Common use of Positive Covenants of the Borrower Clause in Contracts

Positive Covenants of the Borrower. In addition to the covenants elsewhere in this Agreement, the Borrower covenants and agrees with the Lender that, at all times during the currency of this Agreement, it will: (a) pay the principal sum, interest and all other monies required to be paid to the Lender pursuant to this Agreement in the manner set forth herein; (b) duly observe and perform each and every of its covenants and agreements set forth in this Agreement, the Original Loan Agreement and the Lender's Security; (c) provide the Lender with immediate notice of any Event of Default; (d) maintain a Debt to Equity Ratio of not more than 2 to 1; (e) furnish to the Lender within 120 days after the end of its fiscal year, non-qualified audited consolidated financial statements, consisting of a balance sheet, statements of profit and loss, source and use of funds, all prepared in accordance with generally accepted accounting principles consistently applied; (f) furnish to the Lender, within 30 days of the end of each month: (i) unaudited non-consolidated financial statements for the month, including a balance sheet and statement of profit and loss prepared in accordance with generally accepted accounting principles, consistently applied; (ii) cost reports on active productions; (iii) reports of aged accounts receivable and accounts payable; and (iv) a copy of the Senior Lender's operating loan and margining report; (g) furnish to the Lender, before the Borrower's fiscal year end, an annual business plan, operating budget, including monthly cash flows and capital budget, for the forthcoming fiscal year on a consolidated basis together with a multi-year general strategic plan; (h) furnish to the Lender, within 60 days of the end of each fiscal quarter: (i) a covenant compliance certificate and report on corporate activities signed by the Chief Executive Officer and Chief Financial Officer; (ii) certificate of the Chief Financial Officer confirming that all applicable statutory filings have been made on a timely basis, including, without limitation, all federal and provincial tax credit filings; and (iii) copies of all material, including quarterly consolidated financial statements, which the Borrower is required to send to its shareholders; (i) hold a management meeting each month prior to the 23rd business day of each month, at which the Chief Executive Officer, President and Chief Financial Officer will present a review of the operational activities during the previous month; (j) hold a meeting of its board of directors not less frequently than once each fiscal quarter; (k) furnish to the Lender, at least 7 days before each such meeting, a copy of the quarterly report to directors as prepared for meetings of the board of directors of the Borrower; (l) maintain at least two directors on the board of directors of the Borrower, other than the nominee of the Original Lenders, who are not employees, officers or consultants of the Borrower, and who are acceptable to the Lender, and, if the number of directors changes, maintain the number of directors on the board of directors, excluding the nominee of the Original Lenders, who is not an employee, officer or consultant of the Borrower at a number which is at least 2/7ths of the total number of directors; and (m) use its best efforts during the term of this Agreement to comply with the requirements, spirit and intent of the corporate governance guidelines of the TSE, as amended from time to time.

Positive Covenants of the Borrower. In addition to the covenants elsewhere in this Agreement, the Borrower covenants and agrees with the Lender Lenders that, at all times during the currency of this Agreement, it will: (a) pay the principal sum, interest and all other monies required to be paid to the Lender Lenders pursuant to this Agreement in the manner set forth herein; (b) duly observe and perform each and every of its covenants and agreements set forth in this Agreement, the Original Loan Agreement and the Lender's Lenders' Security; (c) provide the Lender Lenders with immediate notice of any Event of Default; (d) maintain a Debt to Equity Ratio of not more than 2 to 1; (e) furnish to the Lender Lenders within 120 days after the end of its fiscal year, non-qualified audited consolidated financial statements, consisting of a balance sheet, statements of profit and loss, source and use of funds, all prepared in accordance with generally accepted accounting principles consistently applied; (f) furnish to the LenderLenders, within 30 days of the end of each month: (i) unaudited non-consolidated financial statements for the month, including a balance sheet and statement of profit and loss prepared in accordance with generally accepted accounting principles, consistently applied; (ii) cost reports on active productions; (iii) reports of aged accounts receivable and accounts payable; and (iv) a copy of the Senior Lender's operating loan and margining report; (g) furnish to the LenderLenders, before the Borrower's fiscal year end, an annual business plan, operating budget, including monthly cash flows and capital budget, for the forthcoming fiscal year on a consolidated basis together with a multi-year general strategic plan; (h) furnish to the LenderLenders, within 60 days of the end of each fiscal quarter: (i) a covenant compliance certificate and report on corporate activities signed by the Chief Executive Officer and Chief Financial Officer; (ii) certificate of the Chief Financial Officer confirming that all applicable statutory filings have been made on a timely basis, including, without limitation, all federal and provincial tax credit filings; and (iii) copies of all material, including quarterly consolidated financial statements, which the Borrower is required to send to its shareholders; (i) hold a management meeting each month prior to the 23rd business day of each month, at which the Chief Executive Officer, President and Chief Financial Officer will present a review of the operational activities during the previous month; (j) invite and allow one representative of each of the Lenders to attend each monthly management meeting as an observer; (k) hold a meeting of its board of directors not less frequently than once each fiscal quarter; (kl) on the written request of the Lenders, appoint a nominee of the Lenders to the board of directors of the Borrower; (m) furnish to the LenderLenders, at least 7 days before each such meeting, a copy of the quarterly report to directors as prepared for meetings of the board of directors of the Borrower; (ln) maintain at least two directors on the board of directors of the Borrower, other than the nominee of the Original Lenders, who are not employees, officers or consultants of the Borrower, and who are acceptable to the LenderLenders, and, if the number of directors changes, maintain the number of directors on the board of directors, excluding the nominee of the Original Lenders, who is are not an employeeemployees, officer officers or consultant consultants of the Borrower at a number which is at least 2/7ths of the total number of directors; and; (mo) pay or promptly reimburse the Lenders for the reasonable out-of-pocket travel, accommodation and other expenses of its representatives relating to any meeting of the board of directors or management of the Borrower; (p) if the Lenders have not nominated a director for election or appointment as a director of the Borrower, invite and allow two representatives of the Lenders to attend each meeting of the board of directors of the Borrower as observers, and, if a nominee of the Lenders is a director of the Borrower, allow one representative of the Lenders (in addition to the Lenders' nominee as a director) to attend each meeting of the board of directors of the Borrower as an observer; (q) enter into a non-competition agreement on terms acceptable to the Lenders, with each of the Principals, such agreement to be in effect for at least the term of this Agreement; (r) use its best efforts during the term of this Agreement to comply with the requirements, spirit and intent of the corporate governance guidelines of the TSE, as amended from time to time; (s) in addition to the obligations of the Company under paragraph (n) above, if one nominee of RBCC or WOF ceases to be a director, and the person who nominated the nominee is not entitled to nominate another director, the Company will nominate as a director to replace the retiring director, an individual who is an "unrelated director" within the meaning of the Corporate Governance Guidelines of the TSE; and (t) in addition to the obligations of the Company under paragraphs (n) and (s) above, if following the time a nominee of RBCC or WOF ceases to be a director of the Company as contemplated in paragraph (b) above, the nominee of the other of them ceases to be a director of the Company, the Lenders will have the right, in addition to the rights in paragraph (l) above, to nominate as a director to replace the second retiring director, an individual who is not a director, officer, employee or shareholder of any of the Lenders or their respective affiliates.

Positive Covenants of the Borrower. In addition to the covenants elsewhere in this Agreement, the The Borrower covenants and agrees with the Lender that, at all times during the currency of that so long as any Vansol Library:509781.1 (WORD)-6- monies will be outstanding under this Agreement, it will: (a) pay use its best efforts to obtain the principal sumwritten consent of America Online, interest and all other monies required to be paid Inc. ("AOL") to the Lender subordination of its security to the security of the Lender, as contemplated pursuant to this Section 5.18 of the Security Agreement between the Borrower and AOL dated December 6, 2002; provided that when used herein, "best efforts" shall not require the Borrower to commence any legal action against AOL prior to June 30, 2003, or the payment of any amounts to AOL other than as contemplated in the manner set forth hereinSection 5.18 of such security agreement; (b) duly observe cause to be executed and perform each delivered legal opinions of Borrower's counsel and every the Guarantor's counsel, in form and terms satisfactory to the Lender and its counsel, within five Business Days of its covenants and agreements set forth in the date of this Agreement, the Original Loan Agreement and the Lender's Security; (c) provide at all times maintain its corporate existence and the Lender with immediate notice corporate existence of any Event of Defaultall other corporations owned or controlled by it that own assets material to the Borrower's business; (d) maintain a Debt to Equity Ratio of not more than 2 to 1duly perform its obligations under this Agreement; (e) furnish to promptly pay when due all agency or finders' fees payable in connection with the Loan or this Agreement and indemnify and save harmless the Lender within 120 days after the end from all claims in respect of its fiscal year, non-qualified audited consolidated financial statements, consisting of a balance sheet, statements of profit and loss, source and use of funds, all prepared in accordance with generally accepted accounting principles consistently appliedany such fees; (f) furnish carry on and conduct its business in a proper business-like manner in accordance with good business practice and will keep or cause to the Lender, within 30 days be kept proper books of the end of each month: (i) unaudited non-consolidated financial statements for the month, including a balance sheet and statement of profit and loss prepared account in accordance with generally accepted accounting principles, consistently applied; (ii) cost reports on active productions; (iii) reports of aged accounts receivable and accounts payable; and (iv) a copy of the Senior Lender's operating loan and margining report; (g) furnish and give to the LenderLender within seven (7) Business Days of delivery of a written demand from the Lender such reports, before the Borrower's fiscal year endcertificates, an annual business plan, operating budgetupdated financial statements, including monthly cash flows internal financial and capital budget, for operational reports and documents and such other information with respect to the forthcoming fiscal year on a consolidated basis together with a multi-year general strategic planBorrower as the Lender may request; (h) furnish provide the Lender with written notice of any proposed financing made by or to the Lender, within 60 days of the end of each fiscal quarter: (i) a covenant compliance certificate and report on corporate activities signed by the Chief Executive Officer and Chief Financial Officer; (ii) certificate of the Chief Financial Officer confirming that all applicable statutory filings have been made on a timely basis, including, without limitation, all federal and provincial tax credit filings; and (iii) copies of all material, including quarterly consolidated financial statements, which the Borrower is required to send to its shareholdersBorrower; (i) hold a management meeting each month prior forthwith provide to the 23rd business day Lender copies of each monthall financial statements, at which the Chief Executive Officerboth audited and unaudited, President and Chief Financial Officer will present a review of the operational activities during the previous monthas they become available from time to time; (j) hold a meeting furnish and give to the Lender (if such is the case) notice that there has occurred and is continuing an Event of its board Default under this Agreement or any event which would constitute an Event of directors not less frequently than once each fiscal quarter;Default hereunder or thereunder and specifying the same; and (k) furnish perform and do all such acts and things as are necessary to perfect and maintain the security provided to the Lender, at least 7 days before each such meeting, a copy of the quarterly report Lender pursuant to directors as prepared for meetings of the board of directors of the Borrower; (l) maintain at least two directors on the board of directors of the Borrower, other than the nominee of the Original Lenders, who are not employees, officers or consultants of the Borrower, and who are acceptable to the Lender, and, if the number of directors changes, maintain the number of directors on the board of directors, excluding the nominee of the Original Lenders, who is not an employee, officer or consultant of the Borrower at a number which is at least 2/7ths of the total number of directors; and (m) use its best efforts during the term of this Agreement to comply with the requirements, spirit and intent of the corporate governance guidelines of the TSE, as amended from time to timeAgreement.