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Exhibit 10b
ANCILLARY AGREEMENT
THIS AGREEMENT made the 17th day of April, 1997.
B E T W E E N:
BT BANK OF CANADA
(hereinafter referred to as "BT")
OF THE FIRST PART
- AND -
HONGKONG BANK OF CANADA
(hereinafter referred to as "HKB")
OF THE SECOND PART
- AND -
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE
INVESTMENTS, a business trust existing under the laws
of the State of Ohio,
(hereinafter referred to as "FUR")
OF THE THIRD PART
WHEREAS:
A. The Borrower, BT and HKB have entered into the Amended and Restated Credit
Agreement (as defined below);
B. In connection with the Amended and Restated Credit Agreement, the parties
hereto have agreed to enter this Agreement and the Security Trust Indenture (as
defined below);
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of these respective
covenants, agreements, representations, warranties and indemnities of the
parties hereinafter contained and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged by each party), the
parties hereby agree as follows:
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ARTICLE 1
INTERPRETATION
1.1 DEFINED TERMS - For the purposes of this Agreement, unless the context
otherwise requires, the following terms shall have the meanings set out below
and grammatical variations of such terms shall have corresponding meanings:
(a) "ACQUISITION FACILITY" has the meaning given to such term in the Amended
and Restated Credit Agreement;
(b) "ADDITIONAL EQUITY" means at any time, with respect to FUR, the net
proceeds from the issuance of equity securities subsequent to April 17,
1997;
(c) "AGREEMENT" means this Agreement, and all schedules attached hereto as it
may be amended from time to time;
(d) "AFFILIATE" has the meaning given to such term in the CBCA;
(e) "AGENT" means the Agent under the Amended and Restated Credit Agreement;
(f) "AGGREGATE ACCOMMODATIONS OUTSTANDING" means all Accommodations Outstanding
under the Amended and Restated Credit Agreement, plus all interest, fees
(excluding any fee payable under Section 2.11 of the Amended and Restated
Credit Agreement) and other amounts payable under the Amended and Restated
Credit Agreement to BT and HKB all as determined at the time of the Put
Closing Date without regard to or taking into account reductions in such
amount under any proposal, plan of compromise, arrangement or moratorium in
respect of the Borrower under any insolvency or reorganization, including
without limitation, the Bankruptcy and Insolvency Act (Canada), the
Companies Creditors Arrangement Act (Canada) or the Winding-up and
Restructuring Act (Canada) or similar laws in other jurisdictions;
(g) "AMENDED AND RESTATED CREDIT AGREEMENT" means the credit agreement dated as
of November 13, 1996 among the Borrower, as borrower, Canadian Imperial
Bank of Commerce ("CIBC") and HKB, as lenders, and CIBC, as agent, as
assigned in part to BT by CIBC, in its capacity as lender and as agent, by
assignment agreement dated as of the date hereof (the "CIBC/BT Assignment
Agreement"), and as amended and restated by an amended and restated credit
agreement, dated as of the date hereof, and as may be amended or restated
or assigned from time to time;
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(h) "ASSIGNED INTEREST" means with respect to either BT or HKB that person's
right, title and interest in and to the Amended and Restated Credit
Agreement including without limitation (i) the Aggregate Accommodations
Outstanding, (ii) all Security given by the Borrower to the Agent pursuant
to the Amended and Restated Credit Agreement, and (iii) the guarantee given
by the Guarantors to the Agent pursuant to the Amended and Restated Credit
Agreement;
(i) "ASSIGNMENT AGREEMENT" means the form of assignment agreement set out in
Schedule "A" attached hereto, or such other form of assignment agreement as
the parties may mutually agree upon;
(j) "ASSOCIATE" has the meaning given to such term in the CBCA;
(k) "BORROWER" means Imperial Parking Limited and its successors;
(l) "BT" means BT Bank of Canada and its successors;
(m) "BUSINESS DAY" means any day, other than Saturday or Sunday, on which banks
are generally open for business in Toronto, Ontario and Cleveland, Ohio;
(n) "CANADIAN DOLLAR EQUIVALENT" means, on any date, the amount of Canadian
dollars which can be purchased with a specified amount of United States
dollars at the spot buying rate for Canadian dollars quoted by BT at
approximately 12:00 noon (Toronto time) on such day if it is a business day
or the immediately preceding business day if such day is not a business
day;
(o) "CBCA" means the Canada Business Corporations Act, as in effect on the date
hereof;
(p) "COLLATERAL AMOUNT" means, as at the third day following the delivery of a
Collateralization Notice, the aggregate of:
(i) the full amount outstanding under the Term Facility;
(ii) the maximum amount that is available under the Acquisition Facility;
and
(iii) the maximum amount that is available under the Operating Facility,
all pursuant to the terms of the Amended and Restated Credit Agreement;
(q) "COLLATERALIZATION NOTICE" as the meaning set out in Section 6.1;
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(r) "COLLATERALIZATION EVENT" means any of:
(i) the Net Worth of FUR as calculated as at the end of any three month
period ending on the last day of March, June, September or December in
each year being less than the total of:
(A) $150,000,000; and
(B) 80% of Additional Equity;
(ii) a Material Adverse Change occurring concerning FUR;
(iii) any event or series of events by which (i) any "person" or "group"
(as such terms are used in Sections 13(d) and 14(d)(2) of the United
States Securities Exchange Act of 1934 (the "Exchange Act") becomes,
whether by means of any issuance or direct or indirect transfer of
securities, merger, consolidation, liquidation, dissolution or
otherwise, the "beneficial owner" (as such term is used in Rule 13d-3
under the Exchange Act, except that a person shall be deemed to be a
beneficial owner of all securities that any such person has the right
to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly through one or more
intermediaries, of more than 30% of the total voting rights attaching
to the then-outstanding voting securities of FUR or FUMI, or (ii)
during any period of two consecutive years, individuals who at the
beginning of such period constituted FUR's board of trustees or FUMI's
board of directors (together with any new trustees or new directors
whose election by the FUR's board of trustees or FUMI's board of
directors (as the case may be) or whose nomination for election by
FUR's or FUMI's stockholders, as applicable, was approved by a vote of
66-2/3% of FUR's trustees or FUMI's directors (as applicable) then
still in office who were either trustees or directors (as applicable)
at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason (other than
death or disability) to constitute a majority of FUR's trustees or
FUMI's directors (as applicable) then still in office;
(iv) without the prior written consent of BT and HKB, FUR selling assets in
a transaction or series of transactions having a value (determined in
a manner similar to that adopted in determining Total Asset Value for
purposes of this Section 1.1(r)(iv)) greater than 25% of its Total
Asset Value;
(v) the total liabilities of FUR less the current liabilities of FUR
(excluding any current liabilities of FUR relating to the current
portion of long
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xxxx xxxx xx XXX), all determined in accordance with United States
generally accepted accounting principles, being greater than 65% of
its adjusted total asset value where adjusted total asset value is
equal to (A) the sum of (y) the Total Asset Value determined in
accordance with United States generally accepted accounting
principles and (z) all accumulated depreciation relating to the
total assets of FUR less (B) FUR's current assets;
(vi) FUMI and its Affiliates ceasing to own shares of the Borrower
carrying at least 66 2/3% of the votes attaching to all the
outstanding voting shares of the Borrower;
(vii) any Immediate Put Event, except that (A) if such Immediate Put
Event is one described in Section 1.1(y)(ii), it shall not be deemed
to give rise to a Collateralization Event if it is cured within 15
business days after written notice of the same has been given to
FUR, and (B) if such Immediate Put Event is one described in Section
1.1(y)(iii), it shall not be deemed to give rise to a
Collateralization Event if it is cured within five business days
after written notice of the same has been given to FUR; and
(viii) any event of default or other circumstance under any agreement to
which FUR is a party (other than this Agreement or the Security
Trust Indenture) that automatically or otherwise has resulted in an
acceleration of the time for payment of any monetary obligation of
FUR in an amount exceeding $10,000,000 unless the same has been
remedied or waived within five business days after arising.
(s) "ELIGIBLE SECURITIES" means bonds, debentures or other evidences of
indebtedness of or fully guaranteed as to the payment of principal and
interest by the full faith and credit of the Government of the United
States of America or the Government of Canada, provided the same are
denominated in United States dollars or Canadian dollars and have a term
to maturity at the time of deposit by FUR with the Trustee or at the time
of purchase by the Trustee, as the case may be, of not more than one year;
(t) "FUMI" means First Union Management, Inc. and its successors;
(u) "GUARANTEES AND GUARANTEE SECURITY" means, collectively, the guarantees
given by the Guarantors to the Agent pursuant to the Amended and Restated
Credit Agreement and all security therefor;
(v) "GUARANTORS" means guarantors identified in Schedule D to the CIBC/BT
Assignment Agreement;
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(w) "HKB" means Hongkong Bank of Canada and its successors;
(x) "IMMEDIATE PUT CLOSING DATE" has the meaning given to such term in Section
3.2;
(y) "IMMEDIATE PUT EVENT" means the occurrence of any of the following:
(i) a default or breach by FUR of any of its covenants and obligations
under this Agreement or the Security Trust Indenture arising upon or
otherwise relating to the failure by FUR to (A) make any payment
required to be made by it pursuant to any provision of this
Agreement or the Security Trust Indenture, (B) deposit with the
Trustee any Eligible Securities required to be so deposited pursuant
to this Agreement or the Security Trust Indenture or (C) file any
financing statement, financing change statement or any other
document or to do any other act or thing necessary or advisable, in
the reasonable opinion of counsel to BT or HKB, to perfect or to
maintain the perfection of the Pledge or to ensure that for so long
as the Security Trust Indenture remains in effect the Pledge
constitutes a first priority Security Interest in the Collateral
(the terms "Pledge", "Security Interest" and "Collateral" having the
respective meanings given to them in the Security Trust Indenture);
(ii) a default or breach by FUR of any of its covenants and obligations
under this Agreement or the Security Trust Indenture other than a
default or breach described in paragraph (y)(i) above; or
(iii) an inaccuracy or breach in any representation and warranty made by
FUR herein or in the Security Trust Indenture;
(iv) FUR (1) taking any action for the termination, winding-up,
liquidation or dissolution of FUR, or ceasing to carry on business,
or ceasing to pay its current obligations in the ordinary course of
business as they generally become due, (2) making a general
assignment for the benefit of creditors or becoming insolvent or
unable to meet its obligations as they generally become due, (3)
filing a petition in voluntary liquidation or bankruptcy, (4) filing
a petition or answer or consent seeking the reorganization of FUR,
or the readjustment of any of the indebtedness of FUR, (5)
commencing any case or proceeding in respect of FUR under applicable
insolvency or bankruptcy laws now or hereafter existing (including
the Companies' Creditors Arrangement Act), (6) consenting to the
appointment of any receiver, receiver-manager, administrator,
custodian, liquidator or trustee of all or any part of its assets or
property (provided that the mere grant by FUR of security interests
over all or part of their respective assets or property to a
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trustee, other than to a trustee-in-bankruptcy, in accordance with
the provisions of normal course security arrangements shall not of
itself constitute an Immediate Put Event), (7) taking any corporate
or other organizational action for the purpose of effecting any of
the foregoing including by (A) convening any meeting of FUR for the
purpose of considering any resolution for (or to petition for) its
winding-up, liquidation or dissolution or (b) the passing by the
security holders of FUR of a resolution for its winding-up,
liquidation or dissolution, or (8) being adjudicated as bankrupt or
insolvent;
(v) if any petition for any proceedings in bankruptcy or liquidation or
for the winding-up, reorganization or readjustment of indebtedness
of FUR shall be filed, or any case or proceeding shall be commenced,
under any applicable bankruptcy or insolvency laws now or hereafter
existing (including the Companies' Creditors Arrangement Act),
against FUR, or any receiver, receiver-manager, administrator,
custodian, liquidator or trustee shall be appointed for FUR or for
all or any part of FUR's assets or property, or any order for relief
or for the winding-up, dissolution or liquidation shall be entered
in a proceeding with respect to FUR under the provisions of the
United States Bankruptcy Code, the CBCA, the Bankruptcy and
Insolvency Act (Canada), the Companies' Creditors Arrangement Act
(Canada) or any other applicable or similar bankruptcy or insolvency
laws, in each case, as amended, and such proceeding or appointment
shall not be dismissed or discharged, as the case may be, within 45
days after the filing thereof of such appointment;
(vi) the commencement by or on behalf of FUR in any court of competent
jurisdiction of any action or proceeding to challenge, or the
inclusion in pleadings filed by or on behalf of FUR with any court
of competent jurisdiction of a request for relief that challenges,
the validity of this Agreement or the Security Trust Indenture;
(z) "IMMEDIATE PUT NOTICE" has the meaning given to such term in Section 3.2;
(aa) "IMMEDIATE PUT RIGHT" has the meaning given to such term in Section 3.2;
(bb) "MATERIAL ADVERSE CHANGE" means any state of fact, change, event or
occurrence which has a material adverse effect on (i) the business,
operations, results of operations, assets, liabilities, prospects or
financial condition of FUR considered on a consolidated basis with its
subsidiaries, or (ii) the ability of FUR to perform its obligations under
this Agreement (including without limitation its obligations under
Articles 3 and 4 hereof);
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(cc) "NET WORTH" means at any time, with respect to FUR, the total equity of
FUR determined as of such time in accordance with accounting principles
generally accepted in the United States, at the relevant time applied on a
consistent basis;
(dd) "OPERATING FACILITY" has the meaning given to such term in the Amended and
Restated Credit Agreement;
(ee) "PERSON" means an individual, a firm, a corporation, a syndicate, a
partnership, an association, a joint venture, a trust, a government or
governmental agency and every other legal or business entity whatsoever;
(ff) "PURCHASE PRICE" means, with respect to the purchase and sale of any
portion of the Assigned Interest upon the exercise of the Put Right or
Immediate Put Right by either BT or HKB hereunder, the sum of (i) the
portion of the Aggregate Accommodations Outstanding owing to the Vendor,
and (ii) $135,000 less all prepayment amounts previously paid to the
Lenders (as defined in the Amended and Restated Credit Agreement)
multiplied by a fraction equal to the portion of the Aggregate
Accommodations Outstanding owing to the Vendor over the Aggregate
Accommodations Outstanding;
(gg) "PUT CLOSING DATE" means January 17, 2000;
(hh) "PUT NOTICE" has the meaning given to such term in Section 3.1;
(ii) "PUT OPTION PRICE" has the meaning given to such term in Section 2.1;
(jj) "PUT PERIOD" means any time during the 30-day period which runs from
November 18, 1999 to December 17, 1999;
(kk) "PUT RIGHT" has the meaning given to such term in Section 3.1;
(ll) "QUARTERLY REPORT" has the meaning given to such term in Section 8.1;
(mm) "SECURITY" means all security given by the Borrower to the Agent pursuant
to the Amended and Restated Credit Agreement;
(nn) "SECURITY TRUST INDENTURE" means the agreement dated as of the date hereof
among FUR, BT, HKB and Montreal Trust Company of Canada;
(oo) "TAX ACT" means the Income Tax Act (Canada), as amended from time to time;
(pp) "TERM FACILITY" has the meaning given to such term in the Amended and
Restated Credit Agreement;
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(qq) "TOTAL ASSET VALUE" means at any time with respect to FUR the total assets
of FUR determined in accordance with United States generally accepted
accounting principles or, in the discretion of FUR, the aggregate current
fair market value of the total assets of FUR determined by FUR confirmed
in a manner and by an independent third party acceptable to each of BT and
HKB;
(rr) "TRUSTEE" means Montreal Trust Company of Canada, acting in its capacity
as collateral agent under the Security Trust Indenture; and
(ss) "VENDOR means the party, being either BT, in its capacity as lender and
as Agent, or HKB that has exercised its Put Right with respect to its
Assigned Interest.
1.2 HEADINGS - The division of this Agreement into sections, paragraphs and
clauses and the insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation of this Agreement. The terms
"this Agreement", "hereof", "herein", "hereunder" and similar expressions refer
to this Agreement and not to any particular section or other portion hereof and
include any agreement or instrument supplemental or ancillary hereto.
1.3 CURRENCY - Unless otherwise indicated, all dollar amounts referred to in
this Agreement are expressed in United States funds.
1.4 GOVERNING LAW - This Agreement shall be construed and interpreted in
accordance with the laws of the State of Ohio. Each of the parties hereby
irrevocably attorns to the non-exclusive jurisdiction of the courts of the State
of Ohio.
1.5 SEVERABILITY - If any provision contained herein is determined to be void or
unenforceable in whole or in part, it shall not be deemed to affect or impair
the validity of any other provision herein and each such provision is deemed to
be separate and distinct.
1.6 ENTIRE AGREEMENT - This Agreement and the Security Trust Indenture
constitute the entire agreement between the parties with respect to the subject
matter hereof.
1.7 BUSINESS DAYS - Any action or payment required or permitted to be taken or
made hereunder on a day that is not a business day may be taken or made on the
next succeeding business day.
1.8 NUMBER AND GENDER - Words importing the singular number only shall include
the plural and vice versa and words importing the use of any gender shall
include all genders.
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ARTICLE 2
PUT OPTION PRICE
2.1 PUT OPTION PRICE - In consideration of the grant by FUR to BT and HKB of the
Put Right and the other covenants and agreements of FUR contained in this
Agreement, each of BT and HKB hereby agree to pay to FUR $225,000 (in the
aggregate, the "Put Option Price").
2.2 SATISFACTION OF PUT OPTION PRICE - BT and HKB hereby agree to deliver to
FUR, upon the execution and delivery of this Agreement by FUR, in full payment
and satisfaction of the Put Option Price, one or more certified cheques or bank
drafts made payable to or to the order of FUR in immediately available funds in
the aggregate amount of the Put Option Price less applicable withholding taxes.
ARTICLE 3
PUT RIGHTS
3.1 PUT RIGHT - At any time during the Put Period, each of BT and HKB shall have
the right (the "Put Right") exercisable by notice (the "Put Notice") in writing
delivered to FUR and the Trustee to require FUR to purchase all but not less
than all of the Assigned Interest of such person on the Closing Date, which
purchase is to be made at the Purchase Price.
3.2 IMMEDIATE PUT RIGHT - Upon the occurrence of any Immediate Put Event, each
of BT and HKB shall have the right (the "Immediate Put Right"), exercisable by
notice (the "Immediate Put Notice") in writing delivered to FUR at any time
following the occurrence of the Immediate Put Event until the fifth day
following the giving of notice by FUR to BT and HKB of such Immediate Put Event,
to require FUR to purchase all but not less than all of the Assigned Interest of
such person on the applicable Immediate Put Closing Date, which purchase is to
be made at the applicable Purchase Price. A copy of the Immediate Put Notice
shall be provided to the Trustee as soon as reasonably practicable after being
given to FUR. The Immediate Put Notice shall set out the Immediate Put Closing
Date for the purchase and sale of such Assigned Interest, which date shall not
be more than 10 days following the date of delivery to FUR of the Immediate Put
Notice (the "Immediate Put Closing Date"). The due delivery of an Immediate Put
Notice shall override any other Put Notice theretofore or thereafter given, and
the closing of the purchase and sale transaction effected by the giving of the
Immediate Put Notice shall occur in accordance with such Immediate Put Notice
notwithstanding any other provision hereof to the contrary.
3.3 PURCHASE AND SALE UPON EXERCISE - Upon the exercise of the Put Right or
Immediate Put Right, the Vendor shall sell, and FUR shall purchase, the Assigned
Interest as required to be so purchased and sold pursuant to the terms of this
Section
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3. Any such purchase and sale of the Assigned Interest shall be completed on
such other terms and conditions as are set out in Section 4.
ARTICLE 4
CLOSING ARRANGEMENTS
4.1 PLACE AND TIME OF CLOSING - The closing of the purchase and sale of the
Assigned Interest shall take place at the offices of Fasken Xxxxxxxx Xxxxxxx at
10:00 a.m. (Toronto time) on the Put Closing Date (or in the case of an
Immediate Put Right on the Immediate Put Closing Date), or at such other place
and time as FUR and the Vendor may mutually determine, the actual time of
closing on such Closing Date being hereinafter referred to as the "Time of
Closing".
4.2 CLOSING DELIVERIES
At the Time of Closing:
(i) FUR shall pay the Purchase Price for the Assigned Interest by delivery
to the Vendor of a certified cheque or bank draft in immediately
available Canadian funds in the amount of the Purchase Price; and
(ii) each Vendor shall deliver to FUR:
(A) an acknowledgement in writing of the receipt by such Vendor of
any payment made pursuant to Subsection 4.2(i) and that such
delivery to the Vendor constitutes good delivery to such Vendor
of the Purchase Price for the Assigned Interest being sold by
such Vendor;
(B) a representation and warranty in writing from such Vendor that
it is not a non-resident of Canada within the meaning of the Tax
Act; and
(iii) FUR and the Vendor or Vendors, if both BT and HKB exercise their
respective Put Rights, shall enter into the Assignment Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties by FUR - FUR represents and warrants to each
of BT and HKB as follows and acknowledges and confirms that they are relying on
such representations and warranties in connection with the transactions
contemplated hereby:
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(a) FUR is a business trust duly formed and validly existing under the laws of
the State of Ohio and has all necessary power and authority to own or lease
its property, to enter into this Agreement and the Security Trust Indenture
and to perform its obligations hereunder and thereunder;
(b) all necessary proceedings have been taken by FUR to enable it to enter into
this Agreement and the Security Trust Indenture and to perform its
obligations hereunder and thereunder;
(c) the execution and delivery of this Agreement and the Security Trust
Indenture by FUR and the consummation of the transactions contemplated
hereby and thereby will not, with or without the giving of notice, lapse of
time or both, breach or violate any of the provisions of, constitute a
default under, conflict with or cause the acceleration of any obligation of
FUR under:
(i) the Security Trust Indenture, as amended, or any resolution of the
board of trustees (or any committee thereof) of FUR;
(ii) any agreement to which FUR is a party or by which it is bound;
(iii) any judgment, decree, order or award of any court, governmental body
or arbitrator having jurisdiction over FUR; or
(iv) any applicable law, statute, ordinance, regulation or rule;
(d) each of this Agreement and the Security Trust Indenture has been duly
executed and delivered by FUR and is a legal, valid and binding obligation
of FUR, enforceable against FUR by BT and HKB in accordance with its terms;
(e) there is no requirement for FUR to make any filing with, give any notice to
or obtain any licence, permit, certificate, registration, authorization,
consent or approval of, any government or regulatory authority nor is the
consent or approval of any other third party required as a condition to the
lawful consummation by FUR of the transactions contemplated by this
Agreement or the Security Trust Indenture; and
(f) the execution of this Agreement, the Security Trust Indenture and the
Amended and Restated Credit Agreement and the completion of the
transactions contemplated thereby will not affect the qualification of FUR
as a "real estate investment trust" under the Internal Revenue Code of
1986, as amended.
5.2 REPRESENTATIONS AND WARRANTIES RELATING TO BT AND HKB - Each of BT and HKB
represents and warrants to FUR in respect of itself as follows and acknowledges
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that FUR is relying on such representations and warranties in connection with
the matters contemplated hereby:
(a) at the Put Closing Date or the Immediate Put Closing Date, it will be
legally authorized to enter into and deliver the Assignment Agreement to
which it is a party; and
(b) at the Put Closing Date or the Immediate Put Closing Date, it will be the
legal and beneficial owner of its Assigned Interest and that it will not
have granted in respect of such Assigned Interest any adverse claims, liens
or other encumbrances of any kind.
5.3 ABSENCE OF REPRESENTATIONS AND WARRANTIES CONCERNING THE ASSIGNED INTEREST -
Except as set forth in Section 5.2, neither BT nor HKB makes any representation
or warranty to FUR concerning the form, substance, accuracy or completeness of
the Amended and Restated Credit Agreement, the Security, the Guarantees and the
Guarantee Security, or the other Credit Documents (as defined in the Amended and
Restated Credit Agreement) or any other document or information made available
to FUR and shall not be responsible to FUR for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of any of the
Amended and Restated Credit Agreement, the Security, the Guarantees and the
Guarantee Security or of the Credit Documents (as defined in the Amended and
Restated Credit Agreement). Any Assigned Interest acquired hereunder by FUR from
either BT or HKB shall be acquired on an "as-is-where-is" basis subject to
Section 5.2.
ARTICLE 6
COLLATERALIZATION
6.1 REQUIRED NOTIFICATIONS AND COOPERATION
(a) Either BT or HKB may deliver to FUR written notice of the occurrence of a
Collateralization Event (the "Collateralization Notice") as soon as
reasonably practicable thereafter. Such notice shall contain a brief
description of the event or circumstance giving rise to such
Collateralization Event.
(b) Each of BT and HKB shall have the right, if in its sole judgment a
Collateralization Event may exist or may possibly occur in the future at
any time, from time to time to require by notice in writing delivered to
FUR that FUR provide or cause to be provided to it such information
relating to FUR as may be reasonably necessary to permit BT and HKB to
assess the likelihood of the prospective occurrence of a Collateralization
Event or to verify that such an event has occurred.
6.2 DEPOSIT OF ELIGIBLE SECURITIES - On the 3rd day following the delivery by
either BT or HKB of a Collateralization Notice, FUR shall deliver to and deposit
with the
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Trustee to be held by the Trustee in accordance with the Security Trust
Indenture Eligible Securities having an aggregate face value (or in the case of
Eligible Securities denominated in United States dollars, the Canadian Dollar
Equivalent thereof) equal to the Collateral Amount.
6.3 DEPOSIT OF ADDITIONAL ELIGIBLE SECURITIES - In the event that as at the end
of any calendar quarter the aggregate value of all Eligible Securities then held
by the Trustee under the Security Trust Indenture is less than the Collateral
Amount as a result of the diminution of the Canadian Dollar Equivalent
(calculated as at the end of the calendar quarter) value of any Eligible
Securities then held by the Trustee that are denominated in United States
dollars, then FUR shall, within 3 days of delivery to BT and HKB of a Quarterly
Report relating to such calendar quarter, deliver Eligible Securities having an
aggregate cost (not including commissions, fees and expenses of acquisition) at
least equal to the difference between the aggregate of all Eligible Securities
held by the Trustee at the end of the calender quarter and the Collateral
Amount. If FUR shall hedge the foreign exchange risk relating to the deposit
with the Trustee of Eligible Securities denominated other than in Canadian
dollars in a manner other than as set forth in this Section 6.3 but with similar
effect, then it may request the consent of BT and HKB to the waiver of the
provisions of this Section 6.3, which consent is not to be unreasonably
withheld.
ARTICLE 7
RECOURSE
7.1 RIGHTS AGAINST THE BORROWER - The rights of BT and HKB under this Agreement
shall be in addition to, and not in substitution for, all rights which BT and
HKB or either of them may possess with respect to the Borrower, the Guarantors
and other parties under the Amended and Restated Credit Agreement, the Security,
the Guarantees and Guarantee Security or any other Credit Documents. The
obligations of FUR under this Agreement shall not be diminished or affected by,
and neither BT nor HKB shall be liable or accountable to FUR for any failure to
take, any action or exercise any remedies under the Amended and Restated Credit
Agreement, the Security, the Guarantees and Guarantee Security or any other
Credit Documents.
7.2 RECOURSE AGAINST FUR - In addition to the rights of BT and HKB pursuant to
the Security Trust Indenture, upon the occurrence of any Immediate Enforcement
Default under the Security Trust Indenture, each of BT and HKB shall have
recourse in executing any judgment against FUR to all the property and assets of
FUR.
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ARTICLE 8
ADDITIONAL COVENANTS
8.1 QUARTERLY REPORTS - FUR shall deliver to BT and HKB as soon as practicable
following the end of each calendar quarter (but in any event nor more than 45
days thereafter), a report (a "Quarterly Report") certified by any two senior
officers of FUR setting out the Total Asset Value and Net Worth for FUR and, if
a Collateralization Event has occurred, the aggregate value of all Eligible
Securities then held by the Trustee under the Security Trust Indenture and
accompanied by all supporting calculations and further information as may be
reasonably necessary to permit BT and HKB to verify the Total Asset Value, Net
Worth and the value of Eligible Securities as set out therein.
8.2 CONFIDENTIALITY - BT and HKB shall treat all information received pursuant
to the provisions of this Agreement (including, without limitation, any
financial statements of the Borrower and any information provided by FUR
pursuant to Section 6.1) as confidential and shall not use or disclose to any
person (other than its directors, officers, agents, employees or representatives
(collectively, the "Representatives") who have a need to know it) or permit any
of its Representatives to use or disclose to any person, directly or indirectly,
any such information at any time hereafter; provided, however, that nothing in
this Section 8.2 shall preclude BT, HKB or any Representative from using or
disclosing any such information:
(a) if such information is available to the public or in the public domain
at the time of such disclosure or use, without breach of this
Agreement;
(b) if disclosure is required to be made by any law, regulation,
governmental body or authority or stock exchange or dealer quotation
system on which securities of BT, HKB or any of its Affiliates are
. listed or quoted or by court order; or
(c) if disclosure is made to a court which is determining the rights of
the parties under this Agreement or if use or disclosure otherwise may
be reasonably necessary in connection with the rights, remedies,
obligations and liabilities of BT or HKB under this Agreement or any
other agreement contemplated hereby.
8.3 IMPLEMENTATION - Each of the parties hereto agrees to execute and deliver
all such instruments and other documents and to do all such other acts and
things as may be necessary or advisable from time to time to give effect fully
to the provisions and intent of this Agreement.
16
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ARTICLE 9
MISCELLANEOUS
9.1 NOTICES -
(a) Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be delivered in person or
transmitted by telecopy or similar means of recorded electronic
communication, addressed as follows:
(i) If to BT:
BT Bank of Canada
Xxxxx Xxxx Xxxxx
Xxxxx 0000, Xxxxx Xxxxx
P.O. Box 100
TORONTO ON M5J 2J2
Attention: X. Xxxxxx
President and Chief Executive Officer
------------------------------------------------
Telecopy No.: (000) 000-0000
with a copy to:
BT Securities Corporation
Real Estate Investment Banking
000 Xxxx Xxxxxx, 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: X. Xxxxxxx
Vice-President, Corporate Finance
--------------------------------------------
Telecopy No.: (000) 000-0000
with a copy to:
Osler, Xxxxxx & Xxxxxxxx
Xxxxx 0000, X.X. Xxx 00
XXXXXXX XX X0X 0X0
Attention: X. Xxxxxx
---------------------
Telecopy No.: (000) 000-0000
17
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(ii) If to HKB:
Hongkong Bank of Canada
Xxxxx 000
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Attention: X. Xxxxx
--------------------
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxx, Xxxxxx
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
XXXXXXXXX XX X0X 0X0
Attention: X. Xxxxxx
---------------------
Telecopy No.: (000) 000-0000
(iii) If to FUR:
First Union Real Estate Equity and Mortgage
Investments
00 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000-0000
Attention: Senior Vice President
General Counsel and Secretary
-----------------------------------------
Telecopy No.: (000) 000-0000
with copies to:
Fasken, Xxxxxxxx, Xxxxxxx
Xxxxx 0000, X.X. Xxx 00
Xxxxxxx Dominion Xxxx Xxxxx
Xxxxxxx-Xxxxxxxx Xxxxxx
XXXXXXX XX X0X 0X0
Attention: X. Xxxxxx
---------------------
Telecopy No.: (000) 000-0000
18
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- and to -
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: X. Xxxxxxxx
-----------------------
Telecopy No.: (000) 000-0000
(b) any such notice or other communication so delivered or transmitted shall be
deemed to have been given and received on the day on which it was delivered
personally or by reputable overnight courier or transmitted by facsimile
(or, if such day is not a business day, on the next following business
day); and
(c) any party may at any time change its address for service from time to time
by giving notice to the other parties in accordance with this Section 8.1.
9.2 ASSIGNMENT AND ENFORCEABILITY - This Agreement shall be binding upon and
enforceable by the parties and their respective successors and permitted
assigns. No party may assign any of its rights or benefits under this Agreement
or delegate any of its duties or obligations under this Agreement to any person
except as expressly permitted hereby. BT and HKB may assign all or any part of
their rights under this Agreement to any assignee to which their respective
Assigned Interests are transferred in accordance with Section 11.8 of the
Amended and Restated Credit Agreement.
9.3 TIME OF THE ESSENCE - Time shall be of the essence of this Agreement.
9.4 AMENDMENTS AND WAIVER - This Agreement may be amended by instrument in
writing executed by FUR, BT and HKB and not in any other manner. The waiver of
any covenant or agreement made in favour of any party may be effected only by
instrument in writing executed by such party and no failure to exercise any
right or remedy or any delay in doing so, and no partial exercise of any such
right or remedy shall be construed as a waiver thereof, and no waiver in any one
instance shall be construed as a waiver in any subsequent or other instance
unless the instrument in writing effecting the same expressly so provides.
9.5 COUNTERPARTS - This Agreement may be executed in counterparts, each of which
shall constitute an original and all of which taken together shall constitute
one and the same instrument. Delivery of this Agreement may be effected by
facsimile transmission.
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9.6 TERMINATION - This Agreement shall terminate only:
(a) by agreement in writing made by FUR, BT and HKB;
(b) automatically at such time (but without prejudice to the rights of the
parties relating to any defaults hereunder existing at such time) as all of
the Assigned Interest at any time held by BT and HKB shall have been
purchased by FUR pursuant to the exercise of the Put Right and the Purchase
Price in respect of all such Assigned Interest shall have been paid and
satisfied in full as provided for herein including, without limitation, in
Section 4.2 hereof; or
(c) on prepayment or payment in full of the Aggregate Accommodations
Outstanding.
9.7 RESTRICTION ON LIABILITY - Notwithstanding anything herein to the contrary
contained, this Agreement is made and executed on behalf of FUR, a business
trust organized under the laws of the State of Ohio, by its officers on behalf
of the trustees thereof, and none of the trustees or any additional or successor
trustee hereafter appointed, or any beneficiary, officer, employee or agent of
FUR shall have any liability in his personal or individual capacity but instead,
all parties shall look solely to the property and assets of FUR (including,
without limitation, those assets subject to the Security Trust Indenture) for
satisfaction of claims of any nature arising under or in connection with this
Agreement.
20
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IN WITNESS WHEREOF this Agreement has been executed by the parties.
BT BANK OF CANADA
PER: /S/ Authorized Signer
-------------------------
HONGKONG BANK OF CANADA
PER: /S/ Authorized Signer
-------------------------
FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
PER: /S/ Authorized Signer
-------------------------
PER: /S/ Authorized Signer
-------------------------
21
SCHEDULE "A"
FORM OF ASSIGNMENT AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
Assignment and Assumption Agreement dated as of ______________, 19__ made
among ___________, (the "Assignor"), a Lender under the Amended and Restated
Credit Agreement referred to and defined hereafter, Imperial Parking Limited
(the "Borrower") and First Union Real Estate Equity and Mortgage Investments
(the "Assignee"), a business trust existing under the laws of the State of Ohio.
WHEREAS pursuant to an amended and restated credit agreement dated as of
November 13, 1996 (as amended, supplemented and restated from time to time, the
"Amended and Restated Credit Agreement") among the Borrower, BT Bank of Canada
("BT"), as agent (the "Agent") and the financial institutions specified therein
(the "Lenders"), the Lenders have provided certain credit facilities to the
Borrower;
WHEREAS pursuant to an ancillary agreement dated as of April 17, 1997 (as
amended, supplemented and restated from time to time, the "Ancillary
Agreement"), among BT, HongKong Bank of Canada ("HKB") and the Assignee, the
parties agreed that BT and HKB have the right to require the Assignee to
purchase the Assigned Interest of each of BT and HKB under certain terms and
conditions as set out therein;
AND WHEREAS the Assignor has agreed to assign and sell to the Assignee its
right, title and interest in the Assigned Interest and the Assignee has agreed
to accept and purchase the Assigned Interest and to assume all liabilities and
obligations of the Assignor in respect of the Assigned Interest;
NOW THEREFORE, in consideration of the foregoing premises, the sum of
$10.00 in lawful money of Canada now paid by the Assignor to the Assignee and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. Terms defined in the Ancillary Agreement which
appear herein without definition shall have the meanings ascribed thereto in the
Ancillary Agreement.
SECTION 2. CONVEYANCE OF INTEREST IN ASSIGNED INTEREST. The Assignor hereby
assigns, sells, conveys and transfers to the Assignee its Assigned Interest.
22
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SECTION 3. ASSUMPTION. The Assignee hereby accepts and assumes the Assigned
Interest by payment to the Assignor of $_______ and the Assignee hereby agrees
to be bound by the terms and conditions of the Amended and Restated Credit
Agreement as if it was the Assignor and acknowledges and expressly assumes in
the name, place and stead of the Assignor all obligations and liabilities
attaching to the Assigned Interest and agrees to perform the terms, conditions
and agreements on its part to be performed as Assignor in respect thereof under
the Amended and Restated Credit Agreement.
SECTION 4. RELEASE BY THE BORROWER. The Borrower hereby acknowledges the
release of the Assignor from all obligations and liabilities attaching to the
Assigned Interest and acknowledges the assumption of all such liabilities and
obligations by the Assignee.
SECTION 5. RECOGNITION AS LENDER. The parties hereto acknowledge that the
Assignee is, by virtue of compliance with the provisions of Section 11.8 of the
Amended and Restated Credit Agreement, as of and from the date hereof, a Lender
under and as defined in the Amended and Restated Credit Agreement.
SECTION 6. GOVERNING LAW. This assignment and assumption agreement shall be
governed by and construed in accordance with the laws of the Province of Ontario
and of Canada applicable therein and shall be treated in all respects as an
Ontario contract.
SECTION 7. ENUREMENT. This assignment and assumption agreement shall enure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
SECTION 8. COUNTERPARTS. This assignment and assumption agreement may be
executed in counterparts, each of which shall be deemed an original and which,
taken together, shall constitute one and the same instrument.
23
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IN WITNESS WHEREOF the parties have executed this assignment and assumption
agreement under the hands of their proper officers duly authorized in that
behalf as of the date first above written.
[ASSIGNOR]
Per:
------------------------------------
Authorized Signing Officer
FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
Per:
------------------------------------
Authorized Signing Officer
IMPERIAL PARKING LIMITED
Per:
------------------------------------
Authorized Signing Officer
