Bank, Bank Guarantee Issuer or Agent. 105 112 (e) If any Borrower is required to pay any amount to any Lender or Agent pursuant to subsection (b) or (c) of this SECTION 6.06, then such Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its Applicable Lending Office so as to eliminate any such additional payment by such Borrower which may thereafter accrue, if such change in the sole judgment of such Lender is not otherwise disadvantageous to such Lender. (f) Each US Facility Lender organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement in the case of each Lender listed on the signature pages hereof and on or prior to the date on which it becomes a US Facility Lender in the case of each other Lender, and from time to time thereafter if requested in writing by any US Facility Borrower or the US Facility Agent (but only so long as such Lender remains lawfully able to do so), shall provide the Company and the US Facility Agent with (i) Internal Revenue Service Form W-8BEN or W-8ECI, as appropriate, or any successor form prescribed by the Internal Revenue Service, certifying that such Lender is entitled to benefits under an income tax treaty to which the United States is a party which reduces the rate of withholding tax on payments of interest or certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States, (ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any successor form prescribed by the Internal Revenue Service, and (iii) any other form or certificate required by any taxing authority (including any certificate required by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying that such Lender is entitled to an exemption from or a reduced rate of tax on payments pursuant to this Agreement or any of the other Loan Documents. (g) Each UK Facility Lender (other than a Lender entitled to receive payments of interest in respect of each UK Facility Loan free of withholding or deduction for or on account of United Kingdom income tax under Section 349(3)(a) of the Income and Corporation Taxes Act 1988 of the United Kingdom (a "UK Qualifying Lender"); provided that this subsection (e) shall apply to a UK Qualifying Lender which loses such status, other than through a change in any applicable law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof after the Closing Date or effective date thereafter it becomes a Lender, from the date of such loss) shall deliver to the appropriate Person such application forms, certificates, documents or other evidence as may be required from time to time, properly completed and duly executed by such UK Facility Lender, to enable the UK Facility Borrowers to be able to pay interest on the UK Facility Loans of such UK Facility Lender without withholding or deduction for or on account of any United Kingdom income tax. (h) Each Canadian Facility Lender that is organized under the laws of any jurisdiction other than Canada or any political subdivision thereof (a "Non-Canadian Lender") agrees to deliver to the Canadian Facility Borrower and Canadian Facility Agent upon request such certificates, documents or other evidence as may be required from time to time, properly completed and duly executed by such Non-Canadian Lender, to establish the basis for any applicable exemption from or reduction of taxes with respect to any payments to such Non-Canadian Lender of principal, interest, fees, commissions or any other amount payable under this Agreement or the Canadian Facility Loans. 106 113 (i) Each Australian Facility Lender that is organized under the laws of any jurisdiction other than Australia or any political subdivision thereof, (a "Non-Australian Lender") agrees to deliver to the Australian Facility Borrowers and Australian Facility Agent upon request such certificates, documents or other evidence as may be required from time to time, properly completed and duly executed by such Non-Australian Lender, to establish the basis for any applicable exemption from or reduction of taxes with respect to any payments to such Non-Australian Lender of principal, interest, fees, commissions or any other amount payable under this Agreement or the Australian Facility Loans, other than with respect to payments made on or in connection with Australian Facility Loans advanced in New Zealand Dollars. (j) For any period with respect to which a Lender has failed to provide the Company and the Applicable Facility Agent with the appropriate form pursuant to SECTION 6.06(f), (g), (h) or (i), as applicable (unless such failure is due to a change in treaty, law, or regulation occurring subsequent to the date on which a form originally was required to be provided), such Lender shall not be entitled to indemnification under SECTION 6.06(a), (b), or (c) with respect to Taxes imposed by the United States, United Kingdom, Canada or Australia, as applicable (specifically exempting from this SECTION 6.06(j), and thereby preserving each Lender's rights to indemnification hereunder with respect to, Taxes imposed by New Zealand); provided, however, that should a Lender, which is otherwise exempt from or subject to a reduced rate of withholding tax, become subject to Taxes because of its failure to deliver a form required hereunder, each Applicable Borrower shall take such steps as such Lender shall reasonably request to assist such Lender to recover such Taxes. (k) Without prejudice to the survival of any other agreement of any Borrower hereunder, the agreements and obligations of each Borrower contained in this SECTION 6.06 shall survive the occurrence of the Total Facility Repayment Date. 6.07 REPLACEMENT LENDER. In the event any Lender seeks additional compensation pursuant to this ARTICLE VI or is restricted from making any Fixed Rate Loan under this Agreement (a "Restricted Lender"), so long as no Default or Event of Default shall have occurred and be continuing and the Company has obtained a commitment from another Lender or an Eligible Assignee to become a Lender for all purposes hereunder, the Company may cause such Restricted Lender to be replaced by, and to assign all its Loans, Applicable Facility Commitments, Applicable Fronting Commitments, Participations and other Obligations owing thereto pursuant to SECTION 13.01 to, such other Lender or an Eligible Assignee reasonably acceptable to the Applicable Facility Agent(s) and the Global Agent which is not similarly restricted and will not seek such additional compensation. Such Restricted Lender agrees to execute and to deliver to the Global Agent and to each Applicable Facility Agent of each Facility in which such Restricted Lender has made or was obligated to make Loans an Assignment and Acceptance with such replacement Lender as provided in SECTION 13.01 hereof upon payment at par of all principal, interest, fees and other amounts owing under this Agreement to such Restricted Lender. The Company shall pay to the Applicable Facility Agent the processing fee required by SECTION 13.01(a)(iv) in connection with such assignment. 107 114 6.08 FUNDING. In the event any Borrower elects to obtain any Loans as Fixed Rate Loans, or elects to Continue any Fixed Rate Loans or Convert any portion of the principal amount of any Floating Rate Loans to Fixed Rate Loans, each Lender may, if it so elects, fulfill its obligation to make or Continue any portion of the principal amount of any Loan as, or to Convert any portion of the principal amount of any Loan into, a Fixed Rate Loan in accordance with any election made by such Borrower by causing a foreign branch or affiliate of such Lender or an international banking facility created by such Lender to make such Fixed Rate Loan; provided, that in such event such Fixed Rate Loan shall be deemed to have been made by such Lender, and the obligation of the Borrower to repay such Fixed Rate Loan shall nevertheless be to such Lender and shall be deemed to be held by such Lender, to the extent of such Fixed Rate Loan, for the account of such foreign branch, affiliate or international banking facility. In addition, the Borrowers hereby consent and agree that, for purposes of any determination to be made for purposes of this Agreement (including SECTIONS 6.01, 6.02, 6.03 and 6.04), it shall be conclusively assumed that each Lender elected to fund all Fixed Rate Loans by purchasing deposits in the Applicable Currency in its eurocurrency office's interbank eurocurrency market. 6.09 ECONOMIC AND MONETARY UNION IN THE EUROPEAN COMMUNITY (a) As a result of the implementation of the European economic and monetary union ("EMU"), the French Franc and the euro are at the Closing Date, and anticipated until December 31, 2001 to be, both recognized by the central bank or comparable governmental authority of France and, subject to SECTION 6.09(e) below, any amount borrowed hereunder by any party hereto in the French Franc shall be payable in French Francs and any amount borrowed hereunder in the euro shall be payable in the euro. After the European Central Bank and/or the comparable government authority ceases to recognize the French Franc, then the amount so payable shall be determined by redenominating or converting such French Francs into the euro at the exchange rate officially fixed by the European Central Bank for the purpose of implementing the EMU. (b) The Applicable Borrowers shall from time to time, at the request of any Lender, pay to such Lender the amount of any losses, damages, liabilities, claims, reduction in yield, additional expense or increased cost incurred by, or of any reduction in any amount payable to or in the effective return on its capital to, or any decrease or delay in the payment of interest or other return foregone by, such Lender or any of its affiliates as a result of any political, tax, liquidity, currency exchange or market risk resulting from the introduction of, changeover to or operation of the euro in any applicable nation or eurocurrency market. (c) Without prejudice and in addition to any method of conversion or rounding prescribed by any EMU Legislation and without prejudice to (i) the liabilities for Indebtedness of the Borrowers to the Lenders under or pursuant to this Agreement or (ii) each Lender's Commitment, any reference in this Agreement to a minimum amount (or an integral multiple thereof) in a national currency of a Subsequent Participant to be paid to or by the UK Facility Agent shall immediately, upon it becoming a Participating Member State, be replaced by a reference to such reasonably comparable and convenient amount (or an integral multiple thereof) in the euro unit as the UK Facility Agent may specify. 108 115 (d) Notwithstanding SECTIONS 3.02, 3.03 and 3.04, if and to the extent that EMU Legislation provides that amounts denominated in the euro or French Franc may be paid within France in either the euro or the French Franc by crediting an account of the creditor in France, payments with respect to the UK Facility Alternative Currency Tranche may be made in either the euro or French Franc. (e) The UK Facility Agent may from time to time further modify the terms of, and practices contemplated by, this Agreement with respect to the euro to the extent the UK Facility Agent determines, in its reasonable discretion, that such modifications are necessary or convenient to reflect new laws, regulations, customs or practices developed in connection with the euro. The UK Facility Agent may effect such modifications, and this Agreement shall be deemed so amended, without the consent of the Borrower or Lenders to the extent such modifications are not materially disadvantageous to the Borrower and the Lenders, upon notice thereto. 109 116 ARTICLE VII Conditions to Closing and to Making Loans, Issuing Letters of Credit and Issuing Bank Guarantees 7.01 CONDITIONS OF CLOSING. The effectiveness of this Agreement is subject to the following conditions precedent: (a) The Global Agent shall have received, on the Closing Date in form and substance satisfactory to the Agents and the Lenders the following: (i) executed originals of each of this Agreement, each Note requested by any Lender, the Guaranty, the LC Account Agreement, the Bank Guarantee Cash Account Agreement and the other Loan Documents, together with all schedules and exhibits thereto in form and substance satisfactory to the Agents and the Lenders; (ii) the favorable written opinion of special U.S. counsel to the Company as US Facility Borrower and Guarantor and to each other Borrower substantially in the form of EXHIBIT G-1 and the favorable written opinion of special New York counsel to the Company as US Facility Borrower and Guarantor and to each other Borrower substantially in the form of EXHIBIT G-2, each dated the Closing Date, addressed to the Agents and the Lenders and satisfactory to special counsel to the Global Agent; (iii) resolutions of the board of directors (or of the appropriate committee thereof) of each of the Borrowers certified by its secretary or assistant secretary as of the Closing Date, approving and adopting the Loan Documents to be executed by such Borrower, and authorizing the execution and delivery thereof; specimen signatures of officers of each Borrower executing the Loan Documents, certified by the Secretary or Assistant Secretary of such Borrower; (iv) a certificate of the secretary or assistant secretary of each Borrower as to the absence of any change to the Organizational Documents of each of the Borrowers since the date of the Existing Credit Agreement and that such Organizational Documents remain in full force and effect; (v) a certificate of the secretary or assistant secretary of each Borrower as to the absence of any change to the Operating Documents of each of the Borrowers since the date of the Existing Credit Agreement and that such Operating Documents remain in full force and effect; (vi) certificates issued as of a recent date by the Secretary of State or comparable official of the jurisdiction of the formation of each of the Borrowers as to the corporate good standing of such Borrower therein; 110 117 (vii) all fees payable by the Borrowers on the Closing Date to the Agents and the Lenders; (viii) financial statements of the Borrower and its Subsidiaries required to be delivered pursuant to SECTION 8.02(b)(i) hereof if not previously delivered to the Lenders pursuant to the Existing Credit Agreement; (ix) a certificate of an Authorized Representative of the Company reasonably satisfactory to the Agents and the Lenders as to the matters set forth in SECTION 7.01(b)(ii) through (iv) and 7.01(c)(i); and (x) such other documents, instruments, certificates and opinions as any Agent or any Lender may reasonably request on or prior to the Closing Date in connection with the consummation of the transactions contemplated hereby; (b) Each of the following shall have occurred or be true: (i) The Global Agent shall have completed all due diligence with respect to the Company and its Subsidiaries in scope and determination satisfactory to the Global Agent in its sole discretion; (ii) There shall not be any action, suit, investigation or proceeding pending or threatened in any court or before any arbitrator or governmental instrumentality that (a) purports to affect the transactions contemplated hereby, (b) would reasonably be expected to have a Material Adverse Effect or (c) would reasonably be expected to have a material adverse effect on the ability of the Loan Parties to perform their respective obligations hereunder or under the other Loan Documents; (iii) The Company and its Subsidiaries shall be in compliance with all existing financial and material contractual obligations before and immediately after giving effect to the financings and other transactions contemplated hereby; (iv) The Company and its Subsidiaries shall have received all government, shareholder and third-party approvals, consents and waivers, and shall have made or given all necessary filings and notices, as shall be required to consummate the transactions contemplated hereby without the occurrence of any default under, conflict with or violation of (A) any applicable law, rule, regulation, order or decree of any court or other Governmental Authority or arbitral authority, (B) any Organizational Document or Operating Agreements of the Company or any Subsidiary or (C) any agreement, document or instrument to which any of the Company or any Subsidiary is a party or by which any of them or their properties is bound, if such default, conflict or violation would reasonably be expected to result in a Material Adverse Effect; and all applicable waiting periods shall have expired without any action being taken or threatened in writing by any authority that could restrain, prevent or impose any material adverse conditions on the making of any Loan or other transactions contemplated hereby, and no law or regulation 111 118 shall be applicable which would reasonably be expected to have a Material Adverse Effect; and (c) In the good faith judgment of the Agents and the Lenders: (i) There shall not have occurred a material adverse change in the business, assets, liabilities, operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken as a whole since February 29, 2000, except as communicated to the Lenders and the Agents prior to the date hereof, or in the facts or information regarding such entities most recently delivered to the Global Agent by the Company or any Borrower; (ii) There shall not have occurred and be continuing a material adverse change in the market for syndicated credit facilities similar in nature to the Facilities or a material disruption of, or a material adverse change in, financial, banking or capital market conditions, in each case as determined by the Global Agent in its reasonable discretion. 7.02 CONDITIONS OF LOANS, LETTERS OF CREDIT AND BANK GUARANTEES. The obligations of the Lenders to make any Advances, the Issuing Bank to issue (or renew) Letters of Credit and the Applicable Bank Guarantee Issuer to issue (or renew) Bank Guarantees, on or subsequent to the Closing Date are subject to the satisfaction of the following conditions: (a) in the case of each Advance, the Applicable Facility Agent (or, in the case of Australian Facility Swing Line Loans, the Australian Facility Swing Line Lender) under a specific Facility shall have received a Borrowing Notice if required hereby; (b) the representations and warranties of the Borrowers set forth in ARTICLE VII hereof and in each of the other Loan Documents shall be true and correct on and as of the date of such Advance or Letter of Credit or Bank Guarantee issuance or renewal, with the same effect as though such representations and warranties had been made on and as of such date, except to the extent that such representations and warranties expressly relate to an earlier date and except that the financial statements referred to in SECTION 8.02(b) shall be deemed to be those financial statements most recently delivered to the Agents and the Lenders pursuant to SECTION 9.01 hereof; (c) at the time of each such Advance or the issuance or renewal of a Letter of Credit or Bank Guarantee, no Default or Event of Default shall have occurred and be continuing; (d) immediately after giving effect to a US Facility Advance or the issuance or renewal of a Letter of Credit, (i) the US Facility Outstandings shall not exceed the Total US Facility Commitment and (ii) the US Facility Revolving Credit Outstandings plus Letter of Credit Outstandings shall not exceed the US Facility Revolving Credit Facility Commitment; (e) immediately after giving effect to a Canadian Facility Advance, (i) the Canadian Facility Outstandings shall not exceed the Total Canadian Facility Commitment, (ii) the Canadian Facility Renewable Tranche Outstandings shall not exceed the Canadian Facility 112 119 Renewable Tranche Commitment, and (iii) the Canadian Facility Full Maturity Tranche Outstandings shall not exceed the Canadian Facility Full Maturity Tranche Commitment; (f) immediately after giving effect to a UK Facility Advance or the issuance or renewal of a Bank Guarantee, (i) the UK Facility Outstandings shall not exceed the Total UK Facility Commitment, and the sum of the French Franc Outstandings plus the euro Outstandings shall not exceed the Total UK Alternative Currency Commitment, and (ii) the aggregate amount borrowed by, and outstanding to, any UK Facility Borrower shall not exceed its UK Facility Maximum Amount; (g) immediately after giving effect to an Australian Facility Advance, (i) the Australian Facility Outstandings shall not exceed the Total Australian Facility Commitment and the New Zealand Dollar Outstandings shall not exceed the Total New Zealand Dollar Commitment, and (ii) the aggregate Australian Dollar Equivalent Amount borrowed by, and outstanding to, any Australian Facility Borrower shall not exceed its Australian Facility Maximum Amount; (h) immediately after giving effect to an Australian Facility Swing Line Loan, the Australian Facility Swing Line Outstandings shall not exceed AUS $5,000,000; (i) in the case of the issuance of a Letter of Credit, the US Facility Borrower shall have executed and delivered to the Issuing Bank an Application and Agreement for Letter of Credit in form and content acceptable to the Issuing Bank together with such other instruments and documents as it shall request; (j) immediately after giving effect to the issuance of a Letter of Credit or renewal thereof, the aggregate US Dollar Equivalent Amount of all outstanding Participations in Letters of Credit and Reimbursement Obligations arising from Letters of Credit (or in the case of the Issuing Bank, its remaining interest after deduction of all Participations in Letters of Credit and Reimbursement Obligations arising from Letters of Credit of other US Facility Lenders) for each US Facility Lender and in the aggregate shall not exceed, respectively, (X) such US Facility Lender's Letter of Credit Commitment or (Y) the Total Letter of Credit Commitment; (k) in the case of the issuance of a Bank Guarantee, a UK Facility Borrower shall have executed and delivered to the Applicable Bank Guarantee Issuer a Bank Guarantee Issuance Agreement in form and content acceptable to the Applicable Bank Guarantee Issuer together with such other instruments and documents as it shall request; (l) immediately after giving effect to the issuance of a Bank Guarantee or renewal thereof, the aggregate amount of all outstanding Participations in Bank Guarantees and Reimbursement Obligations arising from Bank Guarantees (or in the case of the Applicable Bank Guarantee Issuer, its remaining interest after deduction of all Participations in Bank Guarantees and Reimbursement Obligations arising from Bank Guarantees of other UK Facility Lenders) for each UK Facility Lender and in the aggregate shall not exceed, respectively, (X) such UK Facility Lender's Bank Guarantee Commitment or (Y) the Total Bank Guarantee Commitment; and 113 120 (m) in the case of any Advance to Carlton Cards Limited or UK Greetings Limited under the UK Facility, the Global Agent shall have received evidence that such UK Facility Borrower shall have filed its statutory accounts required under the laws of England. Each request for a borrowing, Continuation or Conversion of Loans or the issuance or renewal of a Letter of Credit or Bank Guarantee shall constitute a representation and warranty by the Borrowers that the conditions set forth in clauses (b) and (c) above have been satisfied as of the date thereof and that as of the date of such Advance or issuance or renewal of a Letter of Credit or Bank Guarantee there has not been any material adverse change in the business, operations or financial condition of the Company and its Subsidiaries since the date of the financial statements most recently delivered to the Agents and the Lenders pursuant to SECTION 9.01 hereof. 114 121 ARTICLE VIII Representations and Warranties 8.01 REPRESENTATIONS AND WARRANTIES AS TO BORROWERS AND SUBSIDIARIES. Each Borrower represents and warrants to and in favor of the Agents and each Lender with respect to itself and to its Subsidiaries (which representations and warranties shall survive the delivery of the documents mentioned herein, the making of Loans and the issuances of the Letters of Credit and Bank Guarantees) that: (a) ORGANIZATION AND AUTHORITY. (i) each Borrower and each of its Subsidiaries is an entity duly organized and validly existing under the laws of the jurisdiction of its formation; (ii) each Borrower and each of its Subsidiaries (A) has the requisite power and authority to own its properties and assets and to carry on its business as now being conducted, and (B) is qualified to do business in every jurisdiction in which failure so to qualify would have a Material Adverse Effect; (iii) each Borrower has the requisite power and authority to execute, deliver and perform this Agreement and the Notes, and to borrow hereunder, and to execute, deliver and perform each of the other Loan Documents to which it is a party, including without limitation, in the case of the Company, the Guaranty; and (iv) when executed and delivered, each of the Loan Documents to which such Borrower is a party will be valid and binding obligations of such Borrower, enforceable against such Borrower in accordance with its terms, subject to the effect of any applicable bankruptcy, moratorium, insolvency, reorganization or other similar law affecting the enforceability of creditors' rights generally and to the effect of general principles of equity which may limit the availability of equitable remedies (whether in a proceeding at law or in equity). (b) LOAN DOCUMENTS. The execution, delivery and performance by each Borrower of each of the Loan Documents to which it is a party: (i) have been duly authorized by all requisite Organizational Action (including any required shareholder approval) of such Borrower required for the lawful execution, delivery and performance thereof; (ii) do not violate any provisions of (A) applicable law, rule or regulation, (B) any judgment, writ, order, determination, decree or arbitral award of any Governmental Authority or arbitral authority binding on such Borrower or its Subsidiaries or its or their properties, (C) the Organizational Documents or Operating Documents of such Borrower or its Subsidiaries or (D) any provisions of any indenture, agreement or other instrument 115 122 to which such Borrower or any of its Subsidiaries is a party, or by which the properties or assets of such Borrower or its Subsidiaries are bound; (iii) does not and will not be in conflict with, result in a breach of or constitute an event of default, or an event which, with notice or lapse of time, or both, would constitute an event of default, under any contract, indenture, agreement or other instrument or document to which the Borrower or any of its Subsidiaries is a party or by which any of their properties are bound; and (iv) does not and will not result in the creation or imposition of any Lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of such Borrower or any of its Subsidiaries. (c) SOLVENCY. Each Borrower and each of its Subsidiaries is Solvent after giving effect to the transactions contemplated by this Agreement and the other Loan Documents and assuming an Advance on the Closing Date equal to the Applicable Total Facility Commitment for the Facility in which such Borrower is an Applicable Borrower. 8.02 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants with respect to itself and its Subsidiaries (which representations and warranties shall survive the delivery of the documents mentioned herein, the making of Loans and the issuance of the Letters of Credit and Bank Guarantees) that: (a) SUBSIDIARIES AND STOCKHOLDERS. It has no Subsidiaries other than those Persons listed as Subsidiaries in SCHEDULE 8.02(a) hereto and additional Subsidiaries acquired after the Closing Date as permitted under SECTION 10.08 hereof. The outstanding shares or other equity interests (including options, warrants and other rights to acquire any interest) of each such Subsidiary have been duly authorized and validly issued and are fully paid and nonassessable; and the Company and each such Subsidiary owns beneficially and of record all the shares and other interests it is listed as owning in SCHEDULE 8.02(a), free and clear of any Lien. (b) FINANCIAL CONDITION. (i) The Company has heretofore furnished to each Lender an audited unqualified consolidated balance sheet of the Company and its Subsidiaries as at February 29, 2000 and the notes thereto and the related consolidated statements of income, stockholders' equity and cash flow for the Fiscal Year then ended, all as examined and certified by Ernst & Young, LLP. Except as set forth therein, such financial statements (including the notes thereto) present fairly the financial condition of the Company and its Subsidiaries as of the end of such Fiscal Year and results of their operations and the changes in their stockholders' equity for the Fiscal Year then ended, all in conformity with Generally Accepted Accounting Principles applied on a Consistent Basis. Except as disclosed therein, neither the Company nor any Subsidiary has, as of the date hereof, any known and material direct liability; 116 123 (ii) since the later of (A) the date of the audited financial statements delivered pursuant to SECTION 8.02(b)(i) hereof or (B) the date of the audited financial statements most recently delivered pursuant to SECTION 9.01(a) hereof, the Company and its Subsidiaries have not suffered or endured any Material Adverse Effect; and (iii) except as set forth in (A) the audited financial statements delivered pursuant to SECTION 8.02(b)(i) hereof or (B) the audited financial statements most recently delivered pursuant to SECTION 9.01(a) hereof, the Company and its Subsidiaries have not incurred, other than in the ordinary course of business, any material Contingent Obligation or other liability, obligation or commitment, contingent or otherwise, which remain outstanding or unsatisfied. (c) TITLE TO PROPERTIES. The Company and its Subsidiaries have good and marketable title to all their respective real and personal properties, subject to no transfer restrictions, or Liens of any kind, except for the transfer restrictions and Liens permitted under SECTION 10.03 hereof. (d) TAXES. The Company and its Subsidiaries have filed or caused to be filed all federal, state and local tax returns which are required to be filed by them and, except for taxes and assessments being contested in good faith by appropriate proceedings diligently conducted and against which satisfactory reserves reflected in the financial statements described in SECTION 8.02(b)(i) as required by Generally Accepted Accounting Principles have been established, have paid or caused to be paid all taxes as shown on said returns or on any assessment received by them, to the extent that such taxes have become due. (e) OTHER AGREEMENTS. Neither the Company nor any Subsidiary is (i) a party to or subject to any judgment, order, decree or any agreement or instrument, or subject to other restrictions, which individually or in the aggregate could reasonably be expected to result in a Material Adverse Effect; or (ii) in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument to which the Company or any Subsidiary is a party, which default, if not remedied within any applicable grace period, could reasonably be expected to result in a Material Adverse Effect. (f) LITIGATION. Except as set forth on SCHEDULE 8.02(f) attached hereto, there is no action, suit, investigation or proceeding at law or in equity or by or before any governmental instrumentality or agency or arbitral body pending, or, to the best knowledge of the Company, threatened by or against the Company or any Subsidiary or affecting the Company or any Subsidiary or any properties or rights of the Company or any Subsidiary, which, if determined adversely to the Company or such Subsidiary, could reasonably be expected to result in a Material Adverse Effect. (g) MARGIN STOCK. The proceeds of the borrowings made hereunder will be used by the Company and the other Borrowers only for the purposes set forth in SECTION 2.11, SECTION 117 124 3.11, SECTION 4.11 and SECTION 5.11 hereof. None of such proceeds will be used, directly or indirectly, for the purpose of purchasing or carrying any margin stock (as such term is defined in Regulation U, as amended (12 C.F.R. Part 221), of the Board) or for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry margin stock or for any other purpose which might constitute any of the Loans under this Agreement a "purpose credit" within the meaning of said Regulation U or Regulation X (12 C.F.R. Part 224) of the Board. Neither the Company nor any agent acting in its behalf has taken or will take any action which might cause this Agreement or any of the documents or instruments delivered pursuant hereto to violate any regulation of the Board or to violate the Securities Exchange Act of 1934, or the Securities Act of 1933, or any state securities laws, in each case as in effect on the date hereof. (h) INTELLECTUAL PROPERTY. The Company and its Subsidiaries own or have the right to use, under valid license agreements or otherwise, all patents, licenses, franchises, trademarks, trademark rights, trade names, trade name rights, trade secrets, copyrights and know how necessary and material to the conduct of their businesses as now conducted, in all cases without known conflict with any patent, license, franchise, trademark, trade secret and confidential commercial or proprietary information, trade name, copyright, rights to trade secrets or other proprietary rights of any other Person. (i) NO UNTRUE STATEMENT. Neither (a) this Agreement or any other Loan Document or certificate or document executed and delivered by or on behalf of the Company or any other Borrower or any Subsidiary in accordance with or pursuant to any Loan Document nor (b) any statement, representation or warranty provided to the Agents in connection with the negotiation or preparation of the Loan Documents contains any misrepresentation or untrue statement of material fact or omits to state a material fact necessary, in light of the circumstance under which it was made, in order to make any such warranty, representation or statement contained therein not misleading. (j) NO CONSENTS, ETC. Neither the respective businesses or properties of the Company or any Subsidiary nor any circumstance in connection with the execution, delivery and performance of the Loan Documents and the transactions contemplated thereby, is such as to require a consent, approval or authorization of, or filing, registration or qualification with, any Governmental Authority or any other Person on the part of the Company or any Borrower or any Subsidiary as a condition to the execution, delivery and performance of, or consummation of the transactions contemplated by, this Agreement or the other Loan Documents, or if so, such consent, approval, authorization, filing, registration or qualification has been duly obtained or effected, as the case may be. (k) ERISA. (i) The Company, each ERISA Affiliate and each Subsidiary is in compliance with all applicable provisions of ERISA, the Code and the regulations and published interpretations thereunder and in compliance with all Foreign Benefit Laws and the regulations and published interpretations thereunder with respect to all Employee Benefit Plans, except for any required amendments for which the remedial amendment period as 118 125 defined in Section 401(b) of the Code has not yet expired and except for failures to so comply that would not, in the aggregate, reasonably be expected to result in a Material Adverse Effect. Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code has been determined, or the Company or such ERISA Affiliate or its Subsidiaries is in the process of obtaining a determination by the Internal Revenue Service, to be so qualified, each trust related to such Employee Benefit Plan has been determined to be exempt under Section 501(a) of the Code, and each Employee Benefit Plan subject to any Foreign Benefit Law has received the required approvals by any Governmental Authority regulating such Employee Benefit Plan, except for such qualifications, exemptions and approvals the absence of which could not reasonably be expected to result in a Material Adverse Effect. No material liability has been incurred by the Company or any ERISA Affiliate (including, without limitation, taxes, penalties, funding deficiencies and required contributions, installments or other payments) which remains unsatisfied with respect to any Employee Benefit Plan or any Multiemployer Plan. No Termination Event has occurred or is reasonably expected to occur with respect to any Employee Benefit Plan, and neither the Company nor any ERISA Affiliate has incurred any unpaid withdrawal liability with respect to any Multiemployer Plan, which event or liability could reasonably be expected to result in a Material Adverse Effect; and (ii) To the best of the Company's knowledge, each Employee Benefit Plan subject to Title IV of ERISA or the funding of which is regulated by any Foreign Benefit Law, maintained by the Company, any ERISA Affiliate or any Subsidiary, has been administered in accordance with its terms and is in compliance in all material respects with all applicable requirements of ERISA and other applicable laws, regulations and rules and any applicable Foreign Benefit Law. (l) NO DEFAULT. As of the date hereof, there does not exist any Default or Event of Default hereunder. (m) HAZARDOUS MATERIALS. The Company, each Borrower and each Subsidiary are in compliance with all applicable Environmental Laws, except for such noncompliance that could not reasonably be expected to result in a Material Adverse Effect, and have been issued and maintain all required federal, state and local permits, licenses, certificates and approvals pertaining to Hazardous Materials that are necessary to the conduct of their businesses, except for any such permits, licenses, certificates or approvals the absence of which could not reasonably be expected to result in a Material Adverse Effect. Neither the Company, any Borrower nor any Subsidiary has been notified of any pending or threatened action, suit, proceeding or investigation, and neither the Company, any Borrower nor any Subsidiary is aware of any fact, which (A) calls into question, or could reasonably be expected to call into question, compliance by the Company, any Borrower or any Subsidiary with any Environmental Laws, except for such noncompliance that could not reasonably be expected to result in a Material Adverse Effect, or (B) seeks, or could reasonably be expected to form the basis of a meritorious proceeding to seek to suspend, revoke or terminate any license, permit, certification or approval necessary for the operation of the Company's or any Subsidiary's facility or the generation, handling, storage, treatment or disposal of any Hazardous Material that is necessary to the conduct of its business, except for any such license, permit, certification or approval the absence 119 126 of which could not reasonably be expected to result in a Material Adverse Effect, or (iii) seeks to cause, or could reasonably be expected to form the basis of a meritorious proceeding to cause, any property of the Company or any Subsidiary to be subject to any restrictions on ownership, use, occupancy or transferability under any Environmental Law, which such restrictions could reasonably be expected to have a Material Adverse Effect, or (iv) constitutes a reasonable basis to conclude that the Company or any Subsidiary is a potentially responsible party with regard to any release or threatened release of a Hazardous Material. 120 127 ARTICLE IX Affirmative Covenants Until the Total Facility Repayment Date, unless the Required Lenders shall otherwise consent in writing, the Company will and will cause each Subsidiary to: 9.01 FINANCIAL REPORTS, ETC. (a) As soon as practical and in any event within 95 days after the end of each Fiscal Year of the Company, deliver or cause to be delivered to the Agents and each Lender (i) consolidated balance sheets of the Company and its Subsidiaries as at the end of such Fiscal Year, and the notes thereto, and the related consolidated statements of income, stockholders' equity and cash flow and the respective notes thereto for such Fiscal Year, setting forth in each case comparative financial statements for the preceding Fiscal Year, all prepared in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis and containing, with respect to the consolidated financial statements, opinions of Ernst & Young, LLP, or such other independent certified public accountants selected by the Company and approved by the Required Lenders, which are unqualified as to the scope of the audit performed and as to the "going concern" status of the Company and its Subsidiaries and without any exception not acceptable to the Lenders; (ii) a copy of the Company's Form 10-K as filed with the Securities and Exchange Commission; and (iii) a certificate of an Authorized Representative demonstrating compliance with SECTIONS 10.01 and 10.02 of this Agreement as of such Fiscal Year end and the Outstandings under each Facility as of such Fiscal Year end, which certificate shall be in the form attached as EXHIBIT H; (b) as soon as practical and in any event within 50 days after the end of each fiscal quarter (except the last fiscal quarter of the Fiscal Year) of the Company, deliver to the Agents and each Lender (i) consolidated balance sheets of the Company and its Subsidiaries as at the end of such fiscal quarter and the related consolidated statements of income, stockholders' equity and cash flow for such fiscal quarter and for the period from the beginning of the Fiscal Year through the end of such reporting period, prepared without notes and accompanied by a certificate of an Authorized Representative to the effect that such financial statements present fairly the financial position of the Company and its Subsidiaries as of the end of such fiscal period and the results of their operations and the changes in their financial position for such fiscal period, in conformity with the standards set forth in GAAP with respect to interim financials; (ii) a copy of the Company's Form 10-Q for such quarterly period as filed with the Securities and Exchange Commission; and (iii) a certificate of an Authorized Representative as of such fiscal quarter end similar to that required pursuant to SECTION 9.01(a)(iii); (c) promptly upon their becoming available to the Company, deliver to the Agents and each Lender a copy of (i) all regular or special reports or effective registration statements which the Company or any Subsidiary shall file with the Securities and Exchange Commission (or any successor thereto) or any securities exchange, and (ii) all reports, proxy statements, 121 128 financial statements and other information distributed by the Company to its stockholders, bondholders or the financial community in general; and (d) promptly, from time to time, deliver or cause to be delivered to the Agents or to each Lender such other information regarding the Company's and each Subsidiary's operations, business affairs and financial condition as any such Agent or Lender may reasonably request to the extent such statements exist. The Agents and the Lenders are hereby authorized to deliver a copy of any such financial or other information delivered hereunder to the Lenders (or any affiliate of any Lender) or to the Agents, to any Governmental Authority having jurisdiction over any of the Agents or the Lenders pursuant to any written request therefor or in the ordinary course of examination of loan files, or to any other Person who shall acquire or consider the acquisition of a participation interest in or assignment of any Loan permitted by this Agreement. 9.02 DEBT RATINGS. Notify the Global Agent of any change in any Debt Rating on the same date that such change is effective. 9.03 MAINTAIN PROPERTIES. Maintain all properties necessary to its operations in good working order and condition, ordinary wear and tear excepted, make all needed repairs, replacements and renewals to such properties, and maintain free from Liens all trademarks, trade names, patents, copyrights, trade secrets, know-how and other intellectual property and proprietary information (or adequate licenses thereto), in each case as are necessary to conduct its business as currently conducted or as contemplated hereby, all in accordance with customary business practices. 9.04 EXISTENCE, QUALIFICATION, ETC. Except as otherwise expressly permitted under SECTION 10.05 hereof, do or cause to be done all things necessary to preserve and keep in full force and effect its existence and all material rights and franchises, trade names, trademarks and permits and maintain its license or qualification to do business as a foreign corporation and good standing in each jurisdiction in which its ownership or lease of property or the nature of its business makes such license or qualification necessary and in which the failure to maintain such license or qualification could reasonably be expected to result in a Material Adverse Effect. 9.05 REGULATIONS AND TAXES. Comply with or contest in good faith by appropriate proceedings diligently conducted all statutes and governmental regulations and pay all taxes, assessments, governmental charges, claims for labor, supplies, rent and any other obligation which, if unpaid, might become a Lien against any of its properties except liabilities being contested in good faith by appropriate proceedings diligently conducted and against which adequate reserves as required by GAAP have been established. 9.06 INSURANCE. Maintain with financially sound and reputable insurers insurance with respect to its properties and business and against such liabilities, casualties and contingencies of such types and in such amounts as is customary in the case of corporations engaged in the same or a similar business or having similar properties similarly situated. 122 129 9.07 TRUE BOOKS. Keep true books of record and account in which full, true and correct entries will be made of all of its dealings and transactions, and set up on its books such reserves as may be required by Generally Accepted Accounting Principles with respect to doubtful accounts and all taxes, assessments, charges, levies and claims and with respect to its business in general, and include such reserves in interim as well as year-end financial statements. 9.08 RIGHT OF INSPECTION. Permit any Person designated by any Lender or any Agent, at such Lender's or Agent's expense, to visit and inspect any of the properties, corporate books and financial reports of the Company and its Subsidiaries, and to discuss its affairs, finances and accounts with its principal officers and independent certified public accountants, all at such reasonable times, at reasonable intervals and with reasonable prior notice; provided, however, that following the occurrence and during the continuation of any Default or Event of Default, such visits or inspections shall be at the expense of the Company. 9.09 OBSERVE ALL LAWS. Conform to and duly observe in all material respects all laws, rules and regulations and all other valid requirements of any Governmental Authority with respect to the conduct of its business. 9.10 COVENANTS EXTENDING TO SUBSIDIARIES. Cause each of its Subsidiaries to do with respect to itself, its business and its assets, each of the things required of the Company in SECTIONS 9.02 through 9.08, inclusive, SECTION 9.14 and SECTION 9.16. 9.11 OFFICER'S KNOWLEDGE OF DEFAULT. Upon any executive officer of the Company obtaining knowledge of the occurrence of any Default or Event of Default hereunder or under any other obligation of the Company or any Subsidiary to any Lender, or any event, development or occurrence which could reasonably be expected to result in a Material Adverse Effect, cause such executive officer or an Authorized Representative promptly to notify the Agents and each of the Lenders of the nature thereof, the period of existence thereof, and what action the Company or such Subsidiary proposes to take with respect thereto. 9.12 SUITS OR OTHER PROCEEDINGS. Upon any executive officer of the Company obtaining knowledge of any litigation, dispute or other proceedings being instituted or threatened against the Company or any Subsidiaries, or any attachment, levy, execution or other process being instituted against any assets of the Company or any Subsidiaries, making a claim or claims in an aggregate amount greater than $10,000,000 not otherwise covered by insurance, or could reasonably be expected to have a material adverse effect on the Company and its Subsidiaries, cause such executive officer or an Authorized Representative promptly to deliver to the Agents and each of the Lenders written notice thereof stating the nature and status of such litigation, dispute, proceeding, levy, execution or other process. 9.13 ENVIRONMENTAL COMPLIANCE. (a) If the Company or any Subsidiary shall receive in writing any letter, notice, complaint, order, directive, claim or citation alleging that the Company or any Subsidiary (i) has violated any Environmental Law, (ii) has released or is about to release any Hazardous Material other than in compliance with all Environmental Laws (or suffered or permitted such action by 123 130 any other Person on or in respect of property owned or operated by the Company or any Subsidiary or any other Person handling, transporting, or disposing of any Hazardous Material on behalf of the Company or any Subsidiary), or (iii) is liable for the costs of cleaning up, removing, remediating or responding to a release or threatened release of Hazardous Materials, which allegation in any of the foregoing instances, if true, could reasonably be expected to result in a Material Adverse Effect, the Company and any Subsidiary shall (a) provide prompt written notice thereof to the Agents describing in reasonable detail the nature of the matter and what action the Company or the applicable Subsidiary proposes to take with respect thereto, and (b) within the time period permitted by the applicable Environmental Law or the Governmental Authority responsible for enforcing such Environmental Law, remove or remedy, or cause the applicable Subsidiary to remove or remedy, such violation or release or satisfy such liability, unless and only during the period that the applicability of the Environmental Law, the fact of such violation or liability or the action required to remove or remedy such violation is being contested by the Company or the applicable Subsidiary by appropriate proceedings diligently conducted and all reserves with respect thereto as may be required under Generally Accepted Accounting Principles, if any, have been made, and no Lien in connection therewith shall have attached to any property of the Company or the applicable Subsidiary which shall have become enforceable against creditors of such Person. (b) Except for Hazardous Materials necessary for the routine maintenance of the properties owned or operated by the Company and its Subsidiaries or as brought on to such properties in the ordinary course of the Company's or any Subsidiary's business, which Hazardous Material shall be used in compliance in all material respects with all applicable Environmental Laws, the Company covenants that it shall, and shall cause each Subsidiary to, not permit any Hazardous Materials to be brought on to the real property owned or operated by the Company and its Subsidiaries, or if so brought or found located thereon, shall be immediately removed, with proper disposal, and all environmental cleanup requirements shall be diligently undertaken pursuant to all Environmental Laws unless the presence of such Hazardous Materials could not reasonably be expected to result in a Material Adverse Effect. 9.14 FURTHER ASSURANCES. At the Borrowers' cost and expense, upon request of any of the Agents, duly execute and deliver or cause to be duly executed and delivered, to the Agents such further instruments, documents and certificates, and do and cause to be done such further acts that may be reasonably necessary or advisable in the opinion of the Agents or any of them to carry out more effectively the provisions and purposes of this Agreement and the other Loan Documents. 9.15 CONTINUED OPERATIONS. Continue at all times to conduct its business and engage principally in the same line or lines of business substantially as heretofore conducted. 9.16 USE OF PROCEEDS. Use the proceeds of the Loans solely for the purposes specified in SECTIONS 2.11, 3.11, 4.11 and 5.11, as applicable. 9.17 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS. (a) In addition to any optional payments of principal of the Loans effected under SECTIONS 2.07, 3.07, 4.07, and 5.07, the Borrowers shall make, or shall cause the applicable Subsidiary to make, prepayments in the 124 131 manner set forth in subsection (b) below in amounts equal to (i) one hundred percent (100%) of the first $150,000,000 in aggregate Net Proceeds from Debt Offerings and Permitted Asset Securitizations permitted under SECTION 10.13, collectively, (ii) fifty percent (50%) of the aggregate Net Proceeds above $150,000,000 in amount from Debt Offerings and Permitted Asset Securitizations permitted under SECTION 10.13, collectively, and (iii) one hundred percent (100%) of the Net Proceeds above $50,000,000 in aggregate Net Proceeds from Asset Dispositions permitted under SECTION 10.04(b)(i) and (ii). (b) All mandatory prepayments made pursuant to this SECTION 9.17 shall (i) be made pro rata (such pro rata determination based on the Applicable Total Facility Commitment of each Facility) among the Facilities to the Applicable Facility Agent for the benefit of the Applicable Lenders within ten (10) Business Days of receipt of such proceeds and upon not less than five (5) Business Days' written notice to the Applicable Facility Agents, which notice shall include a certificate of an Authorized Representative setting forth in reasonable detail the calculations utilized in computing the amount of such prepayments, and (ii) permanently reduce the Applicable Total Facility Commitment of the Facility to which payment is made by the amount of such payment; provided that (A) the Total US Facility Commitment shall not be reduced below $250,000,000 so long as the US Facility Borrowers shall not have elected the US Term Loan option provided for in SECTION 2.13 at the time of the mandatory prepayment required by this SECTION 9.17 and all amounts that would have been applied to permanently reduce the Total US Facility Commitment but for this clause (A) shall be applied pro rata among the other Facilities, (B) if the US Facility Borrowers shall have elected the US Term Loan option provided for in SECTION 2.13 at the time of the mandatory prepayment required by this SECTION 9.17, such mandatory prepayments shall be applied to the US Term Loans installments of principal in inverse order of their maturities (as adjusted to give effect to any prior payments or prepayments of principal), and (C) if the Canadian Facility Borrowers shall have elected the Canadian Term Loan option provided for in SECTION 4.13 at the time of the mandatory prepayment required by this SECTION 9.17, such mandatory prepayments shall be applied to the Canadian Term Loans installments of principal in inverse order of their maturities (as adjusted to give effect to any prior payments or prepayments of principal). (c) The Applicable Facility Agent shall give each Applicable Lender, within one (1) Business Day, telefacsimile notice of each notice of prepayment required by this SECTION 9.17. 9.18 OPINIONS OF FOREIGN COUNSEL. (a) On or before May 15, 2001, deliver to the Global Agent the favorable written opinions with respect to the Company and its Subsidiaries, the Loan Documents and the transactions contemplated thereunder of (i) special Australian counsel to the Australian Borrowers and (ii) special Canadian counsel to the Canadian Borrower, in each case addressed to the Agents and the Lenders and satisfactory in form, scope and substance to special counsel to the Global Agent; and (b) On or before May 30, 2001, deliver to the Global Agent (i) evidence that Carlton Cards Limited and UK Greetings Limited have filed their statutory accounts required under the laws of England and (ii) the favorable written opinion with respect to the Company and its Subsidiaries, the Loan Documents and the transactions contemplated thereunder of special UK counsel to the UK Borrowers. 125 132 ARTICLE X Negative Covenants Until the Total Facility Repayment Date, unless the Required Lenders shall otherwise consent in writing, the Company will not, nor will it permit any Subsidiary to: 10.01 CONSOLIDATED FUNDED INDEBTEDNESS TO CONSOLIDATED TOTAL CAPITALIZATION. Permit the ratio of Consolidated Funded Indebtedness to Consolidated Total Capitalization to exceed (a) 0.60 to 1.00 at any time during the period from October 15, 2001 through January 15, 2002 and (b) 0.55 to 1.00 at any other time. 10.02 CONSOLIDATED EBIT TO CONSOLIDATED INTEREST EXPENSE. Permit at any time the ratio of Consolidated EBIT to Consolidated Interest Expense for the Four-Quarter Period immediately preceding the date of computation to be less than that set forth below opposite each such Four-Quarter Period:
Four-Quarter Period Ending Ratio of Consolidated EBIT To Consolidated Interest Expense February 2001 3.00 to 1.00 May 2001 2.15 to 1.00 August 2001 2.00 to 1.00 November 2001 1.75 to 1.00 February 2002 1.75 to 1.00 May 2002 2.00 to 1.00 August 2002 2.00 to 1.00 November 2002 2.50 to 1.00 February 2003 and Thereafter 3.00 to 1.00
10.03 LIENS. Incur, create or permit to exist any Lien, charge or other encumbrance of any nature whatsoever with respect to any property or assets now owned or hereafter acquired by the Company or any of its Subsidiaries, other than (a) Liens existing as of the date hereof, and (i) as set forth in SCHEDULE 10.03 attached hereto, (ii) as otherwise exist in France, South Africa and Mexico or (iii) which attach only to office or retail equipment; (b) Liens imposed by law for taxes, assessments or charges of any Governmental Authority for claims not yet due or which are being contested in good faith by appropriate proceedings diligently conducted, and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with Generally Accepted Accounting Principles; (c) statutory or contractual Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and other Liens imposed by law or created in the ordinary course of 126 133 business and in existence less than 90 days from the date of creation thereof for amounts not yet due or which are being contested in good faith by appropriate proceedings diligently conducted, and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with Generally Accepted Accounting Principles; (d) Liens incurred or deposits made (i) in the ordinary course of business (including, without limitation, performance and surety bonds) in connection with workers' compensation, unemployment insurance and other types of social security benefits or (ii) to secure the performance of tenders, bids, leases, contracts (other than for the repayment of Indebtedness), statutory obligations and other similar obligations or arising as a result of progress payments under government contracts; (e) easements (including reciprocal easement agreements and utility agreements), rights-of-way, covenants, consents, reservations, encroachments or title defects, variations and zoning and other restrictions, charges or encumbrances (whether or not recorded) affecting real property, which do not interfere materially with the ordinary conduct of the business of the Company or any Subsidiary and which do not materially detract from the value of the property to which they attach or materially impair the use thereof to the Company or any Subsidiary; (f) purchase money Liens to secure Indebtedness for Money Borrowed incurred to purchase fixed assets, provided such Indebtedness represents not more than 100% of the purchase price of such assets as of the date of purchase thereof and no property other than the assets so purchased secures such Indebtedness; (g) Liens arising in connection with Capital Leases provided that no such Lien shall extend to or cover any property or assets other than assets subject to the Capital Leases and provided further that Liens incurred in reliance on this paragraph (g) or paragraph (h) of this SECTION 10.03 shall not at any time exceed in the aggregate an amount equal to 7.5% of Consolidated Shareholders' Equity determined as of the last day of the fiscal quarter of the Company and its Subsidiaries ended on or immediately preceding the date of computation thereof; (h) other Liens not otherwise permitted by paragraphs (a) through (g) and (i) of this SECTION 10.03 to secure Indebtedness for Money Borrowed in an aggregate principal amount outstanding that does not result in a Default under SECTION 10.01 or 10.02 provided that Liens incurred in reliance on this paragraph (h) or paragraph (g) of this SECTION 10.03 shall not at any time exceed in the aggregate an amount equal to 7.5% of Consolidated Shareholders' Equity determined as of the last day of the fiscal quarter of the Company and its Subsidiaries ended on or immediately preceding the date of computation; and (i) Liens created or incurred in connection with Permitted Asset Securitizations permitted under SECTION 10.13. 10.04 TRANSFER OF ASSETS. Sell, lease, transfer or otherwise dispose of any assets of the Company or any Subsidiary other than: 127 134 (a) dispositions of inventory in the ordinary course of business; (b) dispositions of assets or property that are (i) substantially worn, damaged, obsolete, (ii) in the judgment of the Company, no longer useful in its business or that of any Subsidiary up to an aggregate amount of such dispositions since the Closing Date not to exceed an amount equal to twenty percent (20%) of Consolidated Total Assets determined as of the last day of the fiscal quarter of the Company and its Subsidiaries ended on or immediately preceding the date of computation thereof (such assets to be valued at the lower of book value or fair market value) or (iii) replaced within a reasonable period of time with assets, property of similar or better quality performing similar functions; (c) transfers of assets necessary to give effect to merger or consolidation transactions permitted by SECTION 10.05; and (d) transfers of assets necessary to give effect to Permitted Asset Securitizations permitted under SECTION 10.13. 10.05 MERGER OR CONSOLIDATION. (a) Consolidate with or merge into any other Person; or (b) permit any other Person to merge into it; provided, however, that any Person may merge into the Company or any other Borrower so long as no Default or Event of Default occurs or is created or results from such transaction; and provided further, that any Subsidiary which is not a Borrower may merge with and into any other entity if the survivor is or becomes a Subsidiary of the Company. 10.06 TRANSACTIONS WITH AFFILIATES. Enter into any transaction after the Closing Date, including, without limitation, the purchase, sale, lease or exchange of property, real or personal, or the rendering of any service, with any Affiliate of the Company, except (a) that such Persons may render services to the Company or its Subsidiaries for compensation at the same rates generally paid by Persons engaged in the same or similar businesses for the same or similar services, (b) that the Company or any Subsidiary may render services to such Person for compensation at the same rates generally charged by the Company or such Subsidiary, (c) in the case of either (a) or (b), in the ordinary course of business and pursuant to the reasonable requirements of the Company's (or any Subsidiary's) business and consistent with past practice of the Company and its Subsidiaries and upon fair and reasonable terms no less favorable to the Company (or any Subsidiary) than would be obtained in a comparable arm's-length transaction with a Person not an Affiliate, and (d) that the Company or its Subsidiaries may continue those transactions described on SCHEDULE 10.06 attached hereto. 10.07 ERISA. With respect to any Pension Plan, Employee Benefit Plan or Multiemployer Plan: 128 135 (a) permit the occurrence of any Termination Event which would result in any material liability on the part of the Company, any ERISA Affiliate, or any Subsidiary to the PBGC or any Governmental Authority; or (b) permit the present value of all benefit liabilities under all Employee Benefit Plans to exceed materially the current value of the assets of such Employee Benefit Plans allocable to such benefit liabilities; or (c) permit any material accumulated funding deficiency (as defined in Section 302 of ERISA and Section 412 of the Code) with respect to any Pension Plan, whether or not waived; or (d) fail to make any contribution or payment to any Multiemployer Plan which the Company or any ERISA Affiliate may be required to make under any agreement relating to such Multiemployer Plan, or any law pertaining thereto; or (e) engage, or permit the Company or any ERISA Affiliate to engage, in any prohibited transaction under Section 406 of ERISA or Sections 4975 of the Code for which a material civil penalty pursuant to Section 502(I) of ERISA or a material tax pursuant to Section 4975 of the Code may be imposed; or (f) permit the establishment of any Employee Benefit Plan providing post-retirement welfare benefits or establish or amend any Employee Benefit Plan which establishment or amendment could result in material liability to the Company or any ERISA Affiliate or any Subsidiary or materially increase the obligation of the Company or any ERISA Affiliate or any Subsidiary to a Multiemployer Plan; or (g) fail, or permit the Company or any ERISA Affiliate or any Subsidiary to fail, to establish, maintain and operate each Employee Benefit Plan in compliance with the provisions of ERISA, the Code, all applicable Foreign Benefit Laws and all other applicable laws and the regulations and interpretations thereof except for such failure that could not reasonably be expected to result in a Material Adverse Effect. 10.08 ACQUISITIONS. Enter into any agreement, contract, binding commitment or other arrangement providing for, or otherwise effect, the acquisition of a controlling equity or other ownership interest in, or all or substantially all of the assets of, any Person, or take any action to solicit the tender of securities or proxies in respect thereof in order to effect any such acquisition, other than Permitted Acquisitions. 10.09 NEGATIVE PLEDGE. Enter into or cause, suffer or permit to exist any agreement with any Person other than the Agents and the Lenders pursuant to this Agreement or any other Loan Documents which prohibits or limits the ability of the Company or any Subsidiary to create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired. 129 136 10.10 DISSOLUTION, ETC. Wind up, liquidate or dissolve (voluntarily or involuntarily) or commence or suffer any proceedings seeking any such winding up, liquidation or dissolution, except in connection with a merger or consolidation permitted pursuant to SECTION 10.05 hereof. 10.11 RESTRICTIVE AGREEMENTS. Enter into or cause, suffer or permit to exist any agreement with any other Person which prohibits, limits or restricts the ability of any Subsidiary to make any payments, directly or indirectly, to the Borrowers by way of dividends, advances, repayments of loans or advances, or other returns on investments, or any other agreement or arrangement which restricts the ability of any such Subsidiary to make any payment, directly or indirectly, to the Borrowers. 10.12 SUBSIDIARY INDEBTEDNESS. Incur, create, assume or permit to exist any Indebtedness of any Subsidiary of the Borrower, howsoever evidenced, except: (a) Indebtedness owing to any Agent or any Lender in connection with this Agreement, any Note or other Loan Document; and (b) other Indebtedness up to an aggregate amount at any time outstanding not to exceed an amount equal to five percent (5%) of Consolidated Total Assets determined as of the last day of the fiscal quarter of the Company and its Subsidiaries ended on or immediately preceding the date of computation. 10.13 PERMITTED ASSET SECURITIZATIONS. Enter into or cause, suffer or permit to exist at any time any Permitted Asset Securitizations which provides for or results in the transfer, sale or other disposition of assets, or the attachment of Liens on assets, in an aggregate amount (determined at the book value of such assets) greater than $250,000,000. 130 137 ARTICLE XI Events of Default and Acceleration 11.01 EVENTS OF DEFAULT. If any one or more of the following events (herein called "Events of Default") shall occur for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any Governmental Authority), that is to say: (a) if default shall be made in the due and punctual payment of the principal of any Loan or Reimbursement Obligation, when and as the same shall be due and payable whether pursuant to any provision of ARTICLE II, ARTICLE IIA, ARTICLE III, ARTICLE IIIA, ARTICLE IV or ARTICLE V hereof, at maturity, by acceleration or otherwise; or (b) if default shall be made in the due and punctual payment of any amount of interest on any Loan or Reimbursement Obligation or in the due and punctual payment of any other obligation or of any fees or other amounts payable to any of the Lenders or the Agents on the date on which the same shall be due and payable and such default shall continue for five (5) days following the date such payment is due; or (c) if default shall be made in the performance or observance of any covenant set forth in SECTIONS 9.08, 9.11, 9.12, 9.15, 9.16, 9.17 , 9.18 or ARTICLE X hereof; or (d) (i) if a default shall be made in the performance or observance of, or shall occur under, any covenant, agreement or provision contained in this Agreement (other than as described in clause (a), (b) or (c) above) and such default shall continue for thirty (30) or more days after the earlier of receipt of notice of such default by the Authorized Representative from any Agent or any Borrower becomes aware of such default, or (ii) if a default shall be made in the performance or observance of, or shall occur under, any covenant, agreement or provision contained in any of the other Loan Documents (including without limitation failure of the Guarantor to pay to the Lenders all of the Guarantors' Obligations in accordance with and as defined in, the Guaranty on the Business Day on which such payment has been demanded in accordance with the terms of the Guaranty) or in any instrument or document evidencing or creating any obligation, guaranty, Lien or security interest in favor of any Agent or any Lender or delivered to any of the Lenders in connection with or pursuant to this Agreement or any of the Obligations (beyond any applicable grace period contained therein), or (iii) if any Loan Document ceases to be in full force and effect (other than by reason of any action by any Agent or any Lender), or (iv) if without the written consent of all the Lenders, this Agreement or any other Loan Document shall be disaffirmed or shall terminate, be terminable or be terminated or become void or unenforceable for any reason whatsoever (other than in accordance with its terms in the absence of default or by reason of any action by the Agents or any Lender); or (e) if there shall occur (i) a default, which is not waived, in the payment of any principal, interest, premium or other amount with respect to any Indebtedness (other than the 131 138 Loans and other Obligations) of the Company or any Subsidiary and the amount of such Indebtedness is not less than the US Dollar Equivalent Amount of US $20,000,000 in the aggregate outstanding, or (ii) any other event of default as specified in any agreement or instrument under or pursuant to which any such Indebtedness may have been issued, created, assumed, guaranteed or secured by the Borrower or any Subsidiary, and in any such case set forth in clause (i) or (ii) above, such default or event of default shall continue for more than the period of grace, if any, therein specified, or such default or event of default shall permit (or, with the giving of notice or lapse of time or both, would permit) the holder of any such Indebtedness (or any agent or trustee acting on behalf of one or more holders) to accelerate the maturity thereof; or (f) if any representation, warranty or other statement of fact contained herein or in any other Loan Document shall be false or misleading in any material respect when given; or (g) if the Company or any Subsidiary shall be unable to pay its debts generally as they become due; file a petition to take advantage of any insolvency statute; make an assignment for the benefit of its creditors; commence a proceeding for the appointment of a custodian, receiver, trustee, liquidator or conservator of itself or of the whole or any substantial part of its property; file a petition or answer seeking receivership, liquidation, reorganization or arrangement or similar relief under the federal bankruptcy laws or any other applicable law or statute; or (h) if a court of competent jurisdiction shall enter an order, judgment or decree appointing a custodian, receiver, trustee, liquidator or conservator of the Company or any Subsidiary or of the whole or any substantial part of its properties and such order, judgment or decree continues unstayed and in effect for a period of sixty (60) days, or approve a petition filed against the Company or any Subsidiary seeking receivership, liquidation, reorganization or arrangement or similar relief under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state or similar law of any other country or province thereof, which petition is not dismissed within sixty (60) days; or if, under the provisions of any other law for the relief or aid of debtors, a court of competent jurisdiction shall assume custody or control of the Company or any Subsidiary or of the whole or any substantial part of its properties, which control is not relinquished within sixty (60) days; or if there is commenced against the Company or any Subsidiary any proceeding or petition seeking receivership, liquidation, reorganization, arrangement or similar relief under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state or similar law of any other country or province thereof, which proceeding or petition remains undismissed for a period of sixty (60) days; or if the Company or any Subsidiary takes any action to indicate its consent to or approval of any such proceeding or petition; or (i) if (i) one or more judgments or orders for the payment of money where the amount not covered by insurance (or the amount as to which the insurer denies liability) is in an aggregate amount in excess of the US Dollar Equivalent Amount of US $20,000,000 is rendered against the Company or any Subsidiary, or (ii) there is any attachment, injunction or execution against any of the Company's or any Subsidiary's properties for any amount in excess of the US Dollar Equivalent Amount of US $20,000,000 in the aggregate; and such judgment, attachment, 132 139 injunction or execution remains unpaid, unstayed, undischarged, unbonded or undismissed for a period of thirty (30) days; or (j) if there shall occur any Change of Control; then, and in any such event and at any time thereafter, if such Event of Default or any other Event of Default shall then be continuing, (A) either or both of the following actions may be taken: (i) the Global Agent, with the consent of the Required Lenders with respect to the Total Facilities, may, and at the direction of the Required Lenders with respect to the Total Facilities, shall, declare any obligation of the Lenders to make further Loans, any obligation of the Issuing Bank to issue or renew Letters of Credit and any obligation of the Bank Guarantee Issuers to issue or renew Bank Guarantees, terminated, whereupon the obligation of each Lender to make further Loans, the obligation of the Issuing Bank to issue or renew Letters of Credit and the obligation of the Bank Guarantee Issuers to issue or renew Bank Guarantees, hereunder shall terminate immediately, and (ii) the Global Agent shall at the direction of the Required Lenders with respect to the Total Facilities, at their option, declare by notice to the Borrowers any or all of the Obligations to be immediately due and payable, and the same, including all interest accrued thereon and all other obligations of the Borrowers to the Agents and the Lenders, shall forthwith become immediately due and payable without presentment, demand, protest, notice or other formality of any kind, all of which are hereby expressly waived, anything contained herein or in any instrument evidencing the Obligations to the contrary notwithstanding; provided, however, that notwithstanding the above, if there shall occur an Event of Default under clause (g) or (h) above, then the obligations of the Lenders to make Loans hereunder, the obligation of the Issuing Bank to issue or renew Letters of Credit and the obligation of the Bank Guarantee Issuers to issue or renew Bank Guarantees shall automatically terminate and any and all of the Obligations shall be immediately due and payable without the necessity of any action by the Global Agent or the Required Lenders with respect to the Total Facilities or notice by the Global Agent or the Required Lenders with respect to the Total Facilities; provided further, however, that neither the Required Lenders with respect to a specific Facility nor the Applicable Facility Agent shall have any power or authority under this SECTION 11.01 separate or apart from that of the Required Lenders of the Total Facilities; and (B) The Agents and each of the Lenders shall have all of the rights and remedies available under the Loan Documents or under any applicable law; (C) The US Facility Borrower shall, upon demand of the US Facility Agent or the Required Lenders, deposit cash (in US Dollars) with the US Facility Agent in an amount equal to the amount of any Letter of Credit Outstandings, as collateral security for the repayment of any future drawings or payments under such Letters of Credit, and such amounts shall be held by the US Facility Agent pursuant to the terms of the LC Account Agreement; and 133 140 (D) The UK Facility Borrowers shall, upon demand of the UK Facility Agent or the Required Lenders, deposit cash (in British Pounds Sterling) with the UK Facility Agent in an amount equal to the amount of any Bank Guarantee Outstandings, as collateral security for the repayment of any future demands or payments under such Bank Guarantees, and such amounts shall be held by the UK Facility Agent pursuant to the terms of the Bank Guarantee Cash Account Agreement. 11.02 GLOBAL AGENT TO ACT. In case any one or more Events of Default shall occur and be continuing, the Global Agent may, and at the direction of the Required Lenders with respect to the Total Facilities shall, proceed to protect and enforce their rights or remedies either by suit in equity or by action at law, or both, whether for the specific performance of any covenant, agreement or other provision contained herein or in any other Loan Document, or to enforce the payment of the Obligations or any other legal or equitable right or remedy. 11.03 CUMULATIVE RIGHTS. No right or remedy herein conferred upon the Lenders or the Agents is intended to be exclusive of any other rights or remedies contained herein or in any other Loan Document, and every such right or remedy shall be cumulative and shall be in addition to every other such right or remedy contained herein and therein or now or hereafter existing at law or in equity or by statute, or otherwise. 11.04 NO WAIVER. No course of dealing between the Borrowers and any Lender or any Agent or any failure or delay on the part of any Lender or any Agent in exercising any rights or remedies under any Loan Document or otherwise available to it shall operate as a waiver of any rights or remedies and no single or partial exercise of any rights or remedies shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or of the same right or remedy on a future occasion. 11.05 ALLOCATION OF PROCEEDS. If an Event of Default has occurred and not been waived, and the maturity of the Obligations has been accelerated pursuant to ARTICLE XI hereof, all payments received by the Agents hereunder in respect of any principal of or interest on the Obligations or any other amounts payable by the Borrowers hereunder shall be applied by the Agents in the following order: (a) amounts due to the Lenders pursuant to SECTIONS 2.09, 3.09, 4.09, 5.09 and 13.05 hereof, to be applied for the ratable benefit of the Lenders without distinction or preference as among Facilities; (b) amounts due to the Issuing Bank pursuant to SECTION 2A.05 and amounts due to the Applicable Bank Guarantee Issuer pursuant to SECTION 3A.05; (c) amounts due to the Agents pursuant to SECTION 12.08 hereof, to be applied for the ratable benefit of the Agents; (d) amounts due to the US Facility Lenders and the Issuing Bank pursuant to SECTION 2A.04, amounts due to the UK Facility Lenders and the Applicable Bank Guarantee Issuer pursuant to SECTION 3A.04 and payments of interest on Loans and Reimbursement Obligations, to 134 141 be applied for the ratable benefit of the Lenders, without distinction or preference as among Australian Facility Loans, Canadian Facility Loans, UK Facility Loans and US Facility Loans(with amounts payable in respect of Australian Facility Swing Line Outstandings being included in such calculation and paid to the Australian Facility Swing Line Lender); (e) payments of principal on Loans and Reimbursement Obligations, to be applied for the ratable benefit of the Lenders, without distinction or preference as among Australian Facility Loans, Canadian Facility Loans, UK Facility Loans and US Facility Loans (with amounts payable in respect of Australian Facility Swing Line Outstandings being included in such calculation and paid to the Australian Facility Swing Line Lender); (f) amounts due to the Issuing Bank, Applicable Bank Guarantee Issuer, Agents or the Lenders pursuant to SECTIONS 2A.02(h), 3A.02(h) and 13.10, to be applied for the ratable benefit of the Agents and the Lenders; (g) payments of all other Obligations due under any of the Loan Documents, if any, to be applied for the ratable benefit of the Lenders and the Agents; and (h) any surplus remaining after application as provided for herein, to the Borrowers or as otherwise may be required by applicable law. 11.06 JUDGMENT CURRENCY. The Borrowers, the Agents and each Lender hereby agree that if, in the event that a judgment is given in relation to any sum due to any Agent or any Lender hereunder, such judgment is given in a currency (the "Judgment Currency") other than that in which such sum was originally denominated (the "Original Currency"), the Borrowers agree to indemnify such Agent or Lender, as the case may be, to the extent that the amount of the Original Currency which could have been purchased thereby in accordance with normal banking procedures on the Business Day following receipt of such sum is less than the sum which could have been so purchased thereby had such purchase been made on the day on which such judgment was given or, if such day is not a Business Day, on the Business Day immediately preceding the giving of such judgment, and if the amount so purchased exceeds the amount which could have been so purchased thereby had such purchase been made on the day on which such judgment was given or, if such day is not a Business Day, on the Business Day immediately preceding such judgment, such Agent or Lender agrees to remit such excess to the Borrowers. The agreements in this SECTION 11.06 shall survive payment of any such judgment. 11.07 FUNDING AND PAYMENT OF PARTICIPATIONS; CONVERSION TO US DOLLARS. (a) At any time after the occurrence and during the continuance of an Event of Default, the Applicable Lenders having Applicable Fronting Commitments aggregating more than 50% of the Applicable Total Facility Commitment with respect to any specific Facility (the "Required Fronting Lenders") may, by written notice to the Applicable Facility Agent (with a copy to the Company and the Global Agent) not later than 11:00 A.M. (local time of the Principal Office of the Applicable Facility Agent) on the second Business Day preceding the proposed date of funding and payment by each Lender of all Participations purchased in such Facility as provided in ARTICLE II, ARTICLE IIA, ARTICLE III, ARTICLE IIIA, ARTICLE IV, or ARTICLE V 135 142 hereof (the "Facility Participation Payment Date"), request each Lender to fund and pay for its Participation in such Facility and deliver to the Applicable Facility Agent on the Facility Participation Payment Date an aggregate amount of the Applicable Currency equal to such Participation (or the British Pounds Sterling Equivalent Amount or Australian Dollar Equivalent Amount of such Participation, as applicable). At the option of such Required Fronting Lenders, and as set forth in such notice, (i) all outstanding Loans under such Facility immediately shall be converted into Loans denominated in US Dollars in an aggregate principal amount equal to the US Dollar Equivalent Amount of the aggregate principal amount of such Loans based on the Spot Rate of Exchange on such Facility Participation Payment Date, and (ii) each such Participation shall be funded in an aggregate amount of US Dollars equal to the US Dollar Equivalent Amount of such Participation. The Applicable Facility Agent will promptly provide written notice of any such request to the other Facility Agents, who shall promptly provide notice thereof to the Lenders in their respective Facilities. (b) On the applicable Facility Participation Payment Date, each Participant in the specific Facility shall deliver the amount of such Participant's Facility Participation Amount with respect to such Facility in the Applicable Currency and in Same Day Funds to the Applicable Facility Agent; provided, however, that no Participant shall be responsible for any default by any other Participant in such other Participant's obligation to pay such amount. Upon receipt of any such amounts from the Participants, the Applicable Facility Agent shall distribute such amounts in Same Day Funds to the Applicable Lenders in such amounts such that, after such distribution, each Applicable Lender and each Participant in such Facility has a Facility Credit Exposure under such Facility, expressed as a percentage of the Aggregate Facility Credit Exposure under such Facility, equal to its Applicable Commitment Percentage. In order to evidence further such Participation (and without prejudice to the effectiveness of the Participation provisions set forth above), each Participant agrees to enter into a separate participation agreement at the request of any Applicable Lender in such Facility in form and substance reasonably satisfactory to such Lender. (c) In the event that any Participant fails to make available to the Applicable Facility Agent the amount of its Participation as provided herein, the Applicable Facility Agent shall be entitled to recover such amount on behalf of the Applicable Lenders on demand from such Participant together with interest at the customary rate set by such Applicable Facility Agent for the correction of errors among banks for three (3) Business Days and thereafter at a rate per annum equal to the Applicable Base Rate with respect to such Facility (or, with respect to the UK Facility, the Default Rate). A certificate of the Applicable Facility Agent submitted to any Lender with respect to amounts owing hereunder shall be conclusive in the absence of manifest error. (d) In the event that any Applicable Lender in a specific Facility receives a payment in respect of any Loan made under such Facility, whether directly from the Applicable Borrower or Borrowers or otherwise, in which Participants have purchased Participations, such Applicable Lender shall promptly distribute to the Applicable Facility Agent, for distribution to each such Participant that has paid all such amounts payable by it hereunder with respect to any Loan made under such Facility by such Applicable Lender, such Participant's Applicable Commitment Percentage of such payment. Any payment to any Participant pursuant to the preceding sentence 136 143 shall be made in US Dollars or Applicable Currency (whichever currency was delivered for payment of such Participation) in Same Day Funds by such Applicable Facility Agent. If any payment received by any Applicable Lender in a specific Facility pursuant to the immediately preceding sentence with respect to any Loan made under such Facility by it shall be required to be returned by such Applicable Lender after such time as such Applicable Lender has distributed such payment to the Applicable Facility Agent, each Participant that has received a portion of such payment shall pay to such Applicable Lender an amount equal to its Applicable Commitment Percentage of such amount to be returned; provided, however, that no Participant shall be responsible for any default by any other Participant in that other Participant's obligation to pay such amount. (e) Anything contained herein to the contrary notwithstanding, each Participant's obligation to pay for its purchase of Participations pursuant to subsection (a) shall be absolute, irrevocable and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which such Lender or Participant may have against any Applicable Lender, the Applicable Facility Agent, any Borrower or any other Person for any reason whatsoever; (ii) the occurrence or continuance of an Event of Default or a Default; (iii) any adverse change in the condition (financial or otherwise) of any Borrower; (iv) any breach of this Agreement or any other Loan Document by any Borrower, the Guarantor or any other Lender; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. (f) Anything contained in this Agreement to the contrary notwithstanding, no amendment, modification, termination or waiver of any provision of this Agreement or of the other Loan Documents, and no consent to any departure by any Borrower therefrom, shall (i) modify, terminate or waive any provision of this SECTION 11.07 in any manner adverse to any Lender without the written concurrence of such Lender, or (ii) modify, terminate or waive any provision of this SECTION 11.07 in any manner adverse to any Participant without the written concurrence of such Participant. (g) In no event shall (i) the Participation of any Participant in any Loans or Reimbursement Obligations pursuant to this SECTION 11.07 be construed as a loan or other extension of credit by such Participant to any Borrower, any Lender or any Facility Agent, (ii) this Agreement be construed to require any Participant to make any Loans, issue Letters of Credit, issue Bank Guarantees or to otherwise extend any credit to any Borrower, any Lender or any Agent under this Agreement or under the other Loan Documents, or (iii) this Agreement be construed to require any Participant to fund or pay any amount in respect of its Participation in any Loan or Reimbursement Obligation except as set forth herein. 137 144 ARTICLE XII The Agents 12.01 APPOINTMENT, POWERS, AND IMMUNITIES. Each Lender hereby irrevocably appoints and authorizes Bank of America to act as the Global Agent, National City Bank to act as the US Facility Agent, Banc of America Securities Limited to act as the UK Facility Agent, Bank One Canada to act as the Canadian Facility Agent, and Bank One, NA, Australia Branch to act as the Australian Facility Agent under this Agreement and the other Loan Documents with such powers and discretion as are specifically delegated to the Global Agent and the Applicable Facility Agents by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. Each Agent (which term as used in this Article hereof shall include its affiliates and its own and its affiliates' officers, directors, employees, and agents): (a) shall not have any duties or responsibilities except those expressly set forth in this Agreement and shall not be a trustee or fiduciary for any Lender; (b) shall not be responsible to the Lenders for any recital, statement, representation, or warranty (whether written or oral) made in or in connection with any Loan Document or any certificate or other document referred to or provided for in, or received by any of them under, any Loan Document, or for the value, validity, effectiveness, genuineness, enforceability, or sufficiency of any Loan Document, or any other document referred to or provided for therein or for any failure by any Borrower or any other Person to perform any of its obligations thereunder; (c) shall not be responsible for or have any duty to ascertain, inquire into, or verify the performance or observance of any covenants or agreements by any Borrower or the satisfaction of any condition (except in the Global Agent's case, receipt of items required by SECTION 7.01 to be delivered to it) or to inspect the property (including the books and records) of any Borrower or any of its Subsidiaries or affiliates; (d) shall not be required to initiate or conduct any litigation or collection proceedings under any Loan Document; and (e) shall not be responsible for any action taken or omitted to be taken by it under or in connection with any Loan Document, except for its own gross negligence or willful misconduct. Each Agent may employ agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. Each of the Global Co-Syndication Agents, in and only in its capacity as a Global Co-Syndication Agent, shall have no duties under this ARTICLE XII. 138 145 The Issuing Bank shall act on behalf of the Lenders with respect to any Letter of Credit issued by it and the documents associated therewith until such time (and except for so long) as the US Facility Agent may agree at the request of the Required Lenders to act for the Issuing Bank with respect thereto; provided, however, that the Issuing Bank shall have all of the benefits and immunities (i) provided to the US Facility Agent in this ARTICLE XII with respect to any acts taken or omissions suffered by the Issuing Bank in connection with Letters of Credit issued by it or proposed to be issued by it and the Applications and Agreements for Letters of Credit pertaining to the Letters of Credit as fully as if the term "US Facility Agent" as used in this ARTICLE XII included the Issuing Bank with respect to such acts or omissions, and (ii) as additionally provided herein with respect to the Issuing Bank. The Applicable Bank Guarantee Issuer shall act on behalf of the Lenders with respect to any Bank Guarantee issued by it and the documents associated therewith until such time (and except for so long) as the UK Facility Agent may agree at the request of the Required Lenders to act for the Applicable Bank Guarantee Issuer with respect thereto; provided, however, that the Applicable Bank Guarantee Issuer shall have all of the benefits and immunities (i) provided to the UK Facility Agent in this ARTICLE XII with respect to any acts taken or omissions suffered by the Applicable Bank Guarantee Issuer in connection with Bank Guarantees issued by it or proposed to be issued by it and the Bank Guarantee Issuance Agreements pertaining to the Bank Guarantee as fully as if the term "UK Facility Agent" as used in this ARTICLE XII included the Applicable Bank Guarantee Issuer with respect to such acts or omissions, and (ii) as additionally provided herein with respect to the Applicable Bank Guarantee Issuer. 12.02 RELIANCE BY AGENTS. Each Agent shall be entitled to rely upon any certification, notice, instrument, writing, or other communication (including, without limitation, any thereof by telephone or telefacsimile) believed by it to be genuine and correct and to have been signed, sent or made by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel (including counsel for any Borrower), independent accountants, and other experts selected by such Agent. As to any matters not expressly provided for by this Agreement, none of the Agents shall be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders with respect to the Total Facilities, in the case of the Global Agent, or the Required Lenders with respect to a specific Facility or with respect to the Total Facilities, as the context may require, in the case of any Agent, and such instructions shall be binding on all of the Applicable Lenders; provided, however, no Agent shall be required to take any action that exposes it to personal liability or that is contrary to any Loan Document or applicable law or unless it shall first be indemnified to its satisfaction by the Applicable Lenders against any and all liability and expense which may be incurred by it by reason of taking any such action. 12.03 DEFAULTS. No Agent shall be deemed to have knowledge or notice of the occurrence of a Default or Event of Default unless it has received written notice from another Agent or a Lender or a Borrower specifying such Default or Event of Default and stating that such notice is a "Notice of Default"; provided, that each Lender shall use its best reasonable efforts to deliver such notice to its Applicable Facility Agent upon its knowledge of any Default or Event of Default; provided further, that the failure to deliver such notice shall not result in any 139 146 liability to any other Lender or Agent. In the event that any Facility Agent receives such a notice of the occurrence of a Default or Event of Default, such Facility Agent shall give prompt notice thereof to the Applicable Lenders in its specific Facility and the other Agents, including the Global Agent. In the event that the Global Agent receives such a notice of the occurrence of a Default or Event of Default, the Global Agent shall give prompt notice thereof to all Facility Agents. The Global Agent shall (subject to SECTION 12.02 hereof) take such action with respect to such Default or Event of Default as shall reasonably be directed by the Required Lenders with respect to the Total Facilities, provided that, unless and until the Global Agent shall have received such directions, the Global Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interest of the Lenders. 12.04 RIGHTS AS LENDER. With respect to its Applicable Facility Commitments and the Loans made by it, each of Bank of America (and any successor acting as Global Agent or Issuing Bank), National City Bank (and any successor acting as US Facility Agent), BASL (and any successor acting as UK Facility Agent), Bank One Canada (and any successor acting as Canadian Facility Agent), Bank One, NA, Australia Branch (or any successor acting as Australian Facility Agent or Australian Facility Swing Line Lender) and Bank One, NA, London Branch and Barclays Bank Plc (or any successor acting as a Bank Guarantee Issuer) in its capacity as a Lender hereunder, if such Agent is a Lender hereunder, shall have the same rights and powers as a Lender hereunder as any other Lender and may exercise the same as though it were not acting as the Global Agent, Issuing Bank, a Bank Guarantee Issuer, Australian Facility Swing Line Lender, US Facility Agent, UK Facility Agent, Canadian Facility Agent or Australian Facility Agent, as applicable, and the term "Lender" or "Lenders" shall, unless the context otherwise indicates, include each of the Agents in its individual capacity, if such Agent is a Lender hereunder. Each of Bank of America (and any successor acting as Global Agent or Issuing Bank), National City Bank (and any successor acting as US Facility Agent), BASL (and any successor acting as UK Facility Agent), Bank One Canada (and any successor acting as Canadian Facility Agent), Bank One, NA, Australia Branch (or any successor acting as Australian Facility Agent or Australian Facility Swing Line Lender) and Bank One, NA, London Branch and Barclays Bank Plc (or any successor acting as a Bank Guarantee Issuer) and their respective affiliates may (without having to account therefor to any Lender) accept deposits from, lend money to, make investments in, provide services to, and generally engage in any kind of lending, trust, or other business with any Borrower or any of its Subsidiaries or affiliates as if it were not acting as Global Agent, Issuing Bank, a Bank Guarantee Issuer, Australian Facility Swing Line Lender, US Facility Agent, UK Facility Agent, Canadian Facility Agent or Australian Facility Agent, as applicable, and each of Bank of America (and any successor acting as Global Agent or Issuing Bank), National City Bank (and any successor acting as US Facility Agent), BASL (and any successor acting as UK Facility Agent), Bank One Canada (and any successor acting as Canadian Facility Agent), Bank One, NA, Australia Branch (and any successor acting as Australian Facility Agent or Australian Facility Swing Line Lender) and Bank One, NA, London Branch and Barclays Bank Plc (and any successor acting as a Bank Guarantee Issuer) and their respective affiliates may accept fees and other consideration from any Borrower or any of its Subsidiaries or affiliates for services in connection with this Agreement or otherwise without having to account for the same to the Lenders. 140 147 12.05 INDEMNIFICATION. The Lenders agree to indemnify the Agents (to the extent not reimbursed under SECTION 13.10 hereof, but without limiting the obligations of the Borrowers under such Section), for its or their ratable share (based on their Applicable Commitment Percentages) of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including attorneys' fees), or disbursements of any kind and nature whatsoever that may be imposed on, incurred by or asserted against any of the Agents (including by any Lender) in any way relating to or arising out of any Loan Document or the transactions contemplated thereby or any action taken or omitted by any of the Agents under any Loan Document; provided that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the Person to be indemnified. Without limitation of the foregoing, each Lender agrees to reimburse the Agents promptly upon demand for its or their ratable share (based on their Applicable Commitment Percentages) of any costs or expenses payable by the Borrowers under SECTION 13.06, to the extent that the Agents are not promptly reimbursed for such costs and expenses by the Borrowers. The agreements contained in this Section shall survive payment in full of the Obligations, termination of each Commitment and the occurrence of the Total Facility Repayment Date. 12.06 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender agrees that it has, independently and without reliance on any of the Agents or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Borrowers and their Subsidiaries and decision to enter into this Agreement and that it will, independently and without reliance upon any of the Agents or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under the Loan Documents. Except for notices, reports, and other documents and information expressly required to be furnished to the Lenders by the Agents hereunder, the Agents shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition, or business of any Borrower or any of its Subsidiaries or affiliates that may come into the possession of any of the Agents or any of its affiliates. 12.07 RESIGNATION OF AN AGENT. Any of the Agents may resign at any time by giving notice thereof (a) with respect to the resignation of the Global Agent, to the Lenders, the Borrowers and the Facility Agents, and (b) with respect to the resignation of any Applicable Facility Agent, to the Applicable Lenders, the Applicable Borrowers, the Company and the Global Agent. Upon any such resignation of the Global Agent, the Required Lenders with respect to the Total Facilities shall have the right to appoint a successor Global Agent, which shall be a Lender under or a Lender Affiliate with respect to the Total Facilities at such time and which, so long as no Default or Event of Default exists, shall be acceptable to the Company, which acceptance shall not be unreasonably withheld or delayed. Upon any such resignation of an Applicable Facility Agent, the Required Lenders with respect to the specific Facility shall have the right to appoint a successor Facility Agent for such Facility, which shall be a Lender under or a Lender Affiliate with respect to such Facility at such time and which, so long as no Default or Event of Default exists, shall be acceptable to the Company, which acceptance shall not be unreasonably withheld or delayed. If no successor Global Agent or Applicable Facility Agent shall have been so appointed and shall have accepted such appointment within thirty (30) days after the retiring Global Agent or Applicable Facility Agent's giving of notice of 141 148 resignation, then the resignation of the retiring Global Agent or Applicable Facility Agent as the case may be, shall nonetheless thereupon be effective and the Facility Agents, in the case of the Global Agent's resignation, or the Applicable Facility Lenders, in the case of an Applicable Facility Agent's resignation, shall perform all the obligations of the retiring Agent hereunder until such time, if any, as the Required Lenders shall appoint a successor Agent as provided for above. Upon the acceptance of any appointment as Global Agent or Applicable Facility Agent hereunder by a successor, such successor shall thereupon succeed to and become vested with all the rights, powers, discretion, privileges, and duties of the retiring Global Agent or Applicable Facility Agent, and the retiring Global Agent or Applicable Facility Agent shall be discharged from its duties and obligations hereunder. After any retiring Global Agent or Applicable Facility Agent's resignation hereunder as Global Agent or Applicable Facility Agent, the provisions of this ARTICLE XII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Global Agent or Applicable Facility Agent. Notwithstanding the foregoing, and providing the Canadian Facility Agent is a Schedule II Bank, the Canadian Facility Agent may, at any time, resign as Canadian Facility Agent and appoint as successor Canadian Facility Agent a Schedule III Bank that is an affiliate of the Canadian Facility Agent. Such resignation and appointment shall be effective upon notice to the Global Agent, the Lenders, the Borrowers and the Facility Agents. 12.08 FEES. The Borrowers agree to pay to each of the Agents, for its individual account, an annual fee as from time to time agreed to by the Borrowers and the Global Agent or Applicable Facility Agent, as applicable, in writing. 142 149 ARTICLE XIII Miscellaneous 13.01 ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Loans, its Notes, its Applicable Facility Commitments, its Applicable Fronting Commitments and its Participations); provided, however, that (i) each such assignment shall be to an Eligible Assignee; (ii) except in the case of an assignment to another Lender or an assignment of all of a Lender's rights and obligations in the US Facility, UK Facility, Canadian Facility or Australian Facility, respectively, under this Agreement, any such partial assignment shall be in an amount at least equal to US $5,000,000 of such Lender's US Facility Commitment, (pound sterling)3,000,000 of such Lender's UK Facility Commitment (if any), CAN $7,000,000 of such Lender's Canadian Facility Commitment (if any) and AUS $5,000,000 of such Lender's Australian Facility Commitment (if any); (iii) each such assignment by a Lender shall be of a constant, and not varying, percentage of all of its rights and obligations (including Loans, Applicable Facility Commitments, Applicable Fronting Commitments and Participations and Outstandings owing thereto) under this Agreement with respect to each Facility; (iv) the parties to such assignment shall execute and deliver to each Applicable Facility Agent and the Global Agent (and with respect to the US Facility, the Issuing Bank, with respect to the UK Facility, the Bank Guarantee Issuers and with respect to the Australian Facility, the Australian Facility Swing Line Lender) for their acceptance an Assignment and Acceptance in the form of EXHIBIT B hereto, together with any Note subject to such assignment and a processing fee of US $5,000 payable pro rata to the Global Agent and each Applicable Facility Agent; (v) each assignee must be a US Facility Lender and a Lender under at least one (1) additional Facility after giving effect to any assignment hereunder; and (vi) such assignee shall have an office located in the United States. Notwithstanding the foregoing, the following requirements shall not apply in respect of a Schedule II to Schedule III Assignment: (1) the processing fee referred to in SECTION 13.01(a)(iv) and (2) provided that an affiliate of the assignee is a US Facility Lender, the requirement in SECTION 13.01(a)(v) that the assignee be a US Facility Lender and that the assignee also be a Lender under at least one additional Facility. Upon execution, delivery, and acceptance of such 143 150 Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of such assignment, have the obligations, rights, and benefits of a Lender hereunder and the assigning Lender shall, to the extent of such assignment, relinquish its rights and be released from its obligations under this Agreement. Upon the consummation of any assignment pursuant to this Section, the assignor, the Applicable Facility Agent and the Applicable Borrowers shall make appropriate arrangements so that, if required, new Notes are issued to the assignor and the assignee. If the assignee is not incorporated under the laws of the appropriate jurisdiction for the Applicable Facilities and the assignment is not a Schedule II to Schedule III Assignment, it shall deliver to the Borrowers and the Applicable Facility Agent certification as to exemption from deduction or withholding of Taxes in accordance with SECTION 6.06. (b) Each Applicable Facility Agent shall maintain at its address referred to in SECTION 13.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Applicable Lenders and each Applicable Facility Commitment of, and principal amount of the Outstandings owing to, each such Applicable Lender from time to time (the "Register"). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Applicable Borrowers, the Global Agent, the Applicable Facility Agent and the Applicable Lender may treat each Person whose name is recorded in the Register as a Lender hereunder under the Applicable Facility for all purposes of this Agreement. The Register shall be available for inspection by any Applicable Borrower or any Applicable Lender at any reasonable time and from time to time upon reasonable prior notice. (c) Upon its receipt of an Assignment and Acceptance executed by the parties thereto, together with any Note subject to such assignment and payment of the processing fee, the Global Agent and the Applicable Facility Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of EXHIBIT B hereto, accept such Assignment and Acceptance and record the information contained therein in the Register, and the Applicable Facility Agent shall thereafter give prompt notice thereof to the parties thereto. (d) Each Lender may sell participations to one or more Persons in all or a portion of its rights and obligations under this Agreement (including all or a portion of its Loans, Applicable Facility Commitments, Applicable Fronting Commitments, Participations and Outstandings owing thereto); provided, however, that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the participant shall be entitled to the benefit of the yield protection provisions contained in ARTICLE VI and the right of set-off contained in SECTION 13.03, (iv) the Applicable Borrowers and Applicable Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement, and (v) such Lender shall retain the sole right to enforce the obligations of the Applicable Borrowers relating to its Loans, its Notes (if any) and its Participations and Outstandings owing thereto, and to approve any amendment, modification, or waiver of any provision of this Agreement (other than amendments, modifications, or waivers decreasing or reducing the amount of principal of or the rate at which interest is payable or the amount of fees payable on such Loans or any Notes or other Outstandings, extending any scheduled principal payment date or date fixed for the payment of interest on such Loans or 144 151 Notes, releasing the Guarantor or any Borrower or providing for any assignment of their Obligations, or extending any Applicable Facility Commitment of such Lender), each of which may, if so agreed in writing, require the prior consent of any such participant in such Lender's Commitments and Participations and Outstandings owing thereto before such Lender approves any such amendment, modification or waiver. (e) Notwithstanding any other provision set forth in this Agreement, any Lender may at any time assign and pledge all or any portion of its Loans, its Notes, its Obligations and its interest under the Loan Documents to any Federal Reserve Bank as collateral security pursuant to Regulation A and any Operating Circular issued by such Federal Reserve Bank. No such assignment shall release the assigning Lender from its obligations hereunder. (f) Any Lender may furnish any information concerning any Borrower or any of its Subsidiaries in the possession of such Lender from time to time to assignees and participants (including prospective assignees and participants) evaluating the assignment or participation and subject to the prior execution by such party of the form of confidentiality agreement required by the Company as of the Closing Date of all Lenders. (g) In the event that any Lender fails to maintain an Investment Grade Rating (a "Non-Rated Lender"), such Lender shall be replaced as soon as practicable by, and assign all its Loans, Applicable Facility Commitments, Applicable Fronting Commitments, Participations and other Obligations owing thereto pursuant to SECTION 13.01 to, a financial institution selected by the Company and willing to become a Lender for all purposes hereunder which is an Eligible Assignee. Such Non-Rated Lender agrees to execute and deliver to the Global Agent and to the Applicable Facility Agent of each Facility in which such Non-Rated Lender has made or was obligated to make Loans an Assignment and Acceptance with such replacement Lender upon payment at par by such replacement lender of all principal, interest, fees and other amounts owing under this Agreement to such Non-Rated Lender. The Non-Rated Lender shall pay to the Applicable Facility Agent the processing fee required by SECTION 13.01(a)(iv) in connection with such assignment. Upon acceptance of the Assignment and Acceptance and satisfaction of all other conditions in SECTION 13.01(a), (b), (c), such replacement lender shall become a Lender hereunder. (h) No Borrower may assign any rights, powers, duties or obligations under this Agreement or the other Loan Documents without the prior written consent of all the Lenders. 13.02 NOTICES. Any notice shall be presumed to have been received by any party hereto and be effective (i) on the day on which delivered (including hand delivery by commercial courier service) to such party (against receipt therefor), (ii) on the date of receipt at such address or telefacsimile number as may from time to time be specified by such party in written notice to the other parties hereto, or (iii) on the fifth Business Day after the date on which mailed, if sent prepaid by certified or registered mail, return receipt requested, in each case delivered, transmitted or mailed, as the case may be, to the address or telefacsimile number, as appropriate, set forth below or such other address or number as such party shall specify by notice thereunder: 145 152 (a) if to any Borrower: c/o American Greetings Corporation One American Road Cleveland, Ohio 44144 Attention: Manager of Treasury Operations Telefacsimile:(216) 252-6791 Telephone: (216) 252-7300 with a copy to: American Greetings Corporation One American Road Cleveland, Ohio 44144 Attention: General Counsel Telefacsimile: (216) 252-6741 Telephone: (216) 252-7300 (b) if to the Authorized Representative: At the address set forth for receipt of notices in the notice of appointment thereof. (c) if to the Global Agent: Bank of America, N.A. 1455 Market Street, 12th Floor San Francisco, California 94103 Attention: Gary Flieger, Agency Services Telefacsimile:(415) 436-3484 Telephone: (415) 436-3425 with a copy to: Bank of America, N.A. 231 South LaSalle Street Chicago, Illinois 60697 Attention: Gretchen Spoo Telefacsimile:(312) 987-0303 Telephone: (312) 828-6654 (d) if to the Agents: At the addresses set forth on the signature pages hereof. (e) if to the Lenders: 146 153 At the addresses set forth on the signature pages hereof and on the signature page of each Assignment and Acceptance. 13.03 RIGHT OF SET-OFF; ADJUSTMENTS. (a) Upon the occurrence and during the continuance of any Event of Default, each Lender, each Bank Guarantee Issuer and the Issuing Bank (and each of its affiliates) is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender (or any of its affiliates) to or for the credit or the account of any Applicable Borrower against any and all of the Obligations of such Borrower now or hereafter existing under this Agreement, any other Loan Document and the Note of such Borrower held by such Lender, irrespective of whether such Lender shall have made any demand under this Agreement, any other Loan Document or such Notes and although such Obligations may be unmatured. Each Lender agrees promptly to notify the Applicable Borrower, the Global Agent and the Applicable Facility Agent after any such set-off and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Lender under this SECTION 13.03(a) are in addition to other rights and remedies (including, without limitation, other rights of set-off) that such Lender may have. (b) Each Lender (including the Australian Facility Swing Line Lender), each Bank Guarantee Issuer and the Issuing Bank agrees that if it shall, through the exercise of a right of banker's lien, set-off, counterclaim or otherwise, obtain payment with respect to its Obligations (other than pursuant to ARTICLE VI) which results in its receiving more than its pro rata share of the aggregate payments with respect to all of the Obligations in a specific Facility, or with respect to all of the Obligations in the Total Facilities, after acceleration thereof pursuant to SECTION 11.01(a) (other than any payment expressly provided hereunder to be distributed on other than a pro rata basis and payments pursuant to ARTICLE VI), then (i) such Lender (including the Australian Facility Swing Line Lender), Bank Guarantee Issuer or Issuing Bank shall be deemed to have simultaneously purchased from the other Applicable Lenders or all Lenders, as the case may be, a share in their Obligations so that the amount of the Obligations held by each of the Applicable Lenders or all Lenders, as the case may be, shall be pro rata and (ii) such other adjustments shall be made from time to time as shall be equitable to ensure that the Lenders share such payments ratably; provided, however, that for purposes of this SECTION 13.03(b) the terms "pro rata" and "ratably" shall be determined with respect to the Applicable Commitment Percentage of each Lender after subtraction of amounts, if any, by which any such Lender has not funded its share of the outstanding Loans. If all or any portion of any such excess payment is thereafter recovered from the Lender which received the same, the purchase provided in this SECTION 13.03 (b) shall be rescinded to the extent of such recovery, without interest. The Borrowers expressly consent to the foregoing arrangements and agree that each Lender so purchasing a portion of the other Lenders' Obligations may exercise all rights of payment (including, without limitation, all rights of set-off, banker's lien or counterclaim) with respect to such portion as fully as if such Lender were the direct holder of such portion. 147 154 13.04 SURVIVAL. All covenants, agreements, representations and warranties made herein shall survive the making by the Lenders of the Loans, the issuance of the Letters of Credit and Bank Guarantees and the execution and delivery to the Lenders of this Agreement and the Notes, if any, and shall continue in full force and effect so long as any Obligations remain outstanding or any Lender, Issuing Bank or Bank Guarantee Issuer has any commitment hereunder or any Borrower has continuing obligations hereunder unless otherwise provided herein. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and permitted assigns of such party and all covenants, provisions and agreements by or on behalf of the Borrowers which are contained in the Loan Documents shall inure to the benefit of the successors and permitted assigns of the Lenders or any of them. 13.05 EXPENSES. Each Borrower jointly and severally agrees to pay on demand all reasonable costs and expenses of the Global Agent, the Canadian Facility Agent, the UK Facility Agent, the Australian Facility Agent, each Bank Guarantee Issuer and the Issuing Bank in connection with the syndication, preparation, due diligence, execution, delivery, administration, modification, and amendment of this Agreement, the other Loan Documents, and the other documents to be delivered hereunder, including, without limitation, the reasonable fees and expenses of counsel (including the allocated cost of internal counsel) for the Global Agent and the allocated cost of internal counsel for the Canadian Facility Agent and the Australian Facility Agent with respect thereto and with respect to advising the Agents as to their rights and responsibilities under the Loan Documents. Each Borrower further agrees jointly and severally to pay on demand all costs and expenses of each Agent and each Lender, if any (including, without limitation, reasonable attorneys' fees and expenses), in connection with the enforcement or preservation of rights under this Agreement (whether through negotiations, legal proceedings, or otherwise), any other Loan Documents and any other documents to be delivered hereunder. The agreements contained in this Section shall survive payment in full of the Obligations, termination of each Commitment and the occurrence of the Total Facility Repayment Date. 13.06 AMENDMENTS AND WAIVERS. Any provision of this Agreement or any other Loan Document may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrowers and the Required Lenders with respect to the Total Facilities, and, if ARTICLE XII or the rights or duties of the Global Agent or any Applicable Facility Agent are affected thereby, by the Global Agent and/or the Applicable Facility Agent, as applicable; provided that no such amendment or waiver shall, unless signed by all the Lenders, (i) increase the US Facility Commitment, UK Facility Commitment, Canadian Facility Commitment or Australian Facility Commitment, or the US Facility Fronting Commitment, UK Facility Fronting Commitment, Canadian Facility Fronting Commitment or Australian Facility Fronting Commitment, as applicable, of any Lender or increase the Total US Facility Commitment, the Total UK Facility Commitment, the Total Canadian Facility Commitment or the Total Australian Facility Commitment; (ii) reduce the principal of or rate of interest on any Loan or Reimbursement Obligation or any fees or other amounts payable hereunder; (iii) postpone any date fixed for the payment of any scheduled installment of principal of or interest on any Loan or Reimbursement Obligation or any fees or other amounts payable hereunder or any mandatory prepayments required by SECTION 9.17 or the Total Facility Termination Date, the US Facility Revolving Credit Termination Date or the Canadian Facility Renewable Tranche Termination Date; (iv) change the percentage of the Applicable Facility Commitment or the Total 148 155 Commitment, as applicable, or of the Aggregate Credit Exposure or the number of Lenders, which shall be required for the Lenders or any of them to take any action under this Section or any other provision of this Agreement; or (v) release or allow an assignment by any Borrower or the Guarantor; provided further, however, that the amendment or waiver of any of the following provisions of a specific Facility need only be signed by the Applicable Borrowers, the Applicable Facility Agent and the Required Lenders with respect to such Facility: (x) delivery of Borrowing Notices with respect to any Advance, Continuation or Conversion under the specific Facility, (y) delivery of notice for any reduction in the Applicable Total Facility Commitment, and (z) minimum or integral amounts of Advances or Loans under the specific Facility; and provided, further, that no such amendment or waiver that affects the rights, privileges or obligations of the Issuing Bank as issuer of Letters of Credit, shall be effective unless signed in writing by the Issuing Bank; and provided, further that no such amendment or waiver that affects the rights, privileges or obligations of the Bank Guarantee Issuers as issuer of Bank Guarantees, shall be effective unless signed in writing by the Bank Guarantee Issuers; and provided, further, that no such amendment or waiver that affects the rights, privileges or obligations of the Australian Facility Swing Line Lender as provider of the Australian Facility Swing Line Loans, shall be effective unless signed in writing by the Australian Facility Swing Line Lender. No notice to or demand on any Borrower in any case shall entitle such Borrower to any other or further notice or demand in similar or other circumstances, except as otherwise expressly provided herein. No delay or omission on any Lender's or any Agent's part in exercising any right, remedy or option shall operate as a waiver of such or any other right, remedy or option or of any Default or Event of Default. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law. 13.07 COUNTERPARTS . This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such fully-executed counterpart. 13.08 TERMINATION. The termination of this Agreement shall not affect any rights of the Borrowers, the Lenders or the Agents or any obligation of any Borrower, the Lenders (including the Australian Facility Swing Line Lender) or any of the Agents or the Issuing Bank or any Bank Guarantee Issuer, arising prior to the effective date of such termination, and the provisions hereof shall continue to be fully operative until all transactions entered into or rights created or obligations incurred prior to such termination have been fully disposed of, concluded or liquidated and the Obligations arising prior to or after such termination have been irrevocably paid in full. The rights granted to the Agents for the benefit of the Lenders hereunder and under the other Loan Documents shall continue in full force and effect, notwithstanding the termination of this Agreement, until termination of each Commitment and all of the Obligations have been paid in full after the termination hereof (other than Obligations in the nature of continuing indemnities or expense reimbursement obligations not yet due and payable, which shall continue) or the Borrowers have furnished the Lenders and the Agents with an indemnification satisfactory to the Agents and each Lender with respect thereto. All representations, warranties, covenants, waivers and agreements contained herein shall survive termination hereof until 149 156 payment in full of the Obligations unless otherwise provided herein. Notwithstanding the foregoing, if after receipt of any payment of all or any part of the Obligations, any Lender (including the Australian Facility Swing Line Lender) or the Issuing Bank or any Bank Guarantee Issuer is for any reason compelled to surrender such payment to any Person because such payment is determined to be void or voidable as a preference, impermissible setoff, a diversion of trust funds or for any other reason, this Agreement (including the provisions pertaining to Participations in Letters of Credit, Bank Guarantees, Reimbursement Obligations, and Australian Facility Swing Line Loans) shall continue in full force and the Borrowers shall be liable to, and shall indemnify and hold the Agents and such Lender (including the Australian Facility Swing Line Lender) or the Issuing Bank or the Applicable Bank Guarantee Issuer harmless for, the amount of such payment surrendered until the Agents and such Lender (including the Australian Facility Swing Line Lender) and the Issuing Bank and the Applicable Bank Guarantee Issuer shall have been finally and irrevocably paid in full. The provisions of the foregoing sentence shall be and remain effective notwithstanding any contrary action which may have been taken by the Lenders or the Issuing Bank or the Applicable Bank Guarantee Issuer in reliance upon such payment, and any such contrary action so taken shall be without prejudice to the Lenders' (including the Australian Facility Swing Line Lender's) and the Issuing Bank's and the Applicable Bank Guarantee Issuer's rights under this Agreement and shall be deemed to have been conditioned upon such payment having become final and irrevocable. 13.09 USURY SAVINGS CLAUSE. Notwithstanding any other provision herein, the aggregate interest rate charged with respect to any of the Obligations, including all charges or fees in connection therewith deemed in the nature of interest under applicable law shall not exceed the Highest Lawful Rate (as such term is defined below). If the rate of interest (determined without regard to the preceding sentence) under this Agreement at any time exceeds the Highest Lawful Rate; the outstanding amount of the Loans made hereunder shall bear interest at the Highest Lawful Rate until the total amount of interest due hereunder equals the amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect. In addition, if when the Loans made hereunder are repaid in full the total interest due hereunder (taking into account the increase provided for above) is less than the total amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect, then to the extent permitted by law, the Applicable Borrowers shall pay to the Applicable Facility Agent an amount equal to the difference between the amount of interest paid and the amount of interest which would have been paid if the Highest Lawful Rate had at all times been in effect. Notwithstanding the foregoing, it is the intention of the Lenders and the Borrowers to confirm strictly to any applicable usury laws. Accordingly, if any Lender contracts for, charges, or received any consideration which constitutes interest in excess of the Highest Lawful Rate, then any such excess shall be cancelled automatically and, if previously paid, shall at such Lender's option be applied to the outstanding amount of the Loans made hereunder or be refunded to the Applicable Borrowers. As used in this paragraph, the term "Highest Lawful Rate" means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted for, charged, or received under the laws applicable to such Lender which are presently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than applicable laws now allow. 150 157 13.10 INDEMNIFICATION; LIMITATION OF LIABILITY. (a) The Company and each Borrower jointly and severally agrees to indemnify absolutely and unconditionally and hold harmless each Agent and each Lender (including the Australian Facility Swing Line Lender), the Issuing Bank, the Bank Guarantee Issuers and each of their affiliates and their respective officers, directors, employees, agents, and advisors (each, an "Indemnified Party") from and against any and all claims, damages, losses, liabilities, costs, and expenses, including, without limitation, all claims, damages, losses, liabilities, costs and expenses described in SECTION 6.09 (the foregoing also to include, without limitation, reasonable attorneys' fees (including the allocated cost of internal counsel), settlement costs and disbursements) ("Indemnified Liabilities") that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation, or proceeding or preparation of defense in connection therewith) the Loan Documents, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Loans, except to the extent such Indemnified Liability is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence or willful misconduct. If and to the extent the foregoing may be unenforceable for any reason, the Company and each Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each Indemnified Liability which is permissible under applicable law. In the case of an investigation, litigation or other proceeding to which the indemnity in this SECTION 13.10 applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Company, any Borrower, its directors, shareholders or creditors or an Indemnified Party or any other Person or any Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated. (b) Without limiting the generality of SECTION 13.10(a) above, the Company and the Borrowers hereby jointly and severally agree to defend, indemnify and hold each Indemnified Party harmless from and against any and all Indemnified Liabilities (including, without limitation, assessment and cleanup costs and reasonable attorneys', consultants' and other experts' fees and disbursements, including those arising by reason of any of the aforesaid or an action against the Company or any Subsidiary under this indemnity) arising directly or indirectly from, out of or by reason of (a) the violation or alleged violation of any Environmental Law by the Company or any Subsidiary or with respect to any property owned, operated or leased by the Company or any Subsidiary or (b) the use, generation, handling, storage, transportation, treatment, emission, release, disclaim or disposal of any Hazardous Material by or in respect of the Company or any Subsidiary or on or with respect to property owned or leased or operated by the Company or any Subsidiary. (c) The Company and each Borrower agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to it, any of its Subsidiaries or Affiliates or any security holders or creditors thereof arising out of, related to or in connection with the transactions contemplated herein, except to the extent that such liability is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence or willful misconduct; provided, however, the Company and each Borrower agrees not to assert any claim against any of the Agents, any Lender, any of 151 158 their affiliates, or any of their respective directors, officers, employees, attorneys, agents, and advisers, on any theory of liability, for special, indirect, consequential, or punitive damages arising out of or otherwise relating to the Loan Documents, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Loans. (d) Without prejudice to the survival of any other agreement of any Borrower hereunder, the agreements and obligations of the Company and each Borrower contained in this SECTION 13.10 shall survive the payment in full of the Obligations, termination of each Commitment and the occurrence of the Total Facility Repayment Date. 13.11 AGREEMENT CONTROLS. In the event that any term of any of the Loan Documents other than this Agreement conflicts with any express term of this Agreement, the terms and provisions of this Agreement shall control to the extent of such conflict. 13.12 SEVERABILITY. If any provision of this Agreement or the other Loan Documents shall be determined to be illegal or invalid as to one or more parties hereto, then such provision shall remain in effect with respect to all parties, if any, as to whom such provision is neither illegal nor invalid, and in any event all other provisions hereof shall remain effective and binding on the parties hereto. 13.13 ENTIRE AGREEMENT. This Agreement, together with the other Loan Documents, constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all previous proposal, negotiations, representations and other communications between or among the parties, both oral and written, with respect thereto. 13.14 GOVERNING LAW; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN THOSE LOAN DOCUMENTS WHICH EXPRESSLY PROVIDE THAT THEY SHALL BE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE. (b) EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH BORROWER EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY, ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH BORROWER HEREBY IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING. 152 159 (c) EACH BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF SUCH BORROWER PROVIDED IN SECTION 13.02, OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK. (d) NOTHING CONTAINED IN SUBSECTION (a) OR (b) HEREOF SHALL PRECLUDE ANY AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE COURTS OF ANY JURISDICTION WHERE ANY BORROWER OR ANY BORROWER'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE UNDER APPLICABLE LAW. (e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH BORROWER, EACH AGENT AND THE LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY IRREVOCABLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING. 13.15 SPECIAL FUNDING OPTION. (a) Notwithstanding anything to the contrary contained herein, any Lender (for the purposes of this SECTION 13.15, a "Granting Lender") may grant to a special purpose funding vehicle (for the purposes of this SECTION 13.15, an "SPC") the option to make, on behalf of such Granting Lender, all or a portion of the Advances and Participations which such Granting Lender is obligated to make (a "Funding Obligation") under the applicable Facility, such option to be exercisable in the sole discretion of the SPC; provided, however, that (i) such Granting Lender's obligations under this Agreement and the Loan Documents shall remain unchanged, including without limitation the indemnification obligations of the Granting Lender pursuant to SECTION 12.05 hereof; 153 160 (ii) such Granting Lender shall remain solely responsible to the other parties hereto for the performance of all Funding Obligations; (iii) the Applicable Borrowers and the Applicable Lenders shall continue to deal solely and directly with such Granting Lender in connection with such Granting Lender's rights and obligations under this Agreement; the Applicable Facility Agent shall continue to deal directly with the Granting Lender as agent for the SPC with respect to distribution of payment of principal, interest and fees, notices of Conversion and Continuation and all other matters; (iv) such Granting Lender shall retain the sole right to enforce the obligations of the Applicable Borrowers relating to its Loans and its Notes and its Participations and to approve any amendment, modification, or waiver of any provision of this Agreement, each of which may, if so agreed in writing between the Granting Lender and the SPC, require the prior consent of any such SPC which has exercised the option to undertake the Funding Obligation in connection with such Granting Lender's Commitments and Participations and Obligations owing thereto before the Granting Lender approves any such amendment, modification or waiver; (v) the granting of such option shall not constitute an assignment to or participation of such SPC of or in the Granting Lender's Commitments and Participations and Obligations owing thereto; (vi) such SPC shall not become a Lender hereunder as a result of the granting of such option; (vii) such SPC shall not become obligated or committed to make Advances as a result of the granting of such option; (viii) if such SPC elects not to exercise such option or otherwise fails to make all or any part of an Advance or Participation, the Granting Lender shall retain its Funding Obligation and be obligated to make the entire Advance or Participation or any portion of such Advance or Participation not made by such SPC; and (b) Advances and Participations made by an SPC hereunder shall be deemed to satisfy the Funding Obligation and utilize the Applicable Facility Commitment and Applicable Fronting Commitment of the Granting Lender as if, and to the same extent, such Advances were made by such Granting Lender. (c) Each party hereto agrees that no SPC shall be liable for any indemnity or payment under this Agreement for which a Granting Lender would otherwise be liable so long as, and to the extent that, the Granting Lender provides such indemnity or makes such payment. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other person in instituting against, such SPC any 154 161 bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of the United States of America or any State thereof. (d) Notwithstanding anything to the contrary contained in this Agreement, an SPC may (i) at any time and without paying any processing fee therefor, assign or participate all or a portion of its interests in any Loans or Participations as they may exist consistent with the terms of this SECTION 13.15 to its Granting Lender or to any financial institutions providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Loans or Participations, and (ii) disclose on a confidential basis any nonpublic information relating to Advances made by such SPC hereunder to any rating agency, commercial paper dealer or provider of any surety or guarantee to such SPC. (e) This SECTION 13.15 may not be amended without the prior written consent of the Granting Lender on behalf of which such SPC has made all or any part of its Advances which remain outstanding at the time of such amendment. [Signature pages follow.] 155 162 IN WITNESS WHEREOF, the parties hereto have caused this instrument to be made, executed and delivered by their duly authorized officers as of the day and year first above written. AMERICAN GREETINGS CORPORATION By: /s/ Dale A. Cable --------------------------------- Name: Dale A. Cable ------------------------------- Title: Vice President - Treasurer ------------------------------ CARLTON CARDS (FRANCE) S.N.C. By: /s/ John S.N. Charlton Name: John S.N. Charlton ------------------------------- Title: Gerant ------------------------------ CARLTON CARDS LIMITED, a UK entity By: /s/ Morry Weiss Name: Morry Weiss ------------------------------- Title: Executive Director ------------------------------ UK GREETINGS LIMITED By: /s/ Mary Ann Corrigan-Davis Name: Mary Ann Corrigan-Davis ------------------------------- Title: Director ------------------------------ UKG SPECIALTY PRODUCTS LIMITED By: /s/ Mary Ann Corrigan-Davis Name: Mary Ann Corrigan-Davis ------------------------------- Title: Director ------------------------------ Signature Page 1 of 23 163 CARLTON CARDS LIMITED, a Canadian Company By: /s/ Phyllis Alden Name: Phyllis Alden ------------------------------- Title: Secretary ------------------------------ JOHN SANDS (AUSTRALIA) LTD. By: /s/ Mary-Ann Corrigan-Davis Name: Mary-Ann Corrigan-Davis ------------------------------- Title: President ------------------------------ JOHN SANDS (N.Z.) LTD. By: /s/ Mary-Ann Corrigan-Davis Name: Mary-Ann Corrigan-Davis ------------------------------- Title: President ------------------------------ JOHN SANDS HOLDING CORP. By: /s/ Mary-Ann Corrigan-Davis Name: Mary-Ann Corrigan-Davis ------------------------------- Title: President ------------------------------ Signature Page 2 of 23 164 BANK OF AMERICA, N.A., as Global Agent By: /s/ Gary Flieger ---------------------------------- Name: Gary Flieger Title: Vice President Wire Transfer Instructions: Bank of America, N.A. Dallas, Texas ABA # 111000012 Account No. 3750836479 Account Name: Credit Services Ref: American Greetings Address for Other Notices; Bank of America, N.A. 1455 Market Street, 12th Floor San Francisco, California 94103 Attention: Gary Flieger Telephone: (415) 436-3484 Telefacsimile: (415) 436-3425 Signature Page 3 of 23 165 BANK OF AMERICA, N.A., as US Facility Lender and Issuing Bank By: /s/ Gretchen A. Spoo ---------------------------------- Name: Gretchen A. Spoo Title: Principal Lending Office: Bank of America, N.A. Attention: Myrna Lara, Credit Services Representative 1850 Gateway Boulevard Concord, California 94520 Telephone: (925) 675-8391 Telefacsimile:(925) 969-2819 Wire Transfer Instructions: Bank of America, N.A. Dallas, Texas ABA # 111000012 Account No. 3750836479 Account Name: Credit Services Ref: American Greetings Address for Other Notices: Bank of America, N. A. Attention: Gretchen Spoo 231 South LaSalle Chicago, Illinois 60697 Telephone: (312) 828-6654 Telefacsimile: (312) 987-0303 Signature Page 4 of 23 166 BANC OF AMERICA SECURITIES LIMITED, as U.K. Facility Agent By: /s/ Graham Radford ----------------------------------- Name: Graham Radford Title: Assistant Vice President Agency Office: Banc of America Securities Limited Attention: Karen Hall/Loans Agency 1 Alie Street London E1 8DE England Telephone: 011 44 20 8313 2992 Telefacsimile: 011 44 20 8313 2149 Wire Transfer Instructions: With respect to US Dollars: Bank of America, N.A., New York Account Bank of America, N.A., London A/c no. 37/60564 For further credit to Banc of America Securities Limited, London A/c no. 10985218 With respect to British Pounds Sterling: Bank of America, N.A., London CHAPS Code 16-50-50 Account Banc of America Securities Limited, London A/c no. 10985010 With respect to French Francs: Bank of America, N.A., London Account Banc of America Securities Limited, London A/c no. 10985292 With respect to euro: Bank of America, N.A., London Account Banc of America Securities Limited, London A/c no. 10985292 Signature Page 5 of 23 167 BANK OF AMERICA, N.A., as UK Facility Lender By: /s/ Gretchen Spoo ---------------------------------- Name: Gretchen Spoo Title: Principal Lending Office: Patricia A. Chambers, Loan Service Bank of America, N.A. 26 Elmfield Road Bromley, BR1 1WA Tel: 011 44 20 8313 2613 Fax: 011 44 20 8313 2140 Wire Transfer Instructions: With respect to British Pounds Sterling: direct by CHAPS to: Bank of America, N.A., London Chaps Code: 16-50-50 Swift Address: BOFAGB22 With respect to French Francs: Bank of America, N.A., London Swift Address: BOFAGB22 With respect to euro: Bank of America, N.A., London Swift Address: BOFAGB22 Attn.: Loan Service Ref.: American Greetings Address for Other Notices: Geraldine Simmons, US Multinationals Bank of America, N.A., London Branch 1 Alie Street London, E1 8 DE Tel.: 011 44 20 7634 4261 Fax: 011 44 20 7634 4707 Signature Page 6 of 23 168 NATIONAL CITY BANK, as US Facility Agent, US Facility Lender and as UK Facility Lender By: /s/ Robert S. Coleman ---------------------------------- Name: Robert S. Coleman Title: Vice President and Senior Lending Officer Lending Office: National City Bank 1900 E. Ninth Street, #01-2077 Cleveland, Ohio 44114 Attention: Robert S. Coleman Telephone: (216) 575-9714 Telefacsimile: (216) 222-0003 E-mail: Robert.Coleman@National-City.com Wire Transfer Instructions: National City Bank Cleveland, Ohio ABA No.: 041000124 Account No.: 151804 Account Name: Commercial Loan Operations Attn: Vern Johnson Operations Contact: National City Bank 1900 E. Ninth Street, #01-2077 Cleveland, Ohio 44114 Attention: Revette Vickerstaff, Manager Telephone: (216) 488-7080 Telefacsimile:(216) 488-7110 Signature Page 7 of 23 169 BANK ONE, NA, AUSTRALIA BRANCH, as Australian Facility Agent, Australian Facility Swing Line Lender and as Australian Facility Lender By: ---------------------------------- Name: --------------------------------- Title: -------------------------------- Lending Office: Bank One, NA, Australia Branch 90 Collins Street 19th FL STE-NMELB-1 Melbourne, Australia Credit Contact in Australia: Tim Blackmore Vice President Telephone: (613) 9668 2301 Telefacsimile: (613) 9650 2721 Cassandra Ho Credit Underwriter Telephone: (612) 9250 2128 Telefacsimile: (612) 9223 1823 Credit Contact in U.S.: Bank One, Michigan 611 Woodward MS# 8073 Detroit, MI 48226 Attn: Wes Sliwinski, Underwriter Telephone: (313) 225-1782 Telefacsimile: (313) 225-1671 E-mail: wieslaw_sliwinski@em.fcnbd.com Signature Page 8 of 23 170 Wire Transfer Instructions: Payment is to be made via RTGS Bank One, NA - Australia BSB 915 510 BIC Code: FNBCAU2X Ref: John Sands For Administrative Matters: Barry Chenoweth Loan Representative Phone: (618) 8228 2244 Fax: (618) 8223 2948 Signature Page 9 of 23 171 For Funding Transactions: Josh Whiting Dealer Trading Phone: 1-800-682-2244 or (618) 8223 2209 Fax: (618) 8223 2948 Signature Page 10 of 23 172 BA AUSTRALIA LIMITED, as Australian Facility Lender By: /s/ Tony Dowling --------------------------------- Name: Tony Dowling Title: Director By: /s/ Warren R. Whitley --------------------------------- Name: Warren R. Whitley Title: Company Secretary Lending Office: BA Australia Limited Level 63, MLC Centre 19-29 Martin Place Sydney, New South Wales 2000 Australia Attention: Evelyn Kirk Telephone: 612.9931.4237 Telefacsimile: 612.9221.1023 Wire Transfer Instructions: Payments in Australian Dollars Bank of America, NA Sydney branch Account No.: 11191019 BSB No.: 232001 Deposits to be made through: any Commonwealth Bank of Australia Branch for further credit to Bank of America, NA Sydney Payments in New Zealand Dollars Account Name: Bank of America NA Sydney branch Bank: Bank of New Zealand, Wellington Account No.: 5201-30600 Signature Page 11 of 23 173 BANK OF AMERICA CANADA, as Canadian Facility Lender By: Name: -------------------------------- Title: ------------------------------- Lending Office: Bank of America Canada Toronto Corporate Services Office 5651 200 Front Street West, 27th Floor Toronto, Ontario M5V 312 Canada Attention: Medina Sales De Andrade/ Richard J. Hall Telephone: 416.349.5433/416.348.4008 Telefacsimile: 416.349.4283/416.349.4283 Wire Transfer Instructions: Wire payment of funds DIRECT through IIPS to: Bank of America Canada 200 Front Street West, Toronto, Ontario TRANSIT #: 241 SWIFT CODE: BOFACATT Reference: Carlton Cards Attention: Agency Administration Signature Page 12 of 23 174 BANK ONE, MICHIGAN, as US Facility Lender By: Name: ------------------------------------ Title: ----------------------------------- Lending Office: 611 Woodward Avenue Detroit, Michigan 48226 Credit Contact: Bank One, Michigan 611 Woodward Avenue MS # 8073 Detroit, Michigan 48226 Attention: Wes Sliwinski, Underwriter Telephone: (313) 225-1782 Telefacsimile: (313) 225-1671 E-mail: wieslaw_sliwinski@em.fcnbd.com Wire Transfer Instructions: Bank One, Michigan Detroit, MI ABA No.: 072000326 Reference: American Greetings Account No.: LS2 Clearing Account 2891000007 Operations Contact: Bank One, Michigan 611 Woodward Avenue MS # 8079 Detroit, Michigan 48226 Attention: Karen Graham, Loan Service Associate Telephone: (313) 225-2911 Telefacsimile:(313) 225-1586 Signature Page 13 of 23 175 BANK ONE CANADA, as Canadian Facility Agent and as Canadian Facility Lender By: Name: ---------------------------------------- Title: --------------------------------------- Lending Office: Bank One Canada 161 Bay Street STE 4240 Toronto Ontario M5J 2S1 Canada Credit Contact in Canada: Steve Voigt First Vice President Telephone: (313) 225-4161 until August 2000, then (416) 365-5262 Telefacsimile: (313) 225-1689 until August 2000, then (416) 363-7574 Jeremiah Hynes Credit Officer Telephone: (416) 365-5260 Telefacsimile: (416) 363-7574 Credit Contact in U.S.: Bank One, Michigan 611 Woodward Avenue MS# 8073 Detroit, MI 48226 Attn: Wes Sliwinski, Underwriter Telephone: (313) 225-1782 Telefacsimile: (313) 225-1671 E-mail: wieslaw_sliwinski@em.fcnbd.com Wire Transfer Instructions: CAD Dollars: Royal Bank of Canada (swift-ROYCCAT2) Toronto, Ontario Account Number: 07172 000 047 1 Signature Page 14 of 23 176 Account: Bank One Canada Fav: (Name of Customer) USD Dollars: Bank One, Michigan (swift-NBDDUS33) Detroit, Michigan ABA Number: 072000326 Account: Bank One Canada Fav: (Name of Customer) For Administrative Matters: Lehong Zhang Operations Analyst Phone: (416) 365-8262 Fax: (416) 363-7574 Signature Page 15 of 23 177 BARCLAYS BANK PLC, as US Facility Lender, Bank Guarantee Issuer and UK Facility Lender By: /s/ Marlene Wechselblatt ---------------------------------------- Name: Marlene Wechselblatt Title: Vice President Lending Office: Barclays Bank PLC 222 Broadway 8th Floor New York, New York 10038 Attn: Marlene Wechselblatt Telephone: (212) 412-7642 Telefacsimile: (212) 412-7590 E-mail: Marlene.Wechselblatt@Barcap.com Wire Transfer Instructions: Barclays Bank PLC New York, NY 10038 ABA # 026002574 Account No. 050019104 Account Name: CLAD CONTROL Attn: Christina Batiz As US Facility Lender, Operations Contact: Barclays Bank PLC 222 Broadway 11th Floor New York, New York 10038 Attn: Christina Batiz Telephone: (212) 412-3701 Telefacsimile: (212) 412-5306 E-mail: Christina.Batiz@Barcap.com Signature Page 16 of 23 178 As UK Facility Lender, Operations Contact: Barclays Bank PLC 5 North Colonnade Canary Warf London E144BB England Attn: Michael Kenny, Executive Telephone: 011 020 7773 6441 Telefacsimile: 011 020 7773 6807 E-mail: Michael.Kenny@Barclayscapital.com Signature Page 17 of 23 179 KEYBANK NATIONAL ASSOCIATION , as US Facility Lender and UK Facility Lender By: /s/ Mark A. LoSchiavo ------------------------------------------ Name: Mark A. LoSchiavo Title: Portfolio Manager Lending Office: KeyBank National Association 127 Public Square Cleveland, Ohio 44114 Mail Code: OH-01-27-0606 Attention: Mark LoSchiavo Telephone: 216-689-0598 Telefacsimile: 216-689-4981 E-mail: mark_loschiavo@keybank.com Wire Transfer Instructions: KeyBank National Assn. Cleveland, OH ABA # 041001039 Account # 3057 Account Name: Commerical Loan Services RE: American Greetings Operations Contact: KeyBank National Association 127 Public Square Cleveland, Ohio 44114 Mail Code: OH-01-27-0606 Attention: Kathy Koenig, Loan Administrator Telephone: 216-689-4228 Telefacsimile: 216-689-4981 E-mail: kathy_a_koenig@keybank.com Signature Page 18 of 23 180 ROYAL BANK OF CANADA, as US Facility Lender, Canadian Facility lender and Australian Facility Lender By: /s/ Ritta Lee ---------------------------------------- Name: Ritta Lee Title: Senior Manager
- ------------------------------------------------- ----------------------------------------- -------------------------------------- Lending Office (US Facility) Lending Office (Canadian Facility) Lending Office (Australian Facility - ------------------------------------------------- ----------------------------------------- -------------------------------------- - ------------------------------------------------- ----------------------------------------- -------------------------------------- Royal Bank of Canada Royal Bank of Canada Royal Bank of Canada New York Branch 180 Wellington Street West 167 Mac Quarie Street, Level 18 One Liberty Plaza, 3rd Floor Toronto, Ontario M5J 1J1 Sydney NSW 2000 Australia New York, NY 10006-1404 Attention: Manager, For Business and Credit Matters: For Business and/or Credit Matters: Loans Administration Telephone: (212) 428-6332 Royal Bank of Canada (USA) Telefacsimile: (212) 428-2372 One Liberty Plaza, 3rd Floor Royal Bank of Canada New York, NY 10006-1404 One Liberty Plaza, 3rd Floor with a copy to: Attention: Ritta Lee New York, NY 10006-1404 Attention: Ritta Lee Telephone: (212) 428-6448 Attention: Ritta Lee Telephone: (212) 428-6448 Telefacsimile: (212) 428-6459 Telephone: (212) 428-6448 Telefacsimile: (212) 428-6459 Telefacsimile: (212) 428-6459 e-mail: rlee@royalusa.com (Australia) Wire Transfer Instructions: For Administrative Matters: Royal Bank of Canada 167 Mac Quarie Street, Level 18 Royal Bank of Canada via Chase Manhattan Bank Royal Bank of Canada Sydney NSW 2000 Australia New York, NY 180 Wellington Street West, 5th Floor Attention: John Secker ABA No.: 021-000-021 Toronto, Ontario M5J 1J1 Telephone: 612 9373 0880 Account No.: 9201033363 for Attention: Audrey Nelson Telefacsimile: 612 9221 2261 further credit to Telephone: (416) 974-0827 218-599-9, Royal Telefacsimile: (416) 974-8119 For Administrative Matters: Bank of Canada, NY Royal Bank of Canada Reference: American Greetings Wire Transfer Instructions: 167 Mac Quarie Street Sydney NSW 2000 Australia Attention: Manager Loans Admin. Royal Bank of Canada Telephone: 612 9233 5500 Operations Contact: Account No.: 00002-102-683-0 Telefacsimile: 612 9221 2261 Reference: EMCO Royal Bank of Canada One Liberty Plaza, 3rd Floor Wire Transfer Instructions: New York, NY 10006-1404 Attention: Manager, Royal Bank of Canada, Sydney Loans Administration ABA No.: BSB 935 001 Telephone: (212) 428-6332 Reference: Swift - ROYCAU2S Telefacsimile: (212) 428-2372 Account No.: Royal Bank of Canada - ------------------------------------------------- ----------------------------------------- --------------------------------------
Signature Page 19 of 23 181 MELLON BANK, N.A., as US Facility Lender By: /s/ Mark F. Johnston ---------------------------------------- Name: Mark F. Johnston Title: Vice President Lending Office: One Mellon Bank Center Room 370 Pittsburgh, PA 15258-0001 Attention: Mark F. Johnston Telephone: (412) 236-2793 Telefacsimile:(412) 236-1914 E-mail: johnston.mf@mellon.com Wire Transfer Instructions: Mellon Bank, N.A. Pittsburgh, PA ABA No.: 043000261 Account Name: American Greetings Corporation Account No.: 990873800 Attn: Loan Administration Operations Contact: Mellon Bank, N.A. Three Mellon Bank Center Room 1203 Pittsburgh, PA 15259-0003 Attention: Peggy Young, Loan Administrator Telephone: (412) 234-9448 Telefacsimile:(412) 209-6138 Signature Page 20 of 23 182 MELLON BANK, N.A., CANADA BRANCH, as Canadian Facility Lender By: ---------------------------------- Name: --------------------------------- Title: -------------------------------- Lending Office: Mellon Bank, N.A., Canada Branch 77 King Street West, Suite 3200 Toronto, Ontario M5K 1K2 Attention: Lisa Daley Telephone: (416) 860-2436 Telefacsimile:(416) 860-2439 Wire Transfer Instructions: Canadian Imperial Bank of Commerce ABA No.: CIBCCATT Reference: Carlton Cards Retail Account No.: 65-03810 For Credit: Mellon Bank, N.A., Canada Branch, Toronto (MELNCATT) Address for Other Notices: N/A Signature Page 21 of 23 183 PNC BANK, N.A., as US Facility Lender and UK Facility Lender By: /s/ Bruce G. Shearer --------------------------------------- Name: Bruce G. Shearer Title: Vice President Lending Office: PNC Bank, N.A. Mail Stop P1P0PP051 249 Fifth Avenue Pittsburgh, Pennsylvania 15222 Attention: David Wheaton Telephone: (412) 768-7814 Telefacsimile: (412) 762-7353 Email: David.Wheaton@PNCBank.com Wire Transfer Instructions: PNC Bank, N.A. ABA No.: 043-000-096 Account No.: G/L 196030010890 Reference: American Greetings 30443786 Address for Other Notices for Administrative Matters: PNC Bank, N.A. Mail Stop P2PTPP035 620 Liberty Avenue Pittsburgh, PA 15222 Attention: Peggy Collier Telephone: (412) 762-7946 Telefacsimile:(412) 768-4586 E-mail: HYPERLINK mailto:Peggy.Collier@PNCBank.com Peggy.Collier@PNCBank.com Signature Page 22 of 23 184 BANK ONE, NA, LONDON BRANCH, as Bank Guarantee Issuer By: ---------------------------------- Name: --------------------------------- Title: -------------------------------- Lending Office: Bank One ----------- -------------------- -------------------- -------------------- Credit Contact in UK: -------------------- -------------------- Telephone: ---------------- Telefacsimile: -------------- Credit Contact in U.S.: Bank One, Michigan 611 Woodward Avenue MS# 8073 Detroit, MI 48226 Attn: Wes Sliwinski, Underwriter Telephone: (313) 225-1782 Telefacsimile: (313) 225-1671 E-mail: wieslaw_sliwinski@em.fcnbd.com Wire Transfer Instructions: ----------------------------- ----------------------------- Account Number: ------------------ Account: Bank One --------------- Fav: (Name of Customer) For Administrative Matters: [Lehong Zhang Operations Analyst Phone: (416) 365-8262 Fax: (416) 363-7574] Signature Page 23 of 23 EX-10.II.A.XII 4 l85631aex10-ii_axii.txt EXHIBIT 10(II)(A)(XII) 1 Exhibit 10(ii)(A)(xii) PERFORMANCE BASED COMPENSATION ARRANGEMENTS FOR THE CHIEF EXECUTIVE OFFICER AND OTHER NAMED EXECUTIVE OFFICERS GENERAL In 1994 the shareholders approved a plan to reward the Company's Chairman and Chief Executive Officer ("CEO") on the basis of the Company's performance. In order for the Company to be able to deduct for tax purposes performance-based compensation in excess of $1,000,000 total compensation (the "Compensation Cap") payable to the CEO and the other Named Executive Officers, the Company's shareholders are required to reapprove the terms of these arrangements every fifth year, which they did last year. Shareholders approval is being sought again this year because changes have been made to these arrangements that require such re-approval. These arrangements are discussed above in the Report of the Compensation Committee of the Board of Directors on Executive Compensation under the caption "Annual Incentive Plan". The Annual Incentive Plan is applicable to the CEO and each other Named Executive Officer. If these arrangements are not approved this year by the shareholders, the Company will lose the tax deduction on any amount of performance-based compensation in excess of the Compensation Cap that the Company expects to pay the CEO and any Named Executive Officer. PERFORMANCE CRITERIA AND MAXIMUM COMPENSATION PAYABLE. The FY 2002 performance criterion that the Compensation Committee of the Board of Directors has established focuses on earnings. However, the Compensation Committee may add to or alter the performance objectives to include additional criteria from among the following: cash flow, revenue, pre-tax or after-tax profits, return on capital, return on equity, gross margin, operating or other expenses, earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization, net income, earnings per share, stock price appreciation, total shareholder return (share appreciation plus reinvested dividends), sales growth, productivity improvement, return on assets and operating earnings. In no event shall the compensation payable to the CEO or any other Named Executive Officer in accordance with the foregoing performance criteria exceed $3,000,000 during any one fiscal year. While the Compensation Committee has the authority to change the terms of performance-based compensation without seeking shareholder approval, under current law, in order to deduct any amounts in excess of the Contribution Cap that are attributable to performance-based compensation, the Company must obtain shareholder approval if any material terms are changed. EX-21 5 l85631aex21.txt EXHIBIT 21 1 EXHIBIT 21 AMERICAN GREETINGS CORPORATION Subsidiaries of the Registrant State / Jurisdiction Subsidiary of Incorporation - ---------------------------------------- ----------------------------- A.G. Industries, Inc. North Carolina Camden Graphics Group United Kingdom Carlton Cards (Canada) Limited Canada Carlton Cards (United Kingdom) Limited United Kingdom Carlton Cards Retail, Inc. Connecticut CPS Corporation of Delaware Inc. Delaware AmericanGreetings.com, Inc. Ohio Gibson Greetings, Inc. Ohio Hanson White Ltd. United Kingdom John Sands (Australia) Ltd. Delaware John Sands (New Zealand) Ltd. Delaware Magnivision, Inc. Delaware Plus Mark, Inc. Ohio EX-23 6 l85631aex23.txt EXHIBIT 23 1 EXHIBIT 23 Consent of Independent Auditors We consent to the incorporation by reference in (i) Post-Effective Amendment Number 1 dated May 27, 1986 to Registration Statement No. 2-89471 on Form S-3, (ii) Post-Effective Amendment Number 1 dated May 31, 1984 to Registration Statement No. 2-84911 on Form S-8, (iii) Registration Statement No. 33-975 on Form S-8 dated November 7, 1985, (iv) Registration Statement No. 33-16180 on Form S-8 dated July 31, 1987, (v) Registration Statement No. 33-45673 on Form S-8 dated February 4, 1992, (vi) Registration Statement No. 33-58582 on Form S-8 dated February 22, 1993, (vii) Registration Statement No. 33-61037 on Form S-8 dated July 14, 1995, (viii) Registration Statement No. 33-08123 on Form S-8 dated July 15, 1996, and (ix) Registration Statement No. 333-41912 on Form S-8 dated July 21, 2000 of our report dated March 27, 2001 with respect to the consolidated financial statements and schedule of American Greetings Corporation included in this Annual Report (Form 10-K) for the year ended February 28, 2001. /s/ Ernst & Young LLP Cleveland, Ohio April 27, 2001 -----END PRIVACY-ENHANCED MESSAGE-----