US$145,000,000
CREDIT AGREEMENT
Dated as of July 23, 1998
among
XXXXXXX PAPERS LTD.
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INDUSTRIES CASCADES INC.
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CASCADES INDUSTRIES, INC.
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THE OTHER RESTRICTED SUBSIDIARIES
PARTIES HERETO FROM TIME TO TIME
as Borrowers
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THE FINANCIAL INSTITUTIONS NAMED
ON THE SIGNATURE PAGES HERETO
as Lenders
with
ROYAL BANK OF CANADA
as Arranger and as Agent
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS .....................................................2
Section 1.1 Definitions.....................................................2
Section 1.2 Headings and Table of Contents.................................28
Section 1.3 References.....................................................28
Section 1.4 Rules of Interpretation........................................28
Section 1.5 Accounting Terms and Computations..............................29
Section 1.6 Time ..........................................................29
ARTICLE II - REPRESENTATIONS AND WARRANTIES.................................29
Section 2.1 Representations and Warranties of the Borrowers................29
2.1.1 Existence of the Credit Parties.........................29
2.1.2 Credit Parties and Subsidiaries and No Change
of Control...........................................29
2.1.3 Authorization...........................................29
2.1.4 Compliance..............................................30
2.1.5 Enforceability..........................................30
2.1.6 Litigation..............................................30
2.1.7 No Default or Event of Default..........................30
2.1.8 Financial Statements....................................31
2.1.9 No Required Filing......................................31
2.1.10 Governmental Approvals..................................31
2.1.11 Ownership of Property; Liens............................31
2.1.12 Chief Executive Offices or Head Offices and
Places of Business...................................32
2.1.13 Labour Matters..........................................32
2.1.14 Taxes...................................................32
2.1.15 Accuracy of Information.................................32
2.1.16 No Omissions............................................33
2.1.17 No Stamp Tax............................................33
2.1.18 Intellectual Property...................................33
2.1.19 Canadian Benefit and Pension Plans......................33
2.1.20 ERISA...................................................34
2.1.21 Environmental Matters...................................34
2.1.22 Investment Company Act of 1940 of the United States.....35
2.1.23 Competition and Anti-trust Laws.........................36
2.1.24 Material Contracts......................................36
2.1.25 Insurance...............................................36
2.1.26 Solvency................................................36
2.1.27 Pari Passu..............................................36
Section 2.2 Materiality and Survival of Warranties.........................36
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ARTICLE III - THE CREDIT FACILITIES.........................................37
Section 3.1 Obligations of the Lenders.....................................37
Section 3.2 Designation and Removal of Additional Borrowers................37
3.2.1 Designation.............................................37
3.2.2 Effective Date of Designation...........................38
3.2.3 Removal of Additional Borrower..........................38
Section 3.3 The Revolving Facility.........................................39
3.3.1 The Canadian Borrowers..................................39
3.3.2 The US Borrowers........................................39
Section 3.4 The Term Facility..............................................39
3.4.1 The Canadian Borrowers..................................39
3.4.2 The US Borrowers........................................39
Section 3.5 The Overdraft and L/C Facility.................................39
3.5.1 The Canadian Overdraft and L/C Facility.................40
3.5.2 The US Overdraft and L/C Facility.......................40
Section 3.6 Purposes of Advances...........................................40
Section 3.7 Manner of Facility.............................................40
Section 3.8 Mandatory Repayment of Borrowings under Term Facilities........41
3.8.1 Mandatory Repayment of all Borrowings on
Maturity Date........................................41
3.8.2 Automatic Reductions and Mandatory Repayments
of the Term Facility.................................41
Section 3.9 Optional Repayment or Prepayment and Cancellation
of Credit Facilities........................................42
3.9.1 Voluntary Payments......................................42
3.9.2 Cancellation and Reduction of the Revolving
Facility, the Term Facility or the
Overdraft and L/C Facilities.........................42
3.9.3 Exceptions and Limitations..............................43
Section 3.10 Other Mandatory Reductions and Cancellation of
Credit Facilities...........................................43
Section 3.11 Conversion Option..............................................44
3.11.1 Manner of Conversion....................................44
3.11.2 Conditions of Conversion................................44
3.11.3 Acknowledgements........................................45
Section 3.12 Deposit of Proceeds of Loans and Discounted Proceeds...........45
Section 3.13 Currency and Other Adjustments.................................45
Section 3.14 Reliance on Oral Instructions..................................46
Section 3.15 Borrowings and Repayments Proportional to Commitments..........46
ARTICLE IV - PAYMENT OF INTEREST AND FEES...................................46
Section 4.1 Payment of Interest............................................46
4.1.1 Interest on Prime Rate Loans............................47
4.1.2 Interest on US Base Rate Loans..........................47
4.1.3 Interest on Base Rate Loans.............................47
4.1.4 Interest on Libor Loans.................................48
Section 4.2 Acceptance Fee.................................................48
Section 4.3 L/C Fee........................................................48
Section 4.4 Standby Fees...................................................48
Section 4.5 Agent's Fees...................................................49
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Section 4.6 Applicable Margin and Fee Rate Matrix..........................49
Section 4.7 Interest on Overdue Amounts....................................50
4.7.1 Overdue Principal or Interest...........................50
4.7.2 Other Amounts...........................................50
4.7.3 Payment.................................................50
Section 4.8 Computation of Interest for Interest Act (Canada) Purposes.....51
4.8.1 Nominal Rate of Interest................................51
4.8.2 Interest Act (Canada) Disclosure........................51
ARTICLE V - CONDITIONS APPLICABLE TO LIBOR LOANS............................51
Section 5.1 Selection of Libor Interest Periods............................51
5.1.1 Amount and Availability.................................51
5.1.2 Selection of Libor Interest Period......................51
5.1.3 Deemed Conversion.......................................52
Section 5.2 Alternate Basis of Borrowing...................................52
ARTICLE VI - CONDITIONS APPLICABLE TO LETTERS OF CREDIT.....................53
Section 6.1 Letters of Credit Issued by an Overdraft and L/C Lender........53
Section 6.2 Procedure for Issuance of Letters of Credit....................54
Section 6.3 Fees, Commissions and Other Charges............................55
Section 6.4 Reimbursement Obligation of the Borrowers......................55
Section 6.5 Obligations Absolute...........................................56
Section 6.6 Drawings under Letters of Credit...............................57
ARTICLE VII - CONDITIONS APPLICABLE TO BANKERS' ACCEPTANCES.................57
Section 7.1 Bankers' Acceptances...........................................57
Section 7.2 Conditions Applicable to Bankers' Acceptances..................57
7.2.1 Notice by Borrower......................................57
7.2.2 Procedures for the Issue of Bankers' Acceptances........58
7.2.3 Delivery by Bankers' Acceptances and Power of
Attorney for their Execution..........................59
7.2.4 Execution of Bankers' Acceptances.......................59
7.2.5 Procedures relating to the Maturity and Face
Amount of all Bankers' Acceptances....................60
7.2.6 Acceptance Fee..........................................61
7.2.7 Alternate Basis of Borrowing............................61
7.2.8 Waiver of Claim.........................................61
7.2.9 Agent to Furnish Details of Borrowings to Lenders.......61
7.2.10 Advance to be made through Agent........................62
7.2.11 Payment by Lender on Maturity...........................62
Section 7.3 BA Equivalent Loans by Non-BA Lenders..........................62
Section 7.4 Special Conditions Applicable to Non-BA Lenders................62
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ARTICLE VIII - PAYMENT, TAXES, INCREASED COSTS, EVIDENCE OF
INDEBTEDNESS AND TIMING OF MATURITIES......................64
Section 8.1 Place of Payment of Principal, Interest and Charges............64
Section 8.2 Payment to Agent is Deemed Payment to Lenders..................64
Section 8.3 Account Debit Authorization....................................64
Section 8.4 Application of Payments........................................65
8.4.1 Order of Application....................................65
8.4.2 Event of Default........................................65
8.4.3 Sharing.................................................65
Section 8.5 Manner of Payment and Taxes....................................66
8.5.1 No set-off; no withholding..............................66
8.5.2 Increased Rate of Interest..............................66
8.5.3 Tax Credit..............................................66
8.5.4 Survival of Obligations.................................67
Section 8.6 Increased Costs and Payment of Portion.........................67
8.6.1 Increased Costs.........................................67
8.6.2 Payment in Portion......................................68
Section 8.7 Illegality.....................................................69
Section 8.8 Timing of Maturities...........................................69
Section 8.9 Evidence of Indebtedness.......................................70
ARTICLE IX - GUARANTEE OF XXXXXXX AND SUBSIDIARY GUARANTEES.................71
Section 9.1 Guarantee of Xxxxxxx...........................................71
Section 9.2 Subsidiary Guarantees..........................................72
Section 9.3 Designation and Redesignation of Restricted Subsidiaries.......73
ARTICLE X - PREDISBURSEMENT CONDITIONS......................................74
Section 10.1 Predisbursement Conditions.....................................74
10.1.1 Conditions Precedent to Initial Borrowing...............74
10.1.2 Conditions Precedent to Borrowings from an
Overdraft and L/C Lender.............................76
10.1.3 Conditions Precedent to each Borrowing..................76
10.1.4 Conditions Precedent to Borrowings for Acquisitions.....76
Section 10.2 Waiver of Conditions Precedent.................................77
ARTICLE XI - COVENANTS OF THE BORROWER......................................77
Section 11.1 Affirmative Covenants of the Borrower..........................77
11.1.1 Payment Covenant........................................77
11.1.2 Corporate Existence.....................................77
11.1.3 Conduct of Business.....................................77
11.1.4 Compliance with Laws....................................78
11.1.5 Prompt Payment of Indebtedness..........................78
11.1.6 Insurance...............................................78
11.1.7 Financial Statements and Information....................79
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11.1.8 Change in Auditors......................................80
11.1.9 Contracts...............................................80
11.1.10 Notice of Default and Other Events...................81
11.1.11 Notice of Breach of Permit...........................81
11.1.12 Notice of Litigation.................................81
11.1.13 Access...............................................81
11.1.14 Reliance.............................................81
11.1.15 Grant of Subsidiary Guarantees.......................82
11.1.16 Cash Flow From Restricted Subsidiaries...............82
11.1.17 Intellectual Property................................82
11.1.18 Treasury Contracts...................................82
11.1.19 Supplemental Disclosure..............................82
11.1.20 Transactions with Affiliates.........................82
11.1.21 Canadian Benefit and Pension Plans and ERISA.........83
11.1.22 Environmental Matters................................83
11.1.23 Environmental Audit Reports..........................83
11.1.24 Remedial Actions in the Event of
Environmental Damage..............................83
11.1.25 Agent's Right to Enter Onto the Property.............84
11.1.26 Keeping of Books.....................................84
11.1.27 Maintenance of Properties, Etc.......................84
11.1.28 Millennium Compliance................................84
11.1.29 Use of Funds.........................................85
11.1.30 Registration of Lien Discharges......................85
11.1.31 Notification of Certain Events.......................85
11.1.32 Financial Ratios.....................................85
Section 11.2 Negative Covenants of the Borrower........................85
11.2.1 Negative Pledge.........................................85
11.2.2 Sale of Assets..........................................86
11.2.3 Investments in Other Persons............................87
11.2.4 Indebtedness for Borrowed Money of the
Restricted Subsidiaries...............................87
11.2.5 No Modification to Corporate Structure..................87
11.2.6 No Acquisition of Unrelated Business....................87
11.2.7 Distributions...........................................87
11.2.8 Unauthorized Uses of the Credit Facilities..............88
11.2.9 No Change in Nature of Business or in
Use of Properties. ..................................88
11.2.10 No Impairment of Upstreaming.........................88
11.2.11 Financial Year.......................................88
11.2.12 Accounting Changes...................................88
ARTICLE XII - REIMBURSEMENT OF EXPENSES AND INDEMNITY.......................89
Section 12.1 Reimbursement of Expenses......................................89
Section 12.2 Indemnity......................................................90
Section 12.3 Consultation with Borrower.....................................91
Section 12.4 Survival of Indemnification Obligations........................92
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ARTICLE XIII - OTHER TAXES .................................................92
Section 13.1 Other Taxes....................................................92
Section 13.2 Survival of Obligations........................................92
ARTICLE XIV - EVENTS OF DEFAULT.............................................92
Section 14.1 Events of Default..............................................92
14.1.1 Failure to Pay..........................................92
14.1.2 Breach of Financial Ratios..............................92
14.1.3 Other Breaches..........................................93
14.1.4 Bankruptcy..............................................93
14.1.5 Seizure.................................................94
14.1.6 Judgment................................................94
14.1.7 Invalidity or Unenforceability..........................94
14.1.8 Cross-Default...........................................94
14.1.9 Treasury Contracts......................................94
14.1.10 Ceasing to carry on business........................94
14.1.11 Representations and Warranties......................95
14.1.12 Change of Control...................................95
14.1.13 Subsidiary Guarantee................................95
14.1.14 ERISA Event.........................................95
14.1.15 ERISA Withdrawal Liability..........................95
14.1.16 Environmental Liability in Excess of Cdn$20,000,000.96
14.1.17 Material Adverse Change.............................96
14.1.18 Governmental Actions................................96
14.1.19 Change of Law.......................................96
Section 14.2 Acceleration..............................................96
Section 14.3 Notices...................................................97
ARTICLE XV - REMEDIES 97
Section 15.1 Remedies Cumulative............................................97
ARTICLE XVI - WAIVER OF DEFAULT.............................................98
Section 16.1 Waiver of Default..............................................98
ARTICLE XVII - THE AGENT AND THE LENDERS....................................98
Section 17.1 Authorization of Agent.........................................98
Section 17.2 Notification of Borrowings, Repayments, Etc....................99
Section 17.3 Details of Borrowings..........................................99
Section 17.4 Remittance of Amounts Received from the Borrowers.............100
Section 17.5 Assumption as to Payments.....................................100
17.5.1 Assumed Payment from Borrowers.........................100
17.5.2 Assumed Payment from Lender............................100
Section 17.6 Change in Circumstances, Illegality, Increased Costs, Etc.....101
Section 17.7 Notice of Event of Default....................................101
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Section 17.8 Pro Rata Treatment of Advances and Borrowings.................101
17.8.1 Adjustments to Loan and Repayments:....................101
17.8.2 Adjustments to Bankers Acceptances:....................102
17.8.3 Borrowers' Agreement:..................................102
Section 17.9 Adjustments among Lenders after Acceleration..................102
17.9.1 Adjustment within a Credit Facility:...................102
17.9.2 Adjustments between Credit Facilities:.................102
17.9.3 Application of Adjustments:............................103
17.9.4 Borrowers' Acknowledgement:............................103
Section 17.10 Sharing among the Lenders.....................................103
Section 17.11 Cash Collateral Accounts......................................103
Section 17.12 Instructions from Lenders.....................................104
17.12.1 Waivers, Amendments, Etc...........................104
17.12.2 Notices of Defaults................................105
Section 17.13 Reliance on Writings and Legal Advice.........................106
Section 17.14 Costs and Expenses............................................106
Section 17.15 Authority of Agent to Act.....................................106
Section 17.16 Disclaimer....................................................107
Section 17.17 Indemnification...............................................107
Section 17.18 Acknowledgement of Lenders....................................108
Section 17.19 Agent's Duty to Deliver Documents.............................108
Section 17.20 Other Transactions............................................108
Section 17.21 No Preference.................................................108
Section 17.22 Submission of Information.....................................109
Section 17.23 Sharing of Information Concerning this Agreement..............109
Section 17.24 No Association among Lenders..................................109
Section 17.25 Successor Agent...............................................109
Section 17.26 Change of Address.............................................110
Section 17.27 Replacement of Schedule II Reference Banks....................110
Section 17.28 Replacement of Libor Reference Banks..........................110
Section 17.29 Amendment of this Article XVII................................110
ARTICLE XVIII - SUCCESSORS AND ASSIGNS.....................................111
Section 18.1 Benefit and Burden of this Agreement..........................111
Section 18.2 The Borrowers.................................................111
Section 18.3 Assignment and Participation..................................111
Section 18.4 Limitation....................................................112
Section 18.5 Acceptance of Bankers' Acceptances by Participants............112
Section 18.6 Disclosure....................................................112
Section 18.7 Expenses and Fee..............................................112
ARTICLE XIX - COMPENSATION ................................................113
Section 19.1 Set-off, Compensation.........................................113
ARTICLE XX - JUDGMENT CURRENCY ............................................114
Section 20.1 Judgment Currency.............................................114
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ARTICLE XXI - GOVERNING LAW ...............................................114
Section 21.1 Governing Law.................................................114
ARTICLE XXII - NOTICE .....................................................114
Section 22.1 Address for Notice............................................114
Section 22.2 Notice .......................................................115
ARTICLE XXIII - MISCELLANEOUS .............................................115
Section 23.1 Severability..................................................115
Section 23.2 Interest Limitation...........................................115
Section 23.3 Survival of Representations and Undertakings..................115
Section 23.4 Whole Agreement...............................................116
Section 23.5 Amendments....................................................116
Section 23.6 Counterparts..................................................116
Section 23.7 Further Assurances............................................116
Section 23.8 Risks of Superior Force.......................................116
Section 23.9 Good Faith and Fair Consideration.............................116
Section 23.10 Term of Agreement.............................................117
Section 23.11 Formal Date...................................................117
Section 23.12 Language......................................................117
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SCHEDULES
SCHEDULE "A" Lenders' Addresses and Commitments
SCHEDULE "B" Adopting Instrument
(Sections 1.1 and 3.2.1)
SCHEDULE "C" Form of Bankers' Acceptance
(Section 1.1)
SCHEDULE "D" Discount Note
(Section 1.1.)
SCHEDULE "E" Permitted Encumbrances
(Section 1.1)
SCHEDULE "F" Subsidiary Guarantee
(Section 1.1)
SCHEDULE "G" List of Credit Parties and Subsidiaries and Places of
Business Sections 2.1.2 and 2.1.12)
SCHEDULE "H" Environmental Matters
(Section 2.1.21)
SCHEDULE "I" Competition and Anti-Trust Laws: Certain Proceedings
(Section 2.1.23)
SCHEDULE "J" Designation of Additional Borrower
(Section 3.2.1)
SCHEDULE "K" Notice of Borrowing
(Sections 3.7, 3.11, 5.1.2 or 7.2.5)
SCHEDULE "L" Notice of Borrowing by way of Letter of Credit
(Sections 3.7 and 6.2)
SCHEDULE "M" Notice of Repayment, Prepayment or Cancellation
(Section 3.9)
SCHEDULE "N" Certificate of Compliance
(Section 10.1.1.8 and 11.1.7(c))
SCHEDULE "O" Certain Permitted Sales of Assets
(Section 11.2.2(c))
SCHEDULE "P" Transfer Undertaking
(Section 18.3)
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THIS CREDIT AGREEMENT dated as of the 23rd day of July, 1998 is made
AMONG XXXXXXX PAPERS LTD., a corporation incorporated under the laws of
Canada and having its principal and registered office in Candiac,
Province of Quebec ("XXXXXXX" or, sometimes, a "BORROWER"),
AND INDUSTRIES CASCADES INC., a wholly-owned Subsidiary of Xxxxxxx
incorporated under the laws of the Province of Quebec and having
its principal and head office at Kingsey Falls, Province of
Quebec ("ICI" or, sometimes, a "BORROWER" or a "RESTRICTED
SUBSIDIARY"),
AND CASCADES INDUSTRIES, INC., a wholly-owned Subsidiary of Xxxxxxx
incorporated under the laws of the State of North Carolina,
U.S.A. and having its principal and registered office in the
State of North Carolina, U.S.A. ("CII" or, sometimes, a
"BORROWER" or a "RESTRICTED SUBSIDIARY"),
AND EACH OTHER RESTRICTED SUBSIDIARY which may from time to time
become an "ADDITIONAL BORROWER" under this Agreement (Xxxxxxx,
ICI, CII and such other Restricted Subsidiaries, as well as their
respective successors and permitted assigns, being herein
collectively called the "BORROWERS"),
AND EACH OF THE FINANCIAL INSTITUTIONS NAMED AS LENDERS ON THE
SIGNATURE PAGES HERETO (individually, a "LENDER" and
collectively, the "LENDERS"),
AND ROYAL BANK OF CANADA, a Canadian chartered bank having its head
office in Montreal, Province of Quebec, in its capacity as agent
for the Lenders (in such capacity, or any successor in such
capacity, the "AGENT").
WHEREAS Xxxxxxx has requested the Lenders, individually, and not solidarily or
jointly and severally, to make Credit Facilities available to the Borrowers of
up to US$145,000,000 or the Equivalent Amount thereof in Canadian Dollars; and
WHEREAS the Lenders have agreed to provide their respective Commitments to the
Borrowers, subject to the terms, conditions and limitations set forth in this
Agreement;
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THEREFORE, in consideration of the premises, the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 - DEFINITIONS
In this Agreement and the Schedules, as well as in all notices pursuant to this
Agreement, unless something in the subject matter or context is inconsistent
therewith, the following words and phrases shall have the following meanings:
"ACCEPTANCE FEE" means the fee payable at the time of the acceptance of Bankers'
Acceptances (including the issue to a Non-BA Lender of a Discount Note)
established by multiplying the face amount of such Bankers' Acceptances by the
applicable Acceptance Rate (expressed as a decimal) and by multiplying the
product so obtained by a fraction having a numerator equal to the number of days
in the term of such Bankers' Acceptances and a denominator of 365;
"ACCEPTANCE RATE" means, for the purpose of calculating the Acceptance Fee, the
percentage rate per annum determined in accordance with the provisions of
Section 4.6 and by reference to the appropriate tier applicable to column (4) on
the matrix set forth in Section 4.6;
"ACQUISITION" means a take-over bid or offer to acquire all or a substantial
portion of the Capital Stock of a Person, an acquisition of all or a substantial
portion of the assets of a Person, or any Investment in any Person which is not
a Subsidiary of Xxxxxxx and as a result of which Investment (A) such Person
would become a Subsidiary of Xxxxxxx, or (B) subject to restrictions applicable
to such a transaction contained in this Agreement, such Person would be merged
or amalgamated with Xxxxxxx or any of its Subsidiaries;
"ACT OF BANKRUPTCY" has the meaning set forth in Section 14.1.4;
"ADDITIONAL BORROWER" has the meaning set forth in Section 3.2.1;
"ADDITIONAL COMPENSATION" has the meaning set forth in Section 8.6.1;
"ADJUSTED LIBOR" means, for any Libor Interest Period, a rate of interest per
annum equal to:
(a) with respect to a Libor Loan made or to be made by a Lender which is
not subject to the regulations issued from time to time by the Board of
Governors of the US Federal Reserve System in the United States of
America (or any successor) in respect of the said Libor Loan: Libor for
such Libor Interest Period, and
(b) with respect to a Libor Loan made or to be made by a Lender which is
subject to the regulations issued from time to time by the Board of
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Governors of the US Federal Reserve System in the United States of
America (or any successor) in respect of the said Libor Loan: the rate
of interest obtained by dividing (I) Libor for such Libor Loan during
the relevant Libor Interest Period by (II) a percentage equal to 100%
minus the Libor Rate Reserve Percentage in effect from time to time
during such Libor Interest Period;
"ADOPTING INSTRUMENT" means an adopting instrument (A) which is executed by each
Additional Borrower at the time it becomes a Borrower hereunder, (B) to which
each other Restricted Subsidiary intervenes so as to confirm that its own
Subsidiary Guarantee applies to Borrowings and other liabilities hereunder of
such Additional Borrower and (C) accepted by the Agent, in substantially the
form set forth in SCHEDULE "B";
"ADVANCE" means the disbursement of funds to the Borrower pursuant to Section
3.7;
"AFFECTED BORROWING" has the meaning set forth in Section 8.7;
"AFFECTED LENDER" has the meanings set forth in Sections 5.2 and 8.7;
"AFFECTED LOAN" has the meanings set forth in Sections 5.2 and 8.6.2;
"AFFILIATE" means with respect to any Person, any other Person which, directly
or indirectly, controls or is controlled by, or is under common control with,
such Person, and for the purposes of this definition, "CONTROL" (including, with
correlative meanings, the terms "CONTROLLED BY" and "UNDER COMMON CONTROL WITH")
means the power, directly or indirectly to direct or cause the direction of the
management and policies of any Person, whether through the ownership of shares
or by contract or otherwise; and without restricting the above, one Person shall
be deemed to be affiliated with another Person if one of them is the Subsidiary
of the other or both are Subsidiaries of the same Person, and if two Persons are
affiliated with the same Person at the same time, they are each deemed to be
affiliated with each other;
"AGENT" means Royal or a successor agent appointed in replacement thereof
pursuant to Section 17.25;
"AGENT'S ACCOUNT FOR PAYMENTS" means:
(a) for all payments in US Dollars from a US Lender or a US Borrower, the
following account maintained by the Agent, to which payments and
transfers are to be effected as follows:
Chase Manhattan Bank, New York, USA
ABA 021-000021
For account Royal Bank of Canada, New York
A/C #920-1033363
For further credit to A/C #2187243, RBC Loan Syndications
Ref.: Xxxxxxx Papers Ltd.
and
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(b) for all payments in US Dollars from a Canadian Lender or a Canadian
Borrower, the following account maintained by the Agent, to which
payments and transfers are to be effected as follows:
Chase Manhattan Bank, New York, USA
Swift Code: CHASSUS33
Swift Address: XXXXXXX0
Favour: /00002-408-919-9
RBC Loan Syndications
Toronto, Ontario
Ref.: Xxxxxxx Papers Ltd.
and
(c) for all payments in Canadian Dollars, the following account
maintained by the Agent, to which payments and transfers are to be
effected as follows:
Royal Bank of Canada, Toronto
Swift Address: XXXXXXX0
Favour: /00002-266-760-8
RBC Loan Syndications
Toronto, Ontario
Ref.: Xxxxxxx Papers Ltd.
or such other place(s) or account(s) as may be agreed upon by the Agent and the
Borrowers from time to time and notified to the Lenders;
"AGENT'S BRANCH OF ACCOUNT" means the office or branch of the Agent set forth
opposite the name of the Agent on the signature pages of this Agreement, or any
other office or branch of the Agent in Canada, as may be agreed upon by the
Agent and the Borrowers from time to time and notified to the other Lenders;
"AGGREGATE COMMITMENT" means the aggregate of the Revolving Facility Total
Commitment, the Term Facility Total Commitment and the Overdraft and L/C
Commitments;
"AGREEMENT" means this credit agreement, including the Schedules, as the same
may be amended, modified, supplemented or restated from time to time;
"ANNUAL BUSINESS PLAN" means the annual Consolidated business plan of Xxxxxxx as
approved by the board of directors of Xxxxxxx, which business plan:
(a) shall be presented by Subsidiary, division or operating unit (each
operating unit to be reported separately and on a Consolidated basis)
and shall include income statements, cash flow statements, balance
sheets and the underlying principal assumptions,
(b) shall be prepared on a quarterly basis,
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(c) shall contain the calculations relating to the determination of
all financial covenants and ratios set out in this Agreement, and
(d) shall include proposed capital expenditures and Distributions for such
period;
"APPLICABLE LAW" means, in respect of any Person, property, transaction or
event, all present or future applicable laws, statutes, regulations, treaties,
judgments and decrees and (whether or not having the force of law) all
applicable official directives, rules, guidelines, orders and policies of any
federal, provincial, state, regional, municipal or local governmental or
regulatory or administrative bodies having authority over any of the parties
hereto and all applicable orders and decrees of courts and arbitrators;
"APPLICABLE MARGIN" means the percentage rate per annum determined in accordance
with the provisions of Section 4.6 and by reference to the appropriate tier and
the appropriate column, among columns (3) and (4), on the matrix set forth in
Section 4.6;
"ARRANGER" means Royal in its capacity as arranger of the Credit Facilities;
"ASSIGNEE" has the meaning set forth in Section 18.3(b);
"ASSIGNING LENDER" has the meaning set forth in Section 18.3(b);
"AUDITORS" means:
(a) the present auditors (and any successor firms) of Xxxxxxx and any firm
of chartered accountants associated and affiliated therewith, if any,
in Canada and in the United States, as the case may be, for the purpose
of certification of its financial statements, or
(b) another independent firm or other independent firms of chartered
accountants duly appointed as auditors of Xxxxxxx and acceptable to the
Agent;
"BA EQUIVALENT LOAN" means a loan or advance to a Borrower made by a Non-BA
Lender and evidenced by a Discount Note;
"BANKERS' ACCEPTANCE" means a non-interest bearing xxxx of exchange
substantially to the effect of SCHEDULE "C" denominated in Canadian Dollars,
drawn and endorsed by a Canadian Borrower and accepted by a Lender pursuant to
this Agreement, PROVIDED that with respect to a Non-BA Lender, it shall mean a
Discount Note issued to its order;
"BASE RATE" in effect on any one day, means the rate of interest per annum that
is the greater of (A) the rate of interest determined by Royal in the City of
New York, N.Y., U.S.A. in its sole discretion as its US prime commercial lending
rate for such day, and (b) the annual rate of interest equal to the sum of the
Federal Funds Effective Rate then in effect PLUS 1/2 of 1% per annum, in each
case as adjusted from time to time without notice to the Borrowers;
"BASE RATE LOAN" or "BASE RATE LOANS" means at any given time, the Loan, or any
portion thereof, which a US Borrower has elected, pursuant to Section 3.7 or
3.11, to denominate in US Dollars, or any other amount which, pursuant to the
- 14 -
terms of this Agreement, has been deemed to be converted to a Loan denominated
in US Dollars, and on which the relevant Borrower must pay interest on the basis
of the Base Rate in accordance with Section 4.1.3;
"BORROWERS" means Xxxxxxx, ICI, CII and the Additional Borrowers and "BORROWER"
means any one of them;
"BORROWER'S ACCOUNT" means an account or accounts of a Borrower maintained with
the Agent at the appropriate Agent's Branch of Account and, in the case of the
Overdraft and L/C Facility, an account or accounts of a Borrower maintained with
an Overdraft and L/C Lender at the appropriate Branch of Account of such
Overdraft and L/C Lender;
"BORROWING" means a utilization, and "BORROWINGS" means the aggregate of the
utilizations, at the relevant time by a Borrower of the Credit Facilities by way
of Loans, Letters of Credit or Bankers' Acceptances; the total amount of
"Borrowings" outstanding at any time is the aggregate amount of all Loans
outstanding at that time plus the aggregate amount of all L/C Available Amounts
at that time plus the aggregate face amount of all Bankers' Acceptances
outstanding hereunder at that time;
"BRANCH OF ACCOUNT" means:
(a) in respect of dealings or matters relating to a US Borrower, the US
Lending Office of the Related US Lender of Paired Lenders,
(b) in respect of dealings or matters relating to a Canadian Borrower, the
Canadian Lending Office of the Related Canadian Lender of Paired
Lenders, PROVIDED THAT with respect to Comerica Bank, it shall mean its
office set forth in SCHEDULE "A" until such time as Comerica Bank shall
have transferred part of its rights and obligations hereunder to a
Related Canadian Lender as contemplated by Section 3.1,
(c) in respect of dealings or matters relating to the US Overdraft and L/C
Facility, the US Lending Office of the US Overdraft and L/C Lender, and
(d) in respect of dealings or matters relating to the Canadian Overdraft
and L/C Facility, the Canadian Lending Office of Royal;
"BUSINESS DAY" means any day other than Saturday, Sunday and any other day which
is a legal holiday or a day on which commercial banks in Montreal, province of
Quebec or Toronto, province of Ontario (and in the case of dealings in US
Dollars, in the City of New York, N.Y., U.S.A.) are required by law or by local
proclamation to close, and in respect of a Libor Loan, means a day which is also
a day on which dealings in US Dollar deposits may be carried on by and between
banks in the London interbank eurodollar market;
"CANADIAN BENEFIT PLAN" means any employee benefit plan maintained or
contributed to by a Credit Party that is not a pension plan accepted for
registration under the ITA or other applicable pension benefits or tax laws of
Canada or a province or territory thereof including, without limitation, all
profit-sharing, savings, supplemental retirement, retiring allowance, severance,
deferred compensation, welfare, bonus, supplementary unemployment benefit plans
or arrangements and all life, health, dental and disability plans and
- 15 -
arrangements in which the employees or former employees of any Credit Party
employed in Canada participate or are eligible to participate, but excluding all
stock option or stock purchase plans;
"CANADIAN BORROWERS" means Xxxxxxx, ICI and any other Borrower which is
incorporated in Canada and has its principal place of business in Canada;
"CANADIAN DOLLAR", "CANADIAN DOLLARS" and the symbol "CDN$" each means lawful
currency of Canada;
"CANADIAN LENDER" means a Lender which is not a non-resident of Canada for
purposes of the ITA, PROVIDED THAT it shall also mean Comerica Bank until such
time as the latter shall have transferred part of its rights and obligations
hereunder to a Related Canadian Lender as contemplated by Section 3.1;
"CANADIAN LENDING OFFICE", as to the Related Canadian Lender of a set of Paired
Lenders, the office or branch in Canada specified as the "Canadian Lending
Office" of such Lender on SCHEDULE "A", or such other office or branch in Canada
as may be designated by such Lender by written notice to Xxxxxxx, the other
Canadian Borrower(s) and the Agent;
"CANADIAN OVERDRAFT AND L/C FACILITY" means the overdraft and L/C facility made
available by Royal to the Canadian Borrowers pursuant to Section 3.5.1;
"CANADIAN PENSION PLAN" means any plan, program, arrangement or understanding
that is a pension plan for the purpose of any applicable pension benefits or tax
laws of Canada or a province or territory thereof (whether or not registered
under any such laws) which is maintained, administered or contributed to by (or
to which there is or may be an obligation to contribute by) a Credit Party, in
respect of any person's employment in Canada or a province or territory thereof
with such Credit Party, all related funding agreements and all related
agreements, arrangement and understandings in respect of, or related to, any
benefits to be provided thereunder or the effect thereof on any other
compensation or remuneration of any employee;
"CAPEX" means, as to any Person for any period, the aggregate of expenditures
made by such Person or any of its Subsidiaries in respect of the purchase or
other acquisition of any assets which are not designated as current assets under
GAAP, for the purpose of maintaining such Person's or any of such Subsidiaries'
assets at existing levels of operational efficiency and which would or should in
accordance with GAAP be set forth as capital expenditures on a Consolidated
statement of cash flows of such Person;
"CAPITAL LEASE" means, with respect to a Person, any lease or other arrangement
relating to property or assets which would be required to be accounted for as a
capital lease obligation on a balance sheet of such Person if such balance sheet
were prepared in accordance with GAAP; the amount of any Capital Lease at any
date shall be the amount of the obligation in respect thereof which would be
included within such balance sheet;
"CAPITAL STOCK" means any and all shares or other equivalents (however
designated) of capital stock of a corporation, any and all equivalent or similar
- 16 -
ownership interests in a Person (other than a corporation) and any and all
warrants or options or other arrangement to purchase any of the foregoing;
"CASH FLOW FROM A SUBSIDIARY", "CASHFLOW FROM SUBSIDIARIES" and similar
expressions mean, in respect of a Subsidiary of a Person or in respect of all
Subsidiaries of a Person, Distributions by such Subsidiary or by all such
Subsidiaries, as the case may be;
"CDOR RATE" means, on any day, the rate per annum which is the rate determined
by the Agent as being the arithmetic average (rounded to the nearest
one-thousandth of 1%, with five ten-thousandths of 1% being rounded upwards) of
the rates applicable to Canadian Dollar bankers' acceptances for the appropriate
term displayed and identified on the "Reuters Screen CDOR Page" (as defined in
the International Swaps and Derivatives Association, Inc. definitions, as
modified and amended from time to time) at approximately 10:00 a.m. on such day,
or if such day is not a Business Day then on the immediately preceding Business
Day (as adjusted by the Agent after 10:00 a.m. to reflect any error in a posted
rate of interest or in the posted average annual rate of interest); PROVIDED,
however, if such rates do not appear on the Reuters Screen CDOR Page as
contemplated, then the CDOR Rate on any day shall be calculated as the
arithmetic average of the discount rates applicable to Canadian Dollar bankers'
acceptances for the appropriate term of Royal and of two other Schedule I Banks
(as selected by the Agent) quoted to the Agent at approximately 10:00 a.m. on
such day, or if such day is not a Business Day, then on the immediately
preceding Business Day; and if the Agent is unable to obtain quotes for the
above-mentioned rate from two other Schedule I Banks on the days and at the
times described above, the "CDOR RATE" shall be such other rate or rates as the
Agent and the Borrowers may agree;
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 of the United States, as amended from time to time;
"CERCLIS" means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the US Environmental Protection
Agency;
"CHANGE OF CONTROL", in respect of Xxxxxxx, means that a Person (other than
Cascades Inc.) becomes the beneficial owner of more than 50% of the total voting
power of Xxxxxxx and/or Cascades Inc. ceases to have the right to elect a
majority of the board of directors of Xxxxxxx;
"COMMITMENT" means, with respect to a Lender or any Paired Lenders at any time,
the aggregate or, as the context may require, any one of such Lender's or Paired
Lenders' Revolving Commitment, Term Commitment and, to the extent applicable,
Overdraft and L/C Commitment, all as set forth in SCHEDULE "A";
"COMMITMENT PERIOD" means the period from and including the date all conditions
precedent set forth in Section 10.1.1 have been met and ending on the Maturity
Date or such earlier date on which the Revolving Facility Total Commitment, the
Term Facility Total Commitment or an Overdraft and L/C Commitment (as the case
may be) shall terminate and be reduced to zero in accordance with the provisions
of this Agreement;
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"COMPUTER EQUIPMENT" means the computer equipment and embedded systems currently
owned or used by a Credit Party, including, without limitation, all ancillary
and communication equipment connected to it;
"COMPUTER SOFTWARE" means all computer software owned or used by a Credit Party
including, without limitation, all operating systems software comprised in the
Computer Equipment and all applications software and all other software owned or
used by a Credit Party or which a Credit Party is entitled to have or to use by
virtue of its interest in the Computer Equipment or in software owned or used by
it;
"COMPUTER SYSTEMS" means the Computer Equipment and the Computer Software,
collectively;
"CONSOLIDATED" means produced by aggregating the relevant financial statements
or accounts of the Subsidiaries of a Person on a line-by-line basis (i.e.:
adding together corresponding items of assets, liabilities, revenues and
expenses) with the relevant financial statements or account of such Person,
eliminating inter-company balances and transactions and providing for any
minority interest in Subsidiaries, all in accordance with GAAP; PROVIDED THAT
wherever in this Agreement reference is made to a "MODIFIED CONSOLIDATED BASIS",
it shall mean that the consolidation is to include only Xxxxxxx and its
Restricted Subsidiaries;
"CONTINGENT LIABILITIES" of any Person means, without duplication, all
contingent liabilities included in the financial statements (including
footnotes) of such Person in accordance with GAAP, and including (without
limitation) all obligations under Guarantees and obligations in respect of
interest rate, foreign exchange or commodity price hedging arrangements, but
specifically EXCLUDING any obligation to pay interest on any Indebtedness and
any endorsements of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business;
"CONVERSION DATE" means a Business Day notified by a Borrower to the Agent
pursuant to Section 3.11 as being a date on which such Borrower has elected to
convert a Borrowing already outstanding hereunder into another basis of
Borrowing; or if a Borrower is deemed to have converted a Borrowing into another
basis of Borrowing hereunder pursuant to any of Section 5.1.3, 5.2, 6.4, 7.2.5,
7.2.7 or 8.7, it shall mean the day on which such deemed conversion occurs;
"COUNSEL" means, with regard to the Agent or a Lender, a barrister or solicitor
or firm of barristers or solicitors retained or employed by the Agent or such
Lender, as the case may be, and with regard to a Credit Party, a barrister or
solicitor or firm of barristers or solicitors retained or employed by such
Credit Party and acceptable to the Agent;
"CREDIT FACILITIES" means, collectively, the Revolving Facility, the Term
Facility and the Overdraft and L/C Facility, and "CREDIT FACILITY" means any one
of them;
"CREDIT PARTIES" means, collectively, the Borrowers and the Restricted
Subsidiaries and "CREDIT PARTY" means any one of them;
- 18 -
"DEFAULT" means any event or circumstance which constitutes an Event of Default
or which, with the giving of notice, the making of any determination or the
lapse of time or any combination thereof, would, unless cured or waived, become
an Event of Default;
"DEPOSIT" has the meaning set forth in Section 19.1;
"DISCOUNT" with respect to any issue of Bankers' Acceptances with the same
maturity date, means the amount determined by the Agent by which the face value
of such Bankers' Acceptances exceeds the Discounted Proceeds of such Bankers'
Acceptances;
"DISCOUNT NOTE" means a non-interest bearing promissory note of a Canadian
Borrower denominated in Canadian Dollars, issued by such Borrower to a Non-BA
Lender, substantially in the form of SCHEDULE "D";
"DISCOUNT RATE" means, with respect to an issue of Bankers' Acceptances with the
same maturity date:
(a) in the case of a Lender which is a Schedule I Bank, the CDOR Rate on
the date of issue and acceptance of such Bankers' Acceptances, and
(b) in the case of a Lender which is a Schedule II Bank or a Non-BA Lender,
the rate determined by the Agent as being the arithmetic average
(rounded to the nearest one-thousandth of 1%, with five ten-thousandths
of 1% being rounded upwards) of the actual discount rates, calculated
on the basis of a year of 365 days, of the Schedule II Reference Banks
established in accordance with their normal practices at or about 10:00
a.m. on the date of issue and acceptance of such Bankers' Acceptances,
for bankers' acceptances (having a comparable face value and an
identical maturity date to the face value and maturity date of the
Bankers' Acceptances forming part of such issue) to be respectively
accepted by each Schedule II Reference Bank PROVIDED THAT such rate
shall not exceed the actual discount rate applicable to the Bankers'
Acceptances forming part of such issue accepted by the Agent (in its
capacity as Lender) PLUS 1/10 of 1% per annum; ----
"DISCOUNTED PROCEEDS" means, in respect of any Bankers' Acceptance to be
accepted by a Canadian Lender on any day (including Discount Notes issued to a
Non-BA Lender in lieu thereof pursuant to this Agreement), an amount (rounded to
the nearest whole cent, and with one-half of one cent being rounded up)
calculated by the Agent on such day by multiplying:
(a) the face amount of such Bankers' Acceptance, by
(b) the price, where the price is determined by dividing one by the sum of
one plus the product of:
(i) the Discount Rate (expressed as a decimal), and
(ii) a fraction, the numerator of which is the number of days in
the term of such Bankers' Acceptance and the denominator of
- 19 -
which is 365, with the price as so determined being rounded up
or down to the fifth decimal place and .000005 being rounded
up;
"DISTRIBUTION" means:
(a) any declaration, payment, setting aside for payment, or distribution of
any dividends or return of capital to holders of the Capital Stock of a
Person, and any purchase, redemption, reduction, repayment or other
retirement of any shares of the Capital Stock of a Person, whether in
cash or in kind, and
(b) any payment, setting aside for payment or distribution of any
management fee, management bonus, consulting fee, salary, loan or other
payment to any director, former director, officer, shareholder, former
shareholder, or employee of a corporation, or to any Person related by
blood, adoption or marriage to any such Person or to any corporation
not dealing at arm's length (as such term is defined in the ITA or, as
the case may be, Applicable Law of the United States) with any such
Person, except to the extent that such fee, bonus, salary, loan or
other payment constitutes (I) normal remuneration payable in the
ordinary course of business of the corporation or (II) reasonable
remuneration for bona fide services provided on an arm's length basis;
"DRAWDOWN DATE" means a Business Day on which an Advance is to be made as
specified in the notices referred to in Section 3.7;
"EBITDA" means for any period, the sum of (A) net income (excluding unusual
gains or losses) of a Person for such period, PLUS (B) but only to the extent
deducted in determining such net income of such Person for such period,
provision for income taxes for, and interest, depreciation, and amortization
expenses deducted for such period, in each case determined in accordance with
GAAP for such period;
"ENVIRONMENTAL CLAIMS" means any and all material administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigations or proceedings relating in any way
to any Environmental Law or any Environmental Permit (hereafter "CLAIMS")
including without limitation:
(a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or
damages pursuant to any applicable Environmental Law, and
(b) any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in
connection with Hazardous Materials or arising from alleged injury or
threat of injury to health, safety or the environment;
"ENVIRONMENTAL LAWS" means all applicable federal, provincial, state, municipal,
local and foreign laws and regulations, ordinances, codes, policies, rules or
guidelines (having the force of law in the case of rules or guidelines) of civil
or common law now or hereinafter in effect and in each case as amended and any
judicial or administrative order, consent, decree or judgment relating to
pollution or protection of human health, Hazardous Materials or the environment
- 20 -
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata, emissions, discharges, releases or threatened
releases of Hazardous Materials, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials);
"ENVIRONMENTAL PERMIT" means any permit, approval, identification number,
license or other authorization required under any Environmental Law;
"EQUIVALENT AMOUNT" means on any given day, the amount of US Dollars into which
Canadian Dollars may be converted at the Bank of Canada's noon rate for such
currencies or the amount of Canadian Dollars into which US Dollars may be
converted at the Bank of Canada's noon rate for such currencies, PROVIDED in all
cases that the Borrowers and the Agent may agree in advance on an alternative
rate (other than the Bank of Canada's noon rate) to be used for purposes of the
foregoing;
"ERISA" means the Employee Retirement Income Security Act of 1974 of the United
States, as amended from time to time, and the regulations promulgated and
rulings issued thereunder;
"ERISA AFFILIATE" means any Person that for purposes of Title IV of ERISA is a
member of the controlled group of any Credit Party, within the meaning of
Section 414 of the Internal Revenue Code;
"ERISA EVENT" means:
(a) (i) the occurrence of a reportable event, within the meaning of
Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been
waived by the PBGC, or
(ii) the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met
with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of
ERISA is reasonably expected to occur with respect to such
Plan within the following 30 days,
(b) the application for a minimum funding waiver with respect to a Plan,
(c) the provision by the administrator of any Plan of a notice of intent to
terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including
any such notice with respect to a plan amendment referred to in Section
4041(e) of ERISA),
(d) the cessation of operations at a facility of any Credit Party or any
ERISA Affiliate in the circumstances described in Section 4062(e) of
ERISA,
(e) the withdrawal by any Credit Party or any ERISA Affiliate from a
Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA,
- 21 -
(f) the conditions for imposition of a lien under Section 302(f) of ERISA
shall have been met with respect to any Plan,
(g) the adoption of an amendment to a Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA, or
(h) the institution by the PBGC of proceedings to terminate a Plan pursuant
to Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA that constitutes grounds for the
termination of, or the appointment of a trustee to administer, such
Plan;
"EUROCURRENCY LIABILITIES" has the meaning specified in Regulation D of the
Board of Directors of the US Federal Reserve System, as in effect from time to
time;
"EVENT OF DEFAULT" means any of the events or circumstances set out in Section
14.1;
"EXISTING FACILITIES" means:
(a) in respect of Xxxxxxx:
(i) Operating Line of Credit with Royal
amount: Cdn$ 25,000,000
maturity date: none
letter of offer: August 25, 1995; and
(ii) Term Loan with Royal and Montreal Trust Company
Amount: Cdn$ 45,000,000
maturity date: September 30, 2001
credit agreement: August 25, 1995;
(b) in respect of ICI:
(i) Operating Line of Credit with Bank of Montreal
amount: Cdn$ 5,000,000
maturity date: none
letter of offer dated May 17, 1994;
(ii) Revolving Credit with La Mutuelle du Canada, Compagnie
d'assurance sur la vie
amount: Cdn$ 7,500,000
maturity: December 15, 1999
credit agreement: November 16, 1989, as amended on January 7,
1992 and December 14, 1994;
(iii) Term Loan with La Mutuelle du Canada, Compagnie d'assurance
sur la vie
amount: Cdn$ 7,500,000
maturity: December 15, 1999
credit agreement: November 16, 1989, as amended on January 7,
1992 and December 14, 1994;
- 22 -
(iv) Revolving Credit with Roynat Inc.
amount: Cdn$ 5,000,000
maturity: December 15, 1999
credit agreement: November 16, 1989, as amended on January 7,
1992 and December 14, 1994;
(v) Term Loan with Roynat Inc.
amount: Cdn$ 5,000,000
maturity: December 15, 1999
credit agreement: November 16, 1989, as amended on January 7,
1992 and December 14, 1994;
(vi) Revolving Credit with The Bank of Nova Scotia
amount: Cdn$ 2,500,000
maturity: December 15, 1999
credit agreement: November 16, 1989, as amended on January 7,
1992 and December 14, 1994; and
(vii) Term Loan with The Bank of Nova Scotia
amount: Cdn$ 2,500,000
maturity: December 15, 1999
credit agreement: November 16, 1989, as amended on January 7,
1992 and December 14, 1994;
(c) in respect of CII:
(i) Demand Line of Credit Note with Comerica Bank
amount: US$ 2,000,000
maturity: April 1, 1999
loan agreement: March 26, 1993, as amended on April 28, 1995;
and
(ii) Line of Credit Note with Comerica Bank
amount: US$ 5,000,000
maturity: April 1, 1999
loan agreement: March 26, 1993, as amended on April 28, 1995;
"EXCLUDED TAXES" means any tax on the overall net income of any Lender and any
capital or franchise tax payable by such Lender;
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per annum
equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System in the United States of
America arranged by federal funds brokers, as published for such day (or if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day in respect of such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it;
"FORMAL DATE" means the date set forth in Section 23.11;
- 23 -
"FUNDED DEBT" means, on a modified Consolidated basis for Xxxxxxx and its
Restricted Subsidiaries, the aggregate of short-term borrowings, the current
portion of long-term debt, long-term debt, Capital Lease obligations, Guarantees
or other Contingent Liabilities and all obligations for the deferred payment of
the purchase price of a property;
"GAAP" means generally accepted accounting principles in effect from time to
time in Canada, or, as the case may be, the United States of America, applicable
to the relevant person, applied in a consistent manner from period to period;
"GRANTING LENDER" has the meaning set forth in Section 18.3(a);
"GUARANTEE" of any Person means, without duplication, all guarantees,
endorsements (other than for collection or deposit in the ordinary course of
business) and other obligations (contingent or otherwise) to pay, purchase,
repurchase or otherwise acquire or become liable upon or in respect of any
Indebtedness of others, investment in others, obligations to maintain the
capital, working capital, solvency or general financial condition of others, or
indemnities of others against or the holding harmless or protection of others
from damages, losses or liabilities (including, without limitation, guarantees
or warranties given by a seller to a purchaser or by a lessor to a lessee) to
the extent such guarantees, endorsements and obligations, indemnities, holding
harmless or protection above mentioned (each a "guarantee") are incurred or made
by a Person otherwise than in the ordinary course of business of such Person;
the amount of each guarantee shall be deemed to be the amount of all
Indebtedness of the other obligor to whom the guarantee relates, unless the
guarantee is limited to a determinable amount in which case the amount of such
guarantee shall be deemed to be such determinable amount;
"HAZARDOUS MATERIALS" means:
(a) any petroleum or petroleum products, radioactive materials, asbestos in
any form that is or could become friable, urea formaldehyde foam
insulation, transformers or other equipment that contains dielectric
fluid containing levels of polychlorinated biphenyls, and radon gas,
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances", "hazardous waste", "hazardous
materials", "extremely hazardous waste", "restricted hazardous waste",
"toxic substances", "toxic pollutants", "contaminants", or
"pollutants", or words of similar import, under any applicable
Environmental Law, and
(c) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority;
"HOSTILE ACQUISITION" means an Acquisition or a proposed Acquisition by a
Borrower or any of its Subsidiaries in respect of which the board of directors
of the target company or management of the target person (if the target is not a
corporation) has not recommended acceptance of such Acquisition;
- 24 -
"INDEBTEDNESS" of a Person means, without duplication for borrowed money:
(a) all debts and liabilities of such Person for borrowed money,
(b) all Capital Leases,
(c) all debts and liabilities secured by any charge, hypothec, lien,
encumbrance on or other security interest in or mortgage, assignment,
pledge or hypothecation of property or assets owned or acquired by such
Person even though such Person has not assumed or become liable for the
debts and liabilities secured thereby,
(d) all debts and liabilities of such Person representing the deferred
acquisition cost of property, assets or services created or arising
under any conditional sale agreement or other title retention agreement
even though the rights and remedies of the seller under such agreement
in the event of default are limited to repossession or sale of property
or assets covered thereby,
(e) all debts and liabilities of such Person under any bankers' or trade
acceptance credit facility or any standby or commercial letter of
credit facility,
(f) all obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments,
(g) all obligations of such Person to purchase, redeem, retire, decrease or
otherwise make any payment in respect of any Capital Stock of or other
ownership or profit interest in such Person or any other Person,
valued, in the case of redeemable preferred stock, at the greater of
its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends,
(h) all obligations of such Person in respect of interest rate, foreign
exchange or commodity price hedging arrangements,
(i) all obligations of such Person for production payments from property
operated by or on behalf of such Person and other similar arrangements
with respect to natural resources, and
(j) all Guarantees and other Contingent Liabilities;
"INDEMNITEES" has the meaning set forth in Section 12.2;
"INSUFFICIENCY" means, with respect to any Plan, the amount, if any, of its
unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA;
"INTEREST COVERAGE RATIO" means, for any period, the ratio of:
(a) EBITDA of a Person LESS Capex, in each case for such period,
to
(b) Interest Expense of such Person for such Period;
"INTEREST DATE" means the 20th day of each month;
- 25 -
"INTEREST DETERMINATION DATE" means with respect to a Libor Loan, the date which
is two Business Days prior to the first day of the Libor Interest Period
applicable to such Libor Loan;
"INTEREST EXPENSE" means, for any period for any Person, the aggregate cost,
whether capitalized or expensed, of obtaining advances of credit during such
period including, INTER ALIA, interest charges, the interest component of
Capital Leases, and discounts and fees payable in respect of bankers'
acceptances, including accrued and unpaid interest, fees and charges, BUT
DEDUCTING THEREFROM the interest income and the amortization of deferred
financing costs for the period;
"INTEREST PAYMENT DATE" means with respect to a Prime Rate Loan, a US Base Rate
Loan and a Base Rate Loan, each Interest Date or if such Interest Date is not a
Business Day, the immediately following Business Day;
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986 of the United
States, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"INVESTMENT" in any Person means any loan or advance to such Person, any
purchase or other acquisition (through conversion or otherwise) of any Capital
Stock or other ownership or profit interest, obligations or other securities of
such Person, any capital contribution to such Person or any other investment in
such Person, including, without limitation, any arrangement pursuant to which
the investor incurs Indebtedness of the types referred to in paragraphs (c), (g)
or (j) of the definition of "Indebtedness" in respect of such Person;
"ITA" means the INCOME TAX ACT (Canada) and the regulations promulgated
thereunder, as amended, supplemented or re-enacted from time to time;
"JUDGMENT CONVERSION DATE" has the meaning set forth in Section 20.1;
"JUDGMENT CURRENCY" means judgment currency as defined in Section 20.1;
"L/C APPLICATION" means an application, in such form as an Overdraft and L/C
Lender may specify from time to time, requesting that Overdraft and L/C Lender
to issue a Letter of Credit, together with such indemnities, agreements,
documents, certificates and information as that Overdraft and L/C Lender may
reasonably require, all duly completed to the satisfaction of that Overdraft and
L/C Lender;
"L/C AVAILABLE AMOUNT" means with respect to a Letter of Credit outstanding
hereunder at any time, the then undrawn and unexpired amount under such Letter
of Credit;
"L/C COMMITMENT" means:
(a) in respect of Royal, a portion of Royal's Overdraft and L/C Commitment
in an aggregate principal amount not exceeding US$10,000,000 or the
Equivalent Amount in Canadian Dollars, or any combination thereof; and
- 26 -
(b) in respect of the US Overdraft and L/C Lender, a portion of the
Overdraft and L/C Commitment of the US Overdraft and L/C Lender in an
aggregate principal amount not exceeding US$5,000,000 or the Equivalent
Amount in Canadian Dollars,
in each case to the extent not cancelled, reduced or terminated pursuant to this
Agreement;
"L/C FEE" means a fee payable by the relevant Borrower with respect to the issue
of a Letter of Credit, such fee being payable in the currency in which the
Letter of Credit is denominated and calculated on the face amount of the Letter
of Credit at the applicable L/C Rate on the basis of the number of days in the
term of the Letter of Credit and a year of 365 days;
"L/C OBLIGATIONS" means, with respect to a Borrower, at any time, an amount
equal to the sum of (A) the then aggregate amount of all L/C Available Amounts
of all Letters of Credit issued for the account of that Borrower and (B) the
aggregate amount of drawings under Letters of Credit issued for the account of
that Borrower which have not been reimbursed by such Borrower under Section 6.4;
"L/C RATE" means, for the purpose of calculating the L/C Fee, the percentage
rate per annum determined in accordance with the provisions of Section 4.6 and
by reference to the appropriate tier applicable to column (4), on the matrix set
forth in Section 4.6;
"L/C REIMBURSEMENT OBLIGATION" means the obligation of a Borrower to reimburse
an Overdraft and L/C Lender under Section 6.4 for amounts drawn under Letters of
Credit and expenses of the Overdraft and L/C Lender in connection therewith;
"LENDERS" means all of the banks and other financial institutions named as
lenders in SCHEDULE "A", and their successors and assigns and "LENDER" means any
one of them;
"LENDER'S PROPORTION" means, at any time:
(a) in respect of the Revolving Facility or the Term Facility, as to any
set of Paired Lenders, the proportion borne by the Commitment of such
set of Paired Lenders under such Credit Facility to the Revolving
Facility Total Commitment or the Term Facility Total Commitment, as the
case may be, as it may be adjusted from time to time as a result of
prepayments or cancellations, or further to an assignment pursuant to
Section 18.3,
(b) in respect of the Overdraft and L/C Facility, (I) as to Royal, 100% of
the Overdraft and L/C Commitment in respect of the Canadian Overdraft
and L/C Facility and (II) as to the US Overdraft and L/C Lender, 100%
of the Overdraft and L/C Commitment in respect of the US Overdraft and
L/C Facility, and
(c) in respect of the Aggregate Commitment, as to any set of Paired
Lenders, the proportion borne by the Commitments of such set of Paired
Lenders (including, if applicable, the Overdraft and L/C Facility
Commitment of any such Lender) in respect of all Credit Facilities to
the Aggregate Commitment, as it may be adjusted from time to time as a
result of prepayments or cancellations, or further to any assignment
pursuant to Section 18.3;
- 27 -
"LETTER OF CREDIT" and "L/C" each means a standby letter of credit, a commercial
letter of credit or a letter of guarantee denominated in Canadian Dollars or US
Dollars issued from time to time by an Overdraft and L/C Lender at the request
of a Borrower and for the account of such Borrower in accordance with the terms
of this Agreement;
"LIBOR" means with respect to a Libor Loan during the relevant Libor Interest
Period:
(a) the rate per annum (expressed on the basis of a 360-day year)
determined by the Agent as being the rate shown on Telerate page 3750
(as defined in the International Swaps and Derivatives Association,
Inc. definitions, as modified and amended from time to time) as of
11:00 a.m. (London, England time) on the Interest Determination Date
for US Dollar deposits for a period comparable to such Libor Interest
Period, and if different rates are quoted for US Dollar deposits in
varying amounts, in an amount which is closest to the Agent's (in its
capacity as Lender) Lender's Proportion of such Libor Loan, or
(b) if for any reason the Telerate rates are unavailable to determine the
rate applicable to a Libor Loan, "LIBOR" for such Libor Loan during the
relevant Libor Interest Period, shall mean the rate of interest per
annum (expressed on the basis of a 360-day year) determined by the
Agent by reference to the rates quoted on the Reuters Monitor Screen,
page LIBO (or any successor source from time to time) as being the
arithmetic average (rounded upwards, if necessary, to the nearest whole
multiple of 1/16th of 1%) of the rates offered in London, England by
reference banks shown on such screen as of 11:00 a.m. (London, England
time) on the Interest Determination Date to make deposits with leading
banks in the London interbank eurodollar market in US Dollars for a
period comparable to such Libor Interest Period, and if different rates
are quoted for deposits in varying amounts, in the amount which is
closest to the Agent's (in its capacity as Lender) Lender's Proportion
of such Libor Loan, or
(c) if for any reason, neither the Telerate rates nor the Reuters Monitor
Screen rates are available in respect of the relevant Libor Interest
Period, "LIBOR" for such Libor Loan during the relevant Libor Interest
Period, shall mean the annual rate of interest (expressed on the basis
of a year of 360 days and rounded upwards, if necessary, to the nearest
whole multiple of 1/16th of 1%) determined by the Agent as being the
arithmetic average of the rates of interest at which the Libor
Reference Banks, in accordance with their normal practices, would be
prepared to offer to leading banks in the London interbank eurodollar
market for delivery on the first day of the relative Libor Interest
Period for a period equal to such Libor Interest Period based on the
number of days comprised therein, deposits in US Dollars of amounts
comparable to their respective Lender's Proportion of such Libor Loan
(and of any other Libor Loan of such Libor Reference Banks having a
Libor Interest Period of the same duration and commencing on the same
date) to be outstanding under this Agreement during such Libor Interest
Period, at or about 11:00 a.m. (London, England time) on the applicable
Interest Determination Date;
"LIBOR INTEREST DATE" means the last day of each Libor Interest Period, or if a
Borrower selects a Libor Interest Period longer than three months, it shall mean
- 28 -
the date falling every three months after the beginning of such Libor Interest
Period and on the last day of the Libor Interest Period so selected;
"LIBOR INTEREST PERIOD" means with respect to a Libor Loan, the initial period
of approximately one, two, three or six months (as selected by a Borrower and
notified to the Agent pursuant to Section 3.7 or 3.11, but always subject to
availability to each Lender, respectively) commencing on and including the
Drawdown Date or Conversion Date, as the case may be, applicable to such Libor
Loan and ending on and including the last day of such period, and, thereafter
(subject to availability to each Lender, respectively), each successive period,
if any, of approximately one, two, three or six months (as selected by such
Borrower for such Libor Loan and notified to the Agent pursuant to Section 5.1),
but in all cases expiring no later than on the Maturity Date;
"LIBOR LOAN" means, at any given time, the Loan or any portion thereof which a
Borrower has elected pursuant to Section 3.7, 3.11 or 5.1 to denominate in US
Dollars and on which such Borrower must pay interest on a Libor basis in
accordance with Section 4.1.4;
"LIBOR RATE RESERVE PERCENTAGE" for any Libor Interest Period for all Libor
Loans comprising part of the same Borrowing means the reserve percentage
applicable two Business Days before the first day of such Libor Interest Period
under regulations issued from time to time by the Board of Governors of the US
Federal Reserve System (or any successor) of the United States of America for
determining the reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for a member bank
of the US Federal Reserve System in New York City with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities (or with respect to
any other category of liabilities that includes deposits by reference to which
the interest rate on Libor Loans is determined) having a term equal to such
Libor Interest Period;
"LIBOR REFERENCE BANKS" means Royal and National Bank of Canada for a Libor Loan
made available to a Canadian Borrower, and Royal and National Bank of Canada for
a Libor Loan made available to a US Borrower and, as the case may be, any other
Lender appointed as such in replacement of any of the said Lenders pursuant to
Section 17.28;
"LIEN" means any hypothec, security interest, mortgage, pledge, prior claim,
lien, claim, charge, cession, transfer, assignment or encumbrance of whatever
kind or nature that secures the payment of any Indebtedness or liability or the
observance or performance of any obligation, including any title retention
agreement, lessor's interest under a Capital Lease or analogous instrument in,
of, or on any asset or property or the income or profits therefrom of a Person;
"LOANS" means at any given time, the aggregate of the loans made available by
the Lenders or by the Overdraft Lenders, as the case may be, to, or to the order
of, a Borrower under the Credit Facilities and "LOAN" means any one of them;
"LOAN ACCOUNT" means the account or accounts established by the Agent and each
of the Overdraft and L/C Lenders pursuant to Section 8.9;
"LOSSES" shall have the meaning set forth in Section 12.2;
- 29 -
"MAJORITY LENDERS" means a group of Lenders whose Commitments amount in the
aggregate to 51% or more of the Aggregate Commitment;
"MARGIN STOCK" has the meaning specified in Regulation U;
"MATERIAL ADVERSE CHANGE" means any event or circumstance which, in the sole
determination of the Majority Lenders, has had or would reasonably be expected
to have or result in:
(a) a material adverse change in the business, assets, property,
operations, performance, condition (financial or otherwise) or
prospects of the Borrowers on a modified Consolidated basis, or
(b) an adverse effect on the validity or enforceability of any of the
Operative Documents or the rights and remedies of the Agent and the
Lenders under any of the Operative Documents;
"MATERIAL ADVERSE EFFECT" means, when used with reference to any event or
circumstance, an event or circumstance, which, in the sole determination of the
Majority Lenders, has had or would reasonably be expected to have:
(a) a material adverse effect on the business, assets, property,
operations, performance, condition (financial or otherwise) or
prospects of the Borrowers on a modified Consolidated basis, or
(b) a material adverse effect on the ability of any of the Credit Parties,
as a group, to perform and discharge their respective obligations under
any of the Operative Documents, or
(c) an adverse effect on the validity or enforceability of any of the
Operative Documents or the rights and remedies of the Agent and the
Lenders under any of the Operative Documents;
"MATERIAL CONTRACT" means, with respect to any Person, each contract to which
such Person is a party which is material to the business, condition (financial
or otherwise), operations, performance, properties or prospects of such Person
and the absence or termination of which would have a Material Adverse Effect;
"MATURITY DATE" means the earlier of (A) the day which is 84 months after the
Formal Date and (B) the day on which the Aggregate Commitment is terminated and
reduced to zero pursuant to the terms of this Agreement;
"MILLENNIUM COMPLIANT" means that the Computer Systems are capable of the
following functions immediately before, during and after January 1, 2000:
(a) handling date information involving all and any dates before, during
and after January 1, 2000, including, accepting date input (either from
an internal or external source), providing date output and performing
date calculations in whole or in part and any date format (i.e.,
julian, gregorian, international or any other format),
- 30 -
(b) operating accurately without interruption on and in respect of any and
all dates before, during and after January 1, 2000 and without any
change in performance,
(c) responding to and processing any digit year input (either from an
internal or external source) without creating any ambiguity as to the
century, and
(d) receiving, storing, providing and communicating date output information
without creating any ambiguity as to the century;
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Credit Party or any ERISA Affiliate is making
or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions;
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that:
(a) is maintained for employees of any Credit Party or any ERISA Affiliate
and at least one Person other than such Credit Party or ERISA
Affiliates or
(b) was so maintained and in respect of which any Credit Party or ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated;
"NET FUNDED DEBT" means the aggregate of short-term borrowings, the current
portion of long-term debt, long-term debt, obligations under Capital Lease,
Guarantees, or other Contingent Liabilities and all obligations for the deferred
payment of the purchase price of property, less cash;
"NON-BA LENDER" means a Lender which is a "foreign bank" as defined in the BANK
ACT (Canada) or which cannot or does not as a matter of policy accept Bankers'
Acceptances in the form of SCHEDULE "C";
"NPL" means the National Priorities List under CERCLA;
"OPERATIVE DOCUMENTS" means this Agreement, each Subsidiary Guarantee, each
Adopting Instrument and each document, instrument or agreement entered into by
or between any Credit Party, any Lender, the Agent or any other Person in
connection with the transactions contemplated herein or therein or which is
supplemental hereto or thereto and "OPERATIVE DOCUMENT" means any of the
foregoing individually;
"OVERDRAFT AND L/C COMMITMENTS" means:
(a) Royal's obligation to make available to the Canadian Borrowers,
Borrowings of up to US$10,000,000 or the Equivalent Amount in Canadian
Dollars, or any combination thereof, and
(b) the US Overdraft and L/C Lender's obligation to make available to the
US Borrowers, Borrowings of up to US$5,000,000,
- 31 -
in each case by way of overdraft in the relevant Borrower's Account or through
Borrowings by way of Letters of Credit up to the L/C Commitment, to the extent
not cancelled, reduced or otherwise terminated as herein provided, and
"OVERDRAFT AND L/C COMMITMENT" means either of such commitments, as the context
may require;
"OVERDRAFT AND L/C FACILITY" means the collective reference to the Canadian and
L/C Overdraft Facility and the US Overdraft and L/C Facility or, as the context
may require, either of such facilities;
"OVERDRAFT AND L/C LENDER" means:
(a) Royal in the case of the Canadian Overdraft Facility, or
(b) the US Overdraft and L/C Lender in the case of the US Overdraft and L/C
Facility
and "OVERDRAFT AND L/C LENDERS" means both of them;
"PAIRED LENDERS" means a set of two Lenders consisting of a Canadian Lender and
its Related US Lender or a US Lender and its Related Canadian Lender, as
applicable, PROVIDED THAT with respect to Comerica Bank, it shall mean Comerica
Bank alone, until such time as it shall have transferred part of its rights and
obligations hereunder to a Related Canadian Lender as contemplated by Section
3.1;
"PARTICIPANT" shall have the meaning set forth in Section 18.3(a);
"PBGC" means the Pension Benefit Guaranty Corporation of the United States (or
any successor thereto);
"PERMITTED ENCUMBRANCES" means the encumbrances on assets of the Borrowers and
the other Restricted Subsidiaries listed in SCHEDULE "E";
"PERSON" or "PERSONS" has the meaning set forth in Section 1.4;
"PLAN" means a Single Employer Plan or a Multiple Employer Plan;
"PRIME RATE" in effect on any one day means the rate of interest per annum that
is the greater of:
(a) the rate of interest publicly announced by Royal from time to time as
its "prime rate", being its reference rate then in effect for
determining interest rates on commercial loans made in Canadian Dollars
in Canada by Royal, and
(b) the annual rate of interest equal to the sum of the CDOR Rate for
bankers' acceptances having a term of one month PLUS 3/4 ---- of 1%,
in each case, as adjusted from time to time without notice to the Borrowers;
"PRIME RATE LOAN" means at any given time, the Loan or any portion thereof,
which a Canadian Borrower has elected, pursuant to Section 3.7 or 3.11, to
denominate in Canadian Dollars, or any other amount which, pursuant to the terms
- 32 -
of this Agreement, has been deemed to be converted to a Loan denominated in
Canadian Dollars and on which the relevant Borrower must pay interest on the
basis of the Prime Rate in accordance with Section 4.1.1;
"PROPERTIES" has the meaning set forth in Section 2.1.21;
"PURCHASE MONEY OBLIGATIONS" means
(a) any Lien created, issued or assumed after the date of this Agreement to
secure Indebtedness not in excess of the value of the underlying
property granted as security as a part of, or issued or incurred to
provide funds to pay, the purchase price of any real or immovable
property or personal or movable property, PROVIDED that such Lien is
limited to the property so acquired and is created, issued or assumed
substantially concurrently with the acquisition of such property, and
(b) any renewal, refunding or extension of any such Lien securing
Indebtedness in a principal amount not in excess of the unpaid
principal amount of the Indebtedness secured thereby immediately prior
to such renewal, refunding or extension;
"REGULATION U" means Regulation U of the Board of Governors of the US Federal
Reserve System, as in effect from time to time;
"RELATED CANADIAN LENDER" means with respect to a US Lender, the Affiliate, if
any, of such US Lender which is a Canadian Lender;
"RELATED US LENDER" means with respect to a Canadian Lender, the Affiliate, if
any, of such Canadian Lender which is a US Lender, or the agency or branch, if
any, of such Canadian Lender located in the United States of America, which
Affiliate, agency or branch maintains or constitutes a US Lending Office where
Borrowings from a US Lender are booked and managed;
"RESPONSIBLE OFFICER" means, with respect to any Person, the president, the
chief executive officer, the chief financial officer, the director, finance, the
director, finance and administration, the treasurer, the corporate secretary or
the assistant corporate secretary or the general manager of such Person,
PROVIDED that, with respect to financial matters, it shall mean the chief
financial officer, the vice-president, finance, the director, finance, the
director, finance and administration or the treasurer of such Person;
"RESTRICTED SUBSIDIARIES" means all of those Wholly-Owned Subsidiaries of
Xxxxxxx, including at all times ICI and CII, in which Xxxxxxx may from time to
time directly or indirectly make Investments and in respect of each of which
Xxxxxxx must directly or indirectly exclusively be entitled to receive 100% of
all Cash Flow from such Subsidiaries, as designated or redesignated from time to
time pursuant to Section 9.3;
"REVOLVING COMMITMENT" means, with respect to each set of Paired Lenders, the
obligation of such Paired Lenders to make available to the Borrowers, Borrowings
under the Revolving Facility in an aggregate principal and/or face amount at any
one time outstanding (for both such Paired Lenders in the aggregate) of up to,
but not exceeding, its Lender's Proportion of the Revolving Facility Total
Commitment;
- 33 -
"REVOLVING FACILITY" means the revolving facility made available to the
Borrowers pursuant to Section 3.3;
"REVOLVING FACILITY TOTAL COMMITMENT" means US$30,000,000 or the Equivalent
Amount in Canadian Dollars, or any combination thereof, to the extent not
cancelled, reduced or otherwise terminated as herein provided;
"REVOLVING LENDERS" means the collective reference to each set of Paired Lenders
identified on SCHEDULE "A" as having a Revolving Commitment, and "REVOLVING
LENDER" means any such Paired Lender;
"ROYAL" means Royal Bank of Canada and its successors and permitted assigns;
"SCHEDULE I BANK" means any bank named on Schedule I to the BANK ACT (Canada);
"SCHEDULE II BANK" means any bank named on Schedule II to the BANK ACT (Canada);
"SCHEDULE II REFERENCE BANKS" means Bank of America Canada and Credit Lyonnais
Canada and, as the case may be, any other Lender which is a Schedule II Bank
appointed as such in replacement of one of the said Lenders pursuant to Section
17.27;
"SCHEDULES" means the schedules to this Agreement as the same may be amended,
modified, supplemented or restated from time to time;
"SINGLE EMPLOYER PLAN" means a single employer plan, as defined in Section
4001(1)(15) of ERISA, that
(a) is maintained for employees of any Credit Party or ERISA Affiliate and
no Person other than a Credit Party and its ERISA Affiliates, or
(b) was so maintained and in respect of which any Credit Party or ERISA
Affiliate could have liability under Section 4069 of ERISA in the event
such plan has been or were to be terminated;
"SOLVENT" means, when used with respect to any Person, that
(a) the aggregate of such Person's property is, at a fair valuation,
sufficient, or, if disposed of at a fairly conducted sale under legal
process, would be sufficient, to enable payment of all such Person's
obligations and liabilities (including Contingent Liabilities), due and
accruing due,
(b) such Person is able to meet its obligations generally as they become
due,
(c) such Person has not ceased paying its current obligations in the
ordinary course of business generally as they become due,
(d) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond its ability to pay as such debts and
liabilities mature,
- 34 -
(e) such person is not engaged, and is not about to engage, in business or
a transaction for which its property would constitute an unreasonably
small capital, and
(f) such Person is otherwise solvent under Applicable Law;
"STANDBY FEE" has the meaning set forth in Section 4.4;
"STANDBY FEE PAYMENT DATE" has the meaning set forth in Section 4.4;
"STANDBY FEE RATE" means, for the purpose of calculating the Standby Fee, the
percentage rate per annum determined in accordance with the provisions of
Section 4.6 and by reference to the appropriate tier applicable to column (5) on
the matrix set forth in Section 4.6;
"SUBSIDIARY" means, with respect to any Person (A) any corporation of which an
aggregate of more than 50% of the outstanding voting Capital Stock is at the
time, directly or indirectly, owned legally or beneficially, or the voting
rights as to which are held by proxy or otherwise, by such Person and/or one or
more Subsidiaries of such Person and (B) any partnership in which such Person
and/or one or more Subsidiaries of such Person shall have an interest (whether
in the form of voting or participation in profits or capital contribution) of
more than 50%;;
"SUBSIDIARY GUARANTEE" means a guarantee executed and delivered by a Restricted
Subsidiary of the Borrower, as required under this Agreement, substantially in
the form or to the effect of the relevant Part of SCHEDULE "F", as amended,
restated, supplemented or otherwise modified from time to time;
"TANGIBLE NET ASSETS" means the Consolidated assets of Perkins and its
Restricted Subsidiaries less (A) any intangible assets, including goodwill, and
(B) Investments in Unrestricted Subsidiaries;
"TANGIBLE NET WORTH" means, at a particular date, (A) the book value of the
issued and outstanding Capital Stock of a Person, PLUS (b) the amount of capital
surplus or retained earnings of such Person (or in the case of a surplus or
retained earnings deficit, MINUS the amount of such deficit), PLUS (C)
cumulative translation adjustments, LESS (D) any intangible assets, including
goodwill, LESS Investments in Unrestricted Subsidiaries;
"TAX" includes all present and future taxes, levies, imposts, stamp taxes,
duties, charges to tax, fees, deductions, withholdings and any restrictions or
conditions resulting in a charge to tax and all penalty, interest and other
payments on or in respect thereof, imposed, assessed, levied or collected under
the laws of any country or any political subdivision thereof or by any
governmental agency or body or taxing authority thereof, but does not include
Excluded Taxes;
"TERM COMMITMENT" means, with respect to each set of Paired Lenders, the
obligation of such Paired Lenders to make available to the Borrowers, Borrowings
under the Term Facility in an aggregate principal and/or face amount at any one
time outstanding (for both such Paired Lenders in the aggregate) of up to, but
not exceeding, its Lender's Proportion of the Term Facility Total Commitment;
- 35 -
"TERM FACILITY" means the revolving reducing term facility made available to the
Borrowers pursuant to Section 3.4;
"TERM FACILITY TOTAL COMMITMENT" means US$100,000,000 or the Equivalent Amount
in Canadian Dollars, or any combination thereof, as reducing pursuant to Section
3.8.2, the whole to the extent not otherwise cancelled, reduced or terminated as
herein provided;
"TERM LENDERS" means the collective reference to each set of Paired Lenders
identified on SCHEDULE "A" as having a Term Commitment, and "TERM LENDER" means
any such Paired Lender;
"TOTAL CAPITALIZATION" means the sum of Net Funded Debt and Tangible Net Worth;
"UNRESTRICTED SUBSIDIARY" means a Subsidiary of Perkins which is not a
Restricted Subsidiary;
"US BASE RATE" in effect on any one day, means the rate of interest per annum
that is the greater of (A) the rate of interest publicly announced by Royal from
time to time as its "US Base Rate", being its reference rate then in effect for
determining interest rates on commercial loans in US Dollars made in Canada by
Royal, and (B) the annual rate of interest equal to the sum of the Federal Funds
Effective Rate then in effect PLUS 1/2 of 1% per annum, in each case as adjusted
from time to time without notice to the Borrowers;
"US BASE RATE LOAN" or "US BASE RATE LOANS" means at any given time, the Loan,
or any portion thereof, which a Canadian Borrower has elected, pursuant to
Section 3.7 or 3.11, to denominate in US Dollars, or any other amount which,
pursuant to the terms of this Agreement, has been deemed to be converted to a
Loan denominated in US Dollars, and on which the relevant Borrower must pay
interest on the basis of the US Base Rate in accordance with Section 4.1.2;
"US BORROWER" means CII and any other Borrower which is incorporated in the
United States of America and has its principal place of business in the United
States of America;
"US DOLLARS", the symbol "US$", "UNITED STATES DOLLARS" or "LAWFUL MONEY OF THE
UNITED STATES" each means lawful currency of the United States of America in
same day immediately available funds, or if such funds are not available, the
form of money of the United States of America that is customarily used in the
settlement of international banking transactions on the day any payment is due
to be made hereunder;
"US LENDER" means a Lender (including Comerica Bank) which is not a Canadian
Lender and which has its Branch of Account in the United States of America;
"US LENDING OFFICE", as to the Related US Lender of a set of Paired Lenders, the
office or branch in the United States of America specified as the "US Lending
Office" of such Lender on SCHEDULE "A", or such other office or branch in the
United States of America as may be designated by such Lender by written notice
to Perkins, the US Borrowers and the Agent;
"US OVERDRAFT AND L/C FACILITY" means the overdraft and L/C facility made
available by the US Overdraft and L/C Lender to the US Borrowers pursuant to
Section 3.5.2;
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"US OVERDRAFT AND L/C LENDER" means Comerica Bank or another commercial bank
selected in replacement thereof by CII, with the consent of the Agent, and to
which the existing US Overdraft and L/C Lender shall have assigned and
transferred all its rights and obligations as Lender pursuant to Section
18.3(b);
"US SUBSIDIARY" means a Subsidiary of the Borrower incorporated pursuant to the
laws of any state of the United States of America;
"WELFARE PLAN" means a welfare plan, as defined in Section 3(1) of ERISA;
"WHOLLY-OWNED SUBSIDIARY" means, with respect to any Person, any Subsidiary all
of the outstanding Capital Stock of which is owned by such Person either
directly or indirectly through other Wholly-Owned Subsidiaries;
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of Subtitle E of
Title IV of ERISA.
SECTION 1.2 - HEADINGS AND TABLE OF CONTENTS
The headings of the Articles, Sections, Subsections or paragraphs herein and the
table of contents are inserted for convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
SECTION 1.3 - REFERENCES
Unless the context otherwise requires or unless otherwise provided, all
references to Sections, Subsections, Articles and Schedules are to Sections,
Subsections, and Articles of and Schedules to, this Agreement. The words
"HERETO", "HEREIN", "HEREOF", "HEREUNDER" and similar expressions mean and refer
to this Agreement.
SECTION 1.4 - RULES OF INTERPRETATION
In this Agreement, unless the context otherwise requires or unless otherwise
provided,
(a) the singular includes the plural and vice versa,
(b) "MONTH" means a calendar month,
(c) "PERSON" or "PERSON" includes any individual, firm, company, limited
liability company, corporation, government, governmental body or
agency, instrumentality and unincorporated body of persons,
partnership, limited partnership, association, trust or joint venture,
and
(d) "IN WRITING" or "WRITTEN" includes printing, typewriting or any
electronic means of communication capable of being legibly reproduced
at the point of reception, including telecopier, telex or telegraph,
but excluding electronic mail.
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SECTION 1.5 - ACCOUNTING TERMS AND COMPUTATIONS
Each accounting term used in this Agreement has the meaning assigned to it under
GAAP unless otherwise defined herein and reference to any balance sheet item or
income statement item means such item as computed from the applicable statement
prepared in accordance with GAAP.
All financial statements required to be delivered hereunder shall be made and
prepared in accordance with GAAP consistently applied throughout the periods
involved.
SECTION 1.6 - TIME
Except where otherwise indicated in this Agreement, any reference to a time
shall mean local time in the City of Montreal, Province of Quebec.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 - REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
Each of the Borrowers represents and warrants to the Agent and each of the
Lenders that:
2.1.1 EXISTENCE OF THE CREDIT PARTIES: each Credit Party is duly incorporated
and/or organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization, and is duly
qualified to do business in the jurisdictions in which the nature of
the business transacted by it or the character of the material
properties owned or leased by it requires such qualifications;
2.1.2 CREDIT PARTIES AND SUBSIDIARIES AND NO CHANGE OF CONTROL: SCHEDULE "G"
sets forth a complete and accurate list of all Credit Parties and their
Subsidiaries, showing as of the date hereof (as to each such Credit
Party and Subsidiary) the jurisdiction of its incorporation and the
number of outstanding shares of each class of Capital Stock thereof and
the owner of such Capital Stock; and there has been no Change of
Control of Perkins nor any change of ownership by Perkins of the
Capital Stock of ICI and CII since the date of the most recent audited
Consolidated financial statements of Perkins delivered to the Lenders;
each of ICI and CII is a Wholly-Owned Subsidiary of Perkins;
2.1.3 AUTHORIZATION: each Credit Party has due power and authority to own its
properties and to carry on its business as presently conducted; each
Credit Party has due power and authority to enter into and perform its
obligations under the Operative Documents to which it is a party, and
each Operative Document to which such Credit Party is a party has been
duly authorized by all necessary corporate action on its part;
2.1.4 COMPLIANCE: to the best of each Borrower's knowledge and belief after
due inquiry, neither the conduct of the various businesses of any
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Credit Party nor the execution and delivery of this Agreement and the
other Operative Documents by any Credit Party nor compliance with the
terms and provisions hereof or thereof will:
(a) conflict with, violate, or result in a breach of any of the
terms, conditions or provisions of any Applicable Law
(including, without limitation, the US Securities Exchange Act
of 1934 and the Racketeer Influenced and Corrupt Organizations
Chapter of the US Organized Crime Act of 1970) or regulation
(including, without limitation, Regulation X of the Bank of
Governors of the US Federal Reserve System) applicable to such
Credit Party, or any order, injunction, decree, determination
or award of any court or any governmental department, body,
commission, board, bureau, agency or instrumentality
applicable to such Credit Party in each case, in a material
manner or to a material extent,
(b) conflict with, violate, result in a breach of, or constitute a
default under, any charter or by-law provision of any Credit
Party, or of any loan agreement, loan or trust indenture,
trust deed, or any other agreement or instrument to which such
Credit Party is a party or by which it is bound, or
(c) result in the creation of a Lien upon any of the properties,
assets or revenues of any Credit Party;
2.1.5 ENFORCEABILITY: subject to the qualifications to be set forth in the
opinions of Counsel referred to in Sections 10.1.1.17 and 10.1.1.18,
each of this Agreement and the other Operative Documents has been
validly executed and delivered and constitutes a legal, valid and
binding obligation of the relevant Credit Party, enforceable in
accordance with its terms;
2.1.6 LITIGATION: there are no litigation or arbitration proceedings and
there are no legal proceedings (including without limitation insolvency
proceedings and Environmental Claims) pending or, to the best knowledge
and belief of each Borrower after due inquiry, threatened against any
Credit Party, before any court or administrative agency or tribunal of
any country or jurisdiction which, separately or in the aggregate,
could reasonably be expected to have a Material Adverse Effect or
purports to affect the legality, validity or enforceability of this
Agreement or any other Operative Document;
2.1.7 NO DEFAULT OR EVENT OF DEFAULT: no Default or Event of Default has
occurred and is continuing and no Credit Party is in default under any
other material agreement, undertaking or instrument to which it is a
party or by which it is bound and which could have a Material Adverse
Effect;
2.1.8 FINANCIAL STATEMENTS: the Consolidated audited balance sheet and the
related Consolidated audited statements of income, retained earnings
and changes in financial position of Perkins and its Subsidiaries for
the fiscal year ended December 31, 1997 and the unaudited Consolidated
quarterly financial statements of Perkins and its Subsidiaries for the
quarterly period ended March 31, 1998 heretofore furnished to the
Lenders are, in each case, complete and correct, have been prepared in
accordance with GAAP and fairly present their financial position as at
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the date thereof and for the period covered thereby; the Borrowers did
not have on December 31, 1997 any contingent obligations, liabilities
for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavourable commitment which are not
disclosed by, or reserved against, in the related balance sheet or the
notes thereto and which are material to the Consolidated financial
position of Perkins and its Subsidiaries; and at the present time
except as disclosed to the Lenders in writing, there are no material
unrealized or anticipated losses from any unfavourable commitments of
Perkins and its Subsidiaries taken as a whole; since December 31, 1997,
there has been no Material Adverse Change in the Consolidated financial
condition of Perkins and its Subsidiaries, taken as a whole, from that
set forth in the balance sheet as at that date;
2.1.9 NO REQUIRED FILING: no registration, publication, order, permit,
filing, consent, authorization, licence, decree or approval of, from or
with any Person, including any governmental authority or regulating or
administrative body, or in any public office or any other place, is
necessary in order to ensure the legality, validity, binding effect and
enforceability of any of the Operative Documents, including, without
limitation, the Bankers' Acceptances, the Letters of Credit and any
undertakings in respect of the Bankers' Acceptances or Letters of
Credit;
2.1.10 GOVERNMENTAL APPROVALS: no orders, consents, licenses, approvals,
permits, authorizations, exemptions of, from or with any authorities,
departments, branches, agencies, tribunals or commission of the
Government of Canada or any Province or territory thereof or the
Government of the United States of America or any State or territory
thereof are required in connection with the execution, delivery and
performance by any of the Credit Parties of any of the Operative
Documents to which it is a party, except to the extent that such
orders, consents, licenses, approvals, permits, authorizations or
exemptions have been obtained and evidence thereof satisfactory to the
Agent has been delivered to the Agent;
2.1.11 OWNERSHIP OF PROPERTY; LIENS:
(a) each Credit Party has good and marketable title to all of its
property, free and clear of all Liens, except Permitted
Encumbrances; and
(b) all material permits required to have been issued or
appropriate to enable the real and immovable property owned or
leased by any of the Credit Parties to be lawfully occupied
and used for all of the purposes for which they are currently
occupied and used, have been lawfully issued and are in full
force and effect;
2.1.12 CHIEF EXECUTIVE OFFICES OR HEAD OFFICES AND PLACES OF BUSINESS: the
locations of the head offices or chief executive offices, as the case
may be, principal places of business and other material offices and
places of business of each of the Credit Parties are listed in SCHEDULE
"G" and such offices and places of business listed for each Credit
Party are the sole offices and places of business of such Credit Party;
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2.1.13 LABOUR MATTERS: except as may have been disclosed in writing to the
Agent, there are no strikes or other labour disputes against any Credit
Party and pending or, to the best knowledge and belief of each Credit
Party after due inquiry, anticipated. All material amounts due from any
Credit Party on account of employee income taxes (including, without
limitation, source deductions), workers' compensation, unemployment
insurance, health and welfare insurance and other social security of
every kind, and vacation pay have been paid or accrued as a liability
on the books of the applicable Credit Party. There are no complaints or
charges against any Credit Party pending or, to the best of each
Borrower's knowledge and belief, after due inquiry, threatened to be
filed with any governmental or regulatory body or arbitrator based on,
arising out of, in connection with, or otherwise relating to the
employment or termination of employment by any Credit Party which could
have a Material Adverse Effect;
2.1.14 TAXES: each of the Credit Parties has filed when due all tax returns,
reports and statements required to be filed by it with the appropriate
governmental agency. Each of the Credit Parties has paid when due all
Taxes due and payable on or before the date hereof (other than Taxes,
the payment of which is being contested in good faith by appropriate
proceedings by the relevant Credit Party and in respect of which
adequate reserves have been made in the books of the Credit Party) and,
in the case of Taxes not due or payable on or before the date hereof,
has made adequate provision for such Taxes in its books and records in
accordance with GAAP. There are no unpaid assessments or reassessments
for any Taxes of any Credit Party in respect of which adequate
provision is not reflected in the financial statements required to be
delivered to the Agent hereunder and there are no outstanding disputes
relating to Taxes of any Credit Party in respect of which adequate
provision is not reflected in the financial statements required to be
delivered to the Agent hereunder. Each of the Credit Parties has
properly withheld or collected from its employees, customers and any
other applicable payees, and remitted to the appropriate governmental
agency, all Taxes required to be withheld or collected and remitted
under any Applicable Laws;
2.1.15 ACCURACY OF INFORMATION: all information concerning the Borrowers,
their shareholders, their Subsidiaries and the other Credit Parties
contained in the information memorandum dated June 1998 prepared in
respect of the Credit Facilities and distributed to the Lenders on June
23, 1998 (together with all other documents and annexes distributed
together herewith, the "INFORMATION MEMORANDUM"), is true and correct;
all additional written information provided by the Borrowers to the
Lenders or the Agent in respect of the Borrowers, their shareholders,
their Subsidiaries and the other Credit Parties, is true and accurate
in all material respects and the said information contains no material
misstatement of fact nor does it omit a material fact which is
necessary to make such information not misleading, and there is no fact
which the Borrowers have not disclosed in writing to the Agent which
has a Material Adverse Effect;
2.1.16 NO OMISSIONS: none of the Credit Parties has withheld from the Agent
any material information relating to the financial condition, business
or prospects of the Credit Parties which would reasonably be expected
to be material to a prospective lender contemplating a loan of the size
and nature contemplated in this Agreement;
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2.1.17 NO STAMP TAX: neither this Agreement nor any other Operative Document
is subject to any execution, stamp or similar tax;
2.1.18 INTELLECTUAL PROPERTY: each Credit Party has obtained and holds in full
force and effect all patents, trade-marks, service marks, trade names,
copyrights and other such intellectual property rights, which are
necessary for the operation of its business; none of the Credit Parties
has granted any license, permit or right to use such patents,
trade-marks, service marks, trade names, copyrights etc. to any Person
to the extent that it could have a Material Adverse Effect; to the best
knowledge and belief of the Borrowers after due inquiry, no material
product, process, method, substance, part or other material presently
sold by or employed by any Credit Party in connection with its business
infringes any patent, trade-xxxx, service xxxx, trade name, copyright,
license or other intellectual property right owned by any other Person,
and there is not pending or to the best knowledge and belief of the
Borrower after due inquiry, threatened any claim or litigation against
or affecting any Credit Party contesting its right to sell or use any
such product, process, method, substance, part or other material;
2.1.19 CANADIAN BENEFIT AND PENSION PLANS: the Canadian Pension Plans are duly
registered under the provisions of the ITA and any other Applicable
Laws and no event has occurred which is reasonably likely to cause the
loss of such registered status. The Canadian Pension Plans and the
Canadian Benefits Plans have been administered in accordance with the
ITA and all other Applicable Laws. All material obligations of each
Credit Party (including fiduciary and funding obligations) required to
be performed in connection with the Canadian Pension Plans and the
funding media therefor have been performed. No promises of benefit
improvements under the Canadian Pension Plans or the Canadian Benefit
Plans have been made except where such improvement could not have a
Material Adverse Effect. There have been no improper withdrawals or
applications of the assets of the Canadian Pension Plans or the
Canadian Benefit Plans. Each of the Canadian Pension Plans and the
Canadian Benefit Plans is fully funded and there exist no going concern
unfunded actuarial liabilities or solvency deficiencies in respect of
such plans;
2.1.20 ERISA:
(a) no ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan,
(b) as of the last annual actuarial valuation date, if any, the
funded current liability percentage, as defined in Section
302(d)(8) of ERISA, of each Plan exceeds 90% and there has
been no material adverse change in the funding status of any
such Plan since such date,
(c) Schedule "B" (Actuarial Information) to the most recent annual
report (Form 5500 Series) for each Plan, if any, copies of
which have been filed with the Internal Revenue Service of the
United States, is complete and accurate and fairly presents
the funding status of such Plan, and since the date of such
Schedule "B" there has been no material adverse change in such
funding status,
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(d) neither any Credit Party nor any ERISA Affiliate has incurred
or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan,
(e) neither any Credit Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been
terminated, within the meaning of Title IV of ERISA, and no
such Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of
Title IV of ERISA;
2.1.21 ENVIRONMENTAL MATTERS: except as set forth in SCHEDULE "H" hereto and
except for issues the aggregate cost of remedying the same would not
exceed Cdn$1,000,000, or the Equivalent Amount in US Dollars:
(a) the use of any Hazardous Materials on the real or immovable
properties owned or occupied by any Credit Party (hereinafter
for the purposes of this Section referred to as the
"PROPERTIES") and the emission, transportation or disposal of
such substances in or onto the Properties into the environment
or by or allowed by any Credit Party or, to the best knowledge
and belief of each Borrower after due inquiry, by prior
occupants of the Properties has at all times been effected in
compliance with all applicable Environmental Laws;
(b) all required Environmental Permits have been obtained or
maintained, as the case may be, in respect of the operations
of each Credit Party, including, without limitation, any
permits, certificates and registers required for air
emissions, effluent discharges, release of contaminants,
production of hazardous materials, conduct of hazardous
activities and waste disposal;
(c) the operations and activities of each Credit Party and the use
of the Properties by each Credit Party including the
construction and modification of any building or equipment on
the Properties have been effected in compliance with all
applicable Environmental Laws and Environmental Permits;
(d) no Hazardous Material has been released or spilled into the
environment from the Properties which has not been cleaned up
in conformity with all applicable Environmental Laws and to
the satisfaction of the appropriate authorities;
(e) proper procedures are used in respect of all Properties for
the handling and storage of PCB waste;
(f) procedures for spill prevention and containment as well as
leak detection testing have been or are presently being
established at all Properties;
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(g) all aboveground and underground storage tanks located on the
Properties have been installed and maintained in conformity
with all government standards and no leakage has been detected
from such tanks which has not been remedied in accordance with
all applicable Environmental Laws;
(h) there are no pending or, to the best knowledge and belief of
the Borrowers after due inquiry, threatened Environmental
Claims against any Credit Party;
(i) to the best knowledge and belief of the Borrowers after due
inquiry, the Properties incurred no environmental damage or
contamination prior to a Borrower or, as the case may be, any
other Credit Party, taking ownership or control of the
Properties;
(j) no terms of any credit or financing arrangements between any
Credit Party and any financial institution have been altered
or terminated as a result of considerations of environmental
risk linked to any of the Properties; and
(k) there are no facts, circumstances, conditions or occurrences
on any of the Properties that could reasonably be anticipated
(I) to form the basis of an Environmental Claim against any
Credit Party or any of their Properties or assets, or (II) to
cause such Properties or assets to be subject to any
restrictions on the ownership, occupancy, use or
transferability of such Properties or assets under any
applicable Environmental Law or Environmental Permit;
(l) none of the Properties is listed or proposed for listing on
the NPL or the CERCLIS or any analogous foreign, state or
local list or is adjacent to any such property;
2.1.22 INVESTMENT COMPANY ACT XX 0000 XX XXX XXXXXX XXXXXX: no Credit Party is
an "investment company", or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the INVESTMENT COMPANY ACT of 1940 of the United States of
America, as amended. Neither the making of any Advances, nor the
acceptance of any Bankers' Acceptance, nor the issuance of any Letters
of Credit, nor the application of the proceeds or repayment thereof by
any Borrower, nor the consummation of the other transactions
contemplated hereby, will violate any provision of such Act or any
rule, regulation or order of the Securities and Exchange Commission
thereunder;
2.1.23 COMPETITION AND ANTI-TRUST LAWS: except for the matters disclosed in
SCHEDULE "I" hereto, each Credit Party is in compliance with all
competition and anti-trust legislation, and the Borrower has no
indication nor reason to believe that any of its Acquisitions might be
challengeable on any competition or anti-trust grounds by Canadian, US
or other governmental authorities;
2.1.24 MATERIAL CONTRACTS: each Material Contract to which any Credit Party is
a party or is bound is in full force and effect and constitutes the
legal, valid and binding obligation of each party thereto enforceable
in accordance with its terms (subject to the same exceptions as are
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referred to in Section 2.1.5); no party thereto, including any Credit
Party, is in default in the performance of any of its obligations
thereunder nor has any such party received any notice of termination
given pursuant to the terms thereof. No provision of Applicable Law has
a Material Adverse Effect, or could reasonably be expected to have a
Material Adverse Effect;
2.1.25 INSURANCE: each Credit Party maintains insurance coverage as is
customary for companies operating in a business similar to that of the
Credit Parties, all in conformity with the requirements of Section
11.1.6, and all premiums and other sums of money payable for that
purpose have been paid;
2.1.26 SOLVENCY: as of the date hereof and at all times thereafter, each
Credit Party is and will be, individually and together with the other
Credit Parties, Solvent; and
2.1.27 PARI PASSU: the Credit Facilities rank and will at all times rank at
least PARI PASSU with all other unsecured senior debt of the Credit
Parties.
SECTION 2.2 - MATERIALITY AND SURVIVAL OF WARRANTIES
All representations and warranties of the Borrowers contained herein, and all
representations and warranties of the Credit Parties contained in any
certificate or material delivered hereunder or pursuant to any of the other
Operative Documents shall be deemed to have been relied upon by the Agent and
the Lenders notwithstanding any investigation heretofore or hereafter made by
the Agent or the Lenders or by their respective Counsel or by any other
representative of the Agent or the Lenders and all such representations and
warranties shall be deemed to be given on the date of this Agreement and, except
for the representations and warranties set forth in Section 2.1.8 (which shall
be read as if they referred to the most recent financial statements delivered by
the Borrowers to the Agent), Section 2.1.15 (to the extent the representations
therein relate to the Information Memorandum and information provided by the
Borrower prior to the Formal Date) and Section 2.1.16, on each Drawdown Date, on
each Conversion Date, on each date of issuance, extension or renewal of a Letter
of Credit and on each date of renewal of a Bankers' Acceptance or Libor Loan
hereunder, with the same effect, subject to and to the extent consistent with
the transactions contemplated hereby, as if made at and as of each such date, by
reference to the facts and circumstances then prevailing.
ARTICLE III
THE CREDIT FACILITIES
SECTION 3.1 - OBLIGATIONS OF THE LENDERS
Relying on each of the representations and warranties set out in Article II and
subject to the terms and conditions herein contained, the Lenders individually
and not jointly and severally nor as solidary obligors, agree to make their
respective Commitments available to the Borrowers. In this respect, it is
acknowledged that Paired Lenders shall have a single shared Commitment in
respect of each of the Revolving Facility and the Term Facility and,
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accordingly, (I) a Borrowing by a Canadian Borrower under the Revolving Facility
or the Term Facility will be granted only by Lenders which are Related Canadian
Lenders of Paired Lenders, (II) a Borrowing by a US Borrower under the Revolving
Facility or the Term Facility will be granted only by the Lenders which are
Related US Lenders of Paired Lenders and (III) any decision, consent or voting
hereunder on the basis of a shared Commitment of Paired Lenders may only be made
at the direction of both Paired Lenders.
Notwithstanding the foregoing and the other provisions of this Agreement,
Comerica Bank shall provide Borrowings under the Revolving Facility and the Term
Facility out of its US Lending Office to the Canadian Borrowers and the US
Borrowers until such time as Comerica Bank shall have transferred to a Related
Canadian Lender its rights and obligations in respect of Borrowings by the
Canadian Borrowers, at which time Comerica Bank and its said Related Canadian
Lender shall become Paired Lenders for the purposes of this Agreement having
shared Commitments in respect of the Revolving Facility and the Term Facility.
Neither the Agent nor any of the Lenders shall be responsible for the
obligations of any other party to this Agreement. The failure of a Lender to
make available a Borrowing in accordance with its obligations under this
Agreement shall not release any other Lender or the Borrowers from their
obligations hereunder.
SECTION 3.2 - DESIGNATION AND REMOVAL OF ADDITIONAL BORROWERS
3.2.1 DESIGNATION : the Credit Facilities are initially made available to
Xxxxxxx, ICI and CII, as initial Borrowers hereunder. However, Xxxxxxx
may at any time and from time to time, designate any other Restricted
Subsidiary incorporated in and having its operations in either Canada
or the United States of America, as an additional Borrower hereunder
(an "ADDITIONAL BORROWER"). Xxxxxxx will make such designation by
delivering to the Agent a notice to such effect substantially in the
form set forth in SCHEDULE "J", or such other form as may be acceptable
to the Agent, specifying the name, the jurisdiction of incorporation,
the head or registered office and the principal place of business and
operations of the new or existing Restricted Subsidiary so designated,
and whether it is to be a Canadian Borrower or a US Borrower, and
confirming that Xxxxxxx' guarantee set forth in Section 9.1 shall
unconditionally apply to Borrowings by such Additional Borrower, the
whole accompanied by the following documents which shall be in form and
substance satisfactory to the Agent, namely:
(a) if not already delivered to the Agent, the duly executed
Subsidiary Guarantee(s) of such Restricted Subsidiary together
with the documents and opinions contemplated by Section 9.2,
and
(b) an Adopting Instrument duly executed by such Restricted
Subsidiary (containing therein the acknowledgement of each
other Restricted Subsidiary to the effect that its Subsidiary
Guarantee applies, to the extent permitted by law, to
Borrowings and other liabilities hereunder of the said
Additional Borrower), together with certified copies of the
board of directors' resolutions and, if legally required,
by-laws granting authority to the said Restricted Subsidiary
to become a Borrower and obtain Borrowings hereunder,
accompanied by a legal opinion of such Restricted Subsidiary's
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Counsel (which opinion may form part of the opinion
contemplated by Section 9.2) as to the status of such
Restricted Subsidiary, its authority to become a Borrower and
obtain Borrowings hereunder and the due execution, delivery
and binding nature of the aforesaid Adopting Instrument;
3.2.2 EFFECTIVE DATE OF DESIGNATION : promptly on receipt of the documents
referred to in Section 3.2.1 (provided they are in form and substance
acceptable to the Agent), the Agent will confirm to Xxxxxxx, each other
Restricted Subsidiary and the Lenders (I) the designation of the
Additional Borrower as a Canadian Borrower or a US Borrower and the
identity and address thereof for purposes of notices hereunder (as set
forth in the relevant Adopting Instrument) and (II) the effective date
(established by the Agent in consultation with Xxxxxxx and the
Additional Borrower) of the designation of the Additional Borrower. As
and from the effective date set forth in the aforesaid confirmation
from the Agent, the Additional Borrower therein identified shall
thenceforth be a party hereto having all the rights and obligations of
a Borrower hereunder;
3.2.3 REMOVAL OF ADDITIONAL BORROWER : Xxxxxxx may at any time and from time
to time, upon not less than five Business Days' prior written notice to
the Agent, remove any Additional Borrower as a Borrower under this
Agreement, provided that, on the effective date of such removal, the
removed Additional Borrower shall have indefeasibly paid or repaid to
the Agent and the Lenders all amounts owing by it hereunder.
In addition, if an Additional Borrower shall cease to be a Subsidiary
of Xxxxxxx, all amounts owing hereunder by such Additional Borrower
shall then automatically become due and payable, and no further
Borrowings may be obtained by such Additional Borrower hereunder.
SECTION 3.3 - THE REVOLVING FACILITY
The Lenders hereby establish in favour of the Borrowers the Revolving Facility
which shall be available as a revolving facility up to the Maturity Date, as
follows:
3.3.1 THE CANADIAN BORROWERS : each Canadian Borrower shall be entitled from
time to time to obtain Advances, repay such Advances and re-obtain
Advances under the Revolving Facility in Canadian Dollars by way of
Prime Rate Loans or Bankers' Acceptances or in US Dollars by way of US
Base Rate Loans or Libor Loans, or any combination thereof, the whole
up to the Revolving Facility Total Commitment and subject to the terms
and conditions of this Agreement; and
3.3.2 THE US BORROWERS : each US Borrower shall be entitled from time to time
to obtain Advances, repay such Advances and re-obtain Advances under
the Revolving Facility in US Dollars by way of Base Rate Loans or Libor
Loans, the whole up to the Revolving Facility Total Commitment and
subject to the terms and conditions of this Agreement.
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SECTION 3.4 - THE TERM FACILITY
The Lenders hereby establish in favour of the Borrowers the Term Facility which
shall be available as a revolving reducing term facility up to the Maturity
Date, as follows:
3.4.1 THE CANADIAN BORROWERS: each Canadian Borrower shall be entitled from
time to time to obtain Advances, repay such Advances and re-obtain
Advances under the Term Facility, on a reducing basis as set forth in
Section 3.8.2, in Canadian Dollars by way of Prime Rate Loans or
Bankers' Acceptances or in US Dollars by way of US Base Rate Loans or
Libor Loans, or any combination thereof, up to the Term Facility Total
Commitment and subject to the terms and conditions of this Agreement;
and
3.4.2 THE US BORROWERS: each US Borrower shall be entitled from time to time
to obtain Advances, repay such Advances and re-obtain Advances under
the Term Facility in US Dollars, on a reducing basis as set forth in
Section 3.8.2, by way of Base Rate Loans or Libor Loans, or any
combination thereof, up to the Term Facility Total Commitment and
subject to the terms and conditions of this Agreement.
SECTION 3.5 - THE OVERDRAFT AND L/C FACILITY
Royal and the US Overdraft and L/C Lender hereby respectively establish in
favour of the Borrowers the Canadian Overdraft and L/C Facility and the US
Overdraft and L/C Facility which shall be available up to the Maturity Date, as
follows:
3.5.1 THE CANADIAN OVERDRAFT AND L/C FACILITY: the Canadian Overdraft and L/C
Facility is hereby made available by Royal to the Canadian Borrowers by
way of a revolving overdraft and L/C facility available to each
Canadian Borrower in Canadian Dollars by way of Prime Rate Loans or
Letters of Credit, or in US Dollars by way of US Base Rate Loans or
Letters of Credit, or any combination thereof, up to US$10,000,000 or
the Equivalent Amount in Canadian Dollars, subject to the terms and
conditions of this Agreement; and
3.5.2 THE US OVERDRAFT AND L/C FACILITY: the US Overdraft and L/C Facility is
hereby made available by the US Overdraft and L/C Lender to the US
Borrowers by way of a revolving overdraft and L/C facility available to
each US Borrower in US Dollars by way of Base Rate Loans or Letters of
Credit (subject to the provisions of Section 3.7(b)(i) relating to
eurodollar-based advances outstanding on the date hereof), or in
Canadian Dollars by way of Letters of Credit, or any combination
thereof, up to US$5,000,000, or the Equivalent Amount in Canadian
Dollars subject to the terms and conditions of this Agreement.
SECTION 3.6 - PURPOSES OF ADVANCES
The Credit Facilities shall be used by the Borrowers for general corporate and
working capital purposes, including capital expenditure financing, refinancing
of the Existing Facilities and to provide funding for Acquisitions subject
however to the provisions of Section 11.1.29 and 11.2.8.
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SECTION 3.7 - MANNER OF BORROWING
Subject to the provisions of this Agreement (and in particular Section 10) and
provided no Default or Event of Default has occurred and is continuing (without
having been cured or waived as provided herein), each Borrower may from time to
time request Borrowings from the Lenders up to the amount of the Revolving
Facility Total Commitment, Term Facility Total Commitment or relevant Overdraft
and L/C Facility Commitment, as the case may be:
(a) in the case of Advances under the Revolving Facility or the Term
Facility which must, in each instance, be in a minimum amount of
US$5,000,000 or Cdn$5,000,000, as the case may be, and whole multiples
of US$1,000,000 or Cdn$1,000,000 in excess thereof:
(i) if by way of a Prime Rate Loan, US Base Rate Loan or Base Rate
Loan or if by way of a Borrowing by way of Bankers'
Acceptances, upon giving irrevocable telephone notice to the
Agent at least by 12:00 noon on the Business Day preceding the
Drawdown Date, followed by written confirmation to the Agent on
the same day substantially in the form set forth in SCHEDULE
"K" (or such other form as the Agent may approve); and
(ii) if by way of a Libor Loan, upon giving irrevocable telephone
notice to the Agent at least by 12:00 noon on the Business Day
immediately preceding the relevant Interest Determination Date,
followed by written confirmation to the Agent on the same day
substantially in the form set forth in SCHEDULE "K" (or such
other form as the Agent may approve);
(b) in the case of Advances under the Overdraft Facility:
(i) if by way of overdraft, by creating an overdraft in the
relevant Canadian Borrower's Account maintained with Royal or
in the relevant US Borrower's Account maintained with the US
Overdraft and L/C Lender, in which case such overdraft will be
covered by an Advance from Royal or the US Overdraft and L/C
Lender, as the case may be, into the said account (X) in a
minimum amount of US$10,000 or Cdn$10,000, as the case may be,
or any multiple thereof so as to cover the overdraft in the
case of the Canadian Overdraft and L/C Facility and (Y) to the
nearest US Dollar so as to cover the overdraft in the case of
the US Overdraft and L/C Facility (PROVIDED THAT the
eurodollar-based advance granted prior ------------- to the
Formal Date by the US Overdraft and L/C Lender to CII with an
interest period ending on July 29, 1998 shall, on the date
hereof, be transferred to and constitute a Borrowing under the
US Overdraft and L/C Facility which shall continue to bear
interest on a eurodollar basis until the expiry of the said
interest period); or
(ii) if by way of the issuance of a Letter of Credit, by following
the procedure set forth in Section 6.2 and by giving notice
thereof to the relevant Overdraft and L/C Lender substantially
in the form set forth in SCHEDULE "L" (or such other form or
in such other manner as the relevant Overdraft and L/C Lender
may approve);
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and subject to the terms hereof, the relevant Lenders shall make each such
Advances available to the extent that on the relevant Drawdown Date, the
Aggregate Commitment remaining unadvanced and uncancelled hereunder and, as
appropriate, the amount remaining unadvanced and uncancelled under the Revolving
Facility Total Commitment, the Term Facility Total Commitment and/or the
Relevant Overdraft and L/C Commitment is, in each case, then sufficient to allow
for the requested Borrowing.
SECTION 3.8 - MANDATORY REPAYMENT OF BORROWINGS UNDER THE CREDIT
FACILITIES
3.8.1 MANDATORY REPAYMENT OF ALL BORROWINGS ON MATURITY DATE: all Borrowings
and other amounts outstanding under each of the Credit Facilities shall
be fully and finally paid (together with interest and fees related
thereto) on the Maturity Date, whereupon each Credit Facility shall be
cancelled and each Lender's Commitments shall automatically be reduced
to zero and be terminated;
3.8.2 AUTOMATIC REDUCTIONS AND MANDATORY REPAYMENTS OF THE TERM FACILITY: the
Term Facility Total Commitment shall automatically reduce in ten
semi-annual amounts commencing on the date falling six months following
the second anniversary of the Formal Date and thereafter on the date
falling each six months thereafter, with the first nine reductions
being each of US$7,500,000 and with a final reduction of US$32,500,000
on the Maturity Date, PROVIDED THAT if any such due date is not a
Business Day, the relevant reduction shall be made on the immediately
following Business Day, except for the Maturity Date where, in such
case, the final reduction shall be made on the Business Day immediately
preceding the Maturity Date.
Each Borrower shall make all necessary repayments of Borrowings under
the Term Facility so as to ensure that outstanding Borrowings under the
Term Facility never exceed the Term Facility Total Commitment, as
reducing in accordance with the previous paragraph of this Section.
SECTION 3.9 - OPTIONAL REPAYMENT OR PREPAYMENT AND CANCELLATION OF
CREDIT FACILITIES
3.9.1 VOLUNTARY PAYMENTS: Any Borrower may, without penalty, repay or
otherwise retire the Borrowings outstanding hereunder in full or in
part from time to time, (A) by making repayment of the Overdraft and
L/C Facility through deposit of funds in the relevant Borrower's
Account in the case of the Overdraft and L/C Facility or (B) upon
giving an irrevocable telephone notice to the Agent at least by 9:00
a.m. on the repayment date in the case of the repayment of a Prime Rate
Loan, a US Base Rate Loan or a Base Rate Loan up to a maximum amount of
US$25,000,000 or Cdn$25,000,000, as the case may be, or by 12:00 noon
on the Business Day preceding the repayment date in the case of the
repayment of other Borrowings, in each case followed by written
confirmation to the Agent on the same day substantially in the form set
forth in SCHEDULE "M" (or such other form as the Agent may approve) in
the case of the Revolving Facility or the Term Facility, PROVIDED THAT,
repayments under the Revolving Facility or the Term
Facility must in each instance, be in a minimum amount of US$5,000,000
or Cdn$5,000,000, as the case may be, and whole multiples of
US$1,000,000 or Cdn$1,000,000 in excess thereof (or the remaining
- 50 -
balance of the relevant Credit Facility). Any amount so repaid may be
re-borrowed as provided herein;
3.9.2 CANCELLATION AND REDUCTION OF THE REVOLVING FACILITY, THE TERM FACILITY
OR THE OVERDRAFT AND L/C FACILITIES: the Borrowers may, at any time,
upon Xxxxxxx giving not less than five Business Days' prior written
notice thereof to the Agent substantially in form and substance as set
forth in SCHEDULE "M", cancel and reduce without penalty the whole or
any portion of the Revolving Facility Total Commitment, Term Facility
Total Commitment or Overdraft Facility Commitment(s), in an aggregate
minimum amount of US$5,000,000 and whole multiples of US$1,000,000 in
excess thereof in the case of the Revolving Facility or Term Facility
and of US$500,000 and whole multiples of US$100,000 in excess thereof
in the case of an Overdraft and L/C Facility (or the remaining balance
of the Revolving Facility Total Commitment, Term Facility Total
Commitment or Overdraft and L/C Commitment(s)). Such notice of
cancellation with respect to any drawn portion of the Revolving
Facility Total Commitment, Term Facility Total Commitment or Overdraft
and L/C Commitment(s) shall be without effect as long as on or before
the day on which such cancellation is to take effect in accordance with
such notice (A) such drawn portion shall have been repaid or otherwise
retired in accordance herewith, and (B) the accrued interest on such
drawn portion and any applicable fees shall have been paid. The amount
by which the Revolving Facility Total Commitment, Term Facility Total
Commitment or Overdraft and L/C Commitment(s) is so reduced and
cancelled may not be reinstated hereunder and any such cancellation and
reduction shall be irrevocable and shall permanently reduce the
Aggregate Commitment and, to the extent applicable, each Lender's
Commitment in respect thereof in an amount equal to its Lender's
Proportion of the amount of the Revolving Facility Total Commitment
and/or Term Facility Total Commitment so cancelled and reduced or in an
amount equal to the amount of the Overdraft and L/C Commitment(s) so
cancelled and reduced;
3.9.3 EXCEPTIONS AND LIMITATIONS: notwithstanding the terms of Sections 3.9.1
and 3.9.2, a Borrowing outstanding:
(a) by way of Bankers' Acceptance may not be so prepaid, save for
a repayment on the maturity date of the relevant Bankers'
Acceptance, except as provided in Sections 3.13 and 8.8;
(b) by way of Libor Loan may not be so prepaid, unless such
prepayment occurs on the last day of the applicable Libor
Interest Period or, if prepayment occurs on a day other than
the last day of the applicable Libor Interest Period (for
whatever reason), unless such prepayment is made together with
the payment to the Agent (on behalf of the relevant Lenders)
of the indemnity payment required to be made under Section
12.2.5 in connection with the amount being prepaid to the
extent such indemnity has then been determined and notified to
the relevant Borrower (provided, for purposes of
clarification, that if the whole or any portion of such
indemnity payment is determined or notified subsequently, such
indemnity shall nevertheless be payable on demand as provided
herein); or
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(c) by way of Letter of Credit may not be so prepaid or retired
prior to the expiry date thereof unless (I) the Overdraft and
L/C Lender is fully released and discharged from all its
liabilities and obligations arising from such Letter of Credit
and the Overdraft and L/C Lender has received written evidence
satisfactory to it of such release and discharge, or (II) a
bank acceptable to the Overdraft and L/C Lender issues to it a
full unconditional counter-guarantee or indemnity in favour of
that Overdraft and L/C Lender acceptable to it in respect of
such Letter of Credit.
SECTION 3.10 - OTHER MANDATORY REDUCTIONS AND CANCELLATION OF CREDIT
FACILITIES
The Borrowers shall be required to reduce and cancel the Credit Facilities in
certain cases of disposition of assets as set forth in Section 11.2.2(e).
SECTION 3.11 - CONVERSION OPTION
3.11.1 MANNER OF CONVERSION: subject to the provisions of this Agreement, a
Borrower may, during the term of this Agreement, effective on any
Business Day, convert, in whole or in part, an outstanding Borrowing
under a Credit Facility (other than a Borrowing by way of a Letter of
Credit) into any other basis of Borrowing in the same currency
available under that Credit Facility, and in minimum amounts
identical to the minimum amounts required for Borrowings under
Section 3.7, upon giving to the Agent on behalf of the Lenders the
following notice in respect of the basis of Borrowing into which the
outstanding Borrowing is to be converted:
(a) in the case of a Prime Rate Loan, a US Base Rate Loan, a
Base Rate Loan or a Borrowing by way of Bankers'
Acceptances, irrevocable telephone notice at least by
12:00 noon on the Business Day preceding the Conversion
Date;
(b) in the case of a Libor Loan, irrevocable telephone notice
at least by 12:00 noon on the Business Day immediately
preceding the relevant Interest Determination Date;
in each case, followed by written confirmation to the Agent on the
same day substantially in the form set forth in SCHEDULE "K" (or such
other form as the Agent may approve);
3.11.2 CONDITIONS OF CONVERSION: a conversion under Section 3.11.1 may be
made only on condition that:
(a) no Default or Event of Default has occurred and is
continuing;
(b) a Libor Loan may be converted, in whole or in part, only on
the last day of the relevant Libor Interest Period, and
provided that if less than all such Libor Loan is converted,
then after such conversion not less than US$5,000,000 (and
multiples of US$1,000,000 in excess thereof) shall remain as
a Libor Loan;
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(c) a Borrowing by way of Bankers' Acceptances may be converted,
in whole or in part, only on the relevant maturity date of
such Bankers' Acceptances and provided that if less than all
Borrowings by way of Bankers' Acceptances are converted,
then after such conversion not less than Cdn$5,000,000 (and
multiples of Cdn$1,000,000 in excess thereof) shall remain
as Borrowings by way of Bankers' Acceptances;
(d) a conversion into a Borrowing by way of Libor Loan shall
only be made to the extent that the conditions outlined in
Section 5.2 or 8.7 shall not exist in respect thereof on the
relevant Conversion Date;
(e) a conversion into a Borrowing by way of Bankers' Acceptances
shall only be made to the extent that the conditions
outlined in Section 7.2.7 or 8.7 shall not exist in respect
thereof on the relevant Conversion Date; and
(f) on the Conversion Date, the amount of the outstanding
Borrowings (after any such conversion) would not exceed the
amount permitted to be borrowed under the relevant Credit
Facility nor the amount of the Aggregate Commitment at that
time;
3.11.3 ACKNOWLEDGEMENTS:
(a) the conversion of any Borrowing as provided in this Section
3.11 shall take place without novation and shall not be deemed
to constitute a repayment of any Borrowing hereunder nor a new
Advance of funds hereunder; and
(b) with respect to all matters of calculation and rate
determinations in this Section 3.11, the determination by the
Agent shall be final and conclusive, save in the case of
manifest error.
SECTION 3.12 - DEPOSIT OF PROCEEDS OF LOANS AND DISCOUNTED PROCEEDS
Until such time as the Agent is otherwise directed by a Borrower in writing, the
Agent shall deposit to the relevant Borrower's Account on the applicable
Drawdown Date the proceeds of each Borrowing under the Revolving Facility or the
Term Facility by way of Loans made by such Borrower on such Drawdown Date and
the Discounted Proceeds, less the Acceptance Fee, in respect of each Bankers'
Acceptance of such Borrower accepted and purchased by a Lender (or in respect of
each Discount Note of such Borrower issued to a Lender) on such Drawdown Date.
SECTION 3.13 - CURRENCY AND OTHER ADJUSTMENTS
If, on the first Business Day of any month during the term of this Agreement,
the Agent determines that as a result of a change in the exchange rate of the US
Dollar against the Canadian Dollar or for any other reason, the Equivalent
Amount in US Dollars of the total of the Borrowings outstanding in Canadian
Dollars under any of the Credit Facilities, when added to the Borrowings
outstanding in US Dollars under such Credit Facility, would exceed the maximum
available amount thereof, expressed in US Dollars, as determined on such day,
then the Borrowers shall, within three Business Days following demand by the
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Agent, repay and retire the relevant Borrowings to the extent of the amount of
any such excess (subject to the provisions of Section 12.2). In the case of a
Borrowing outstanding by way of Bankers' Acceptances, such repayment shall be
made by the payment to the Agent for the account of the Canadian Lenders of an
amount in Canadian Dollars equal to the face value of the relevant unmatured
Bankers' Acceptances, or such lesser amount as will cover the excess, and, upon
such payment, the Borrower(s) having made the payment shall be released of
its(their) liability to the Lenders in respect of such unmatured Bankers'
Acceptances to the extent of the amount so paid.
In order to allow the Agent to make the determination contemplated by the
preceding paragraph, each Overdraft and L/C Lender will notify the Agent in
writing, by 12:00 noon on the first Business Day of each month, of the total
amount of Borrowings outstanding on such day under its Overdraft and L/C
Facility.
SECTION 3.14 - RELIANCE ON ORAL INSTRUCTIONS
The Agent and each Lender shall be entitled to act upon the oral instructions of
any Person which the Agent or any Lender believes is a Person a Borrower has
identified in writing from time to time to the Agent or the Lender as being a
Person authorized by such Borrower to give instructions regarding the completion
and issuance of Bankers' Acceptances and the Drawdown or conversion of other
Borrowings and neither the Agent nor any Lender shall be responsible for any
error or omission in such instructions or in the performance thereof except in
the case of gross negligence or wilful misconduct by the Agent or that Lender or
their respective employees, representatives or agents. Any such oral
instructions so given shall be promptly confirmed in writing by the relevant
Borrower to the Agent or Lender. A Borrower may revoke the authority of such
Persons so authorized by notifying the Agent and the Lenders, in writing, which
notice shall be effective on the Business Day immediately following the date of
its actual receipt by the Agent and the Lenders. Any instructions given to any
Agent or any Lender before the day such notice becomes effective shall remain
effective for the purpose of this Agreement.
SECTION 3.15 - BORROWINGS AND REPAYMENTS PROPORTIONAL TO COMMITMENTS
Any Borrowing and any repayment under or in respect of the Revolving Facility or
the Term Facility shall be made through the Agent and, to the greatest extent
possible, shall be, as to each set of Paired Lenders, proportional to their
shared Commitment in respect of the Credit Facility which is the subject of the
relevant Borrowing, subject to the other provisions of this Agreement, including
the adjustments permitted by Section 7.2.2(b) in respect of Borrowings by way of
Bankers' Acceptances.
Any Borrowing and any repayment under or in respect of an Overdraft and L/C
Facility need not be prorated, except after acceleration pursuant to Section
14.2.
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ARTICLE IV
PAYMENT OF INTEREST AND FEES
SECTION 4.1 - PAYMENT OF INTEREST
Each Borrower covenants and agrees to pay at or before 12:00 noon on each
relevant day hereafter set forth, interest on Loans outstanding from time to
time accrued from the applicable Drawdown Date, Conversion Date or date of
renewal of such Loans until the date on which repayment in full of such Loans is
received by the Lenders, such interest being calculated at the rates per annum
(subject to the provisions of Section 4.7) determined as follows:
4.1.1 INTEREST ON PRIME RATE LOANS : each Canadian Borrower shall pay to the
Agent on behalf of the Lenders in the case of Borrowings under the
Revolving Facility or the Term Facility and to Royal in the case of
Borrowings under the Canadian Overdraft and L/C Facility, on each
outstanding Prime Rate Loan obtained by it, as evidenced by the Loan
Account, interest in Canadian Dollars for value on each Interest Date
at a rate per annum equal to the Prime Rate plus the Applicable Margin.
Each change in the fluctuating interest rate for such Prime Rate Loan
will take place concurrently with the corresponding change in the Prime
Rate. Such interest shall accrue from day to day, shall be payable
monthly in arrears on each Interest Payment Date and shall be
calculated on the daily outstanding balance of such Prime Rate Loan on
the basis of the actual number of days elapsed (including the first day
but excluding the last day of any period of time during which a Prime
Rate Loan is outstanding) in a year of 365 days;
4.1.2 INTEREST ON US BASE RATE LOANS: each Canadian Borrower shall pay to the
Agent on behalf of the Lenders in the case of Borrowings under the
Revolving Facility or the Term Facility and to Royal in the case of
Borrowings under the Canadian Overdraft and L/C Facility, on each
outstanding US Base Rate Loan obtained by it, as evidenced by the Loan
Account, interest in US Dollars for value on each Interest Date at a
rate per annum equal to the US Base Rate plus the Applicable Margin.
Each change in the fluctuating interest rate for such US Base Rate Loan
will take place concurrently with the corresponding change in the US
Base Rate. Such interest shall accrue from day to day, shall be payable
monthly in arrears on each Interest Payment Date and shall be
calculated on the daily outstanding balance of such US Base Rate Loan
on the basis of the actual number of days elapsed (including the first
day but excluding the last day of any period of time during which a US
Base Rate Loan is outstanding) in a year of 365 days;
4.1.3 INTEREST ON BASE RATE LOANS: each US Borrower shall pay to the Agent on
behalf of the Lenders in the case of Borrowings under the Revolving
Facility or the Term Facility, and to the US Overdraft and L/C Lender
in the case of the US Overdraft and L/C Facility, on each outstanding
Base Rate Loan obtained by it, as evidenced by the Loan Account,
interest in US Dollars for value on each Interest Date at a rate per
annum equal to the Base Rate plus the Applicable Margin. Each change in
the fluctuating rate of interest for such Base Rate Loan will take
place concurrently with the corresponding change in the Base Rate. Such
interest shall accrue from day to day, shall be payable monthly in
- 55 -
arrears on each Interest Payment Date and shall be calculated on the
daily outstanding balance of such Base Rate Loan on the basis of the
actual number of days elapsed (including the first day but excluding
the last day of any period of time during which a Base Rate Loan is
outstanding) in a year of 365 days; and
4.1.4 INTEREST ON LIBOR LOANS: each Borrower shall pay to the Agent on behalf
of the Lenders, on each outstanding Libor Loan, as evidenced by the
Loan Account, interest in US Dollars for value on each Libor Interest
Date applicable to such Libor Loan, at a rate per annum equal to the
Adjusted Libor plus the Applicable Margin. Such interest shall accrue
from day to day, shall be payable in arrears on each Libor Interest
Date and shall be calculated on the daily outstanding balance of such
Libor Loan on the basis of the actual number of days elapsed (including
the first day of each Libor Interest Period but excluding the last day
thereof) divided by 360 days.
Each determination by the Agent or an Overdraft and L/C Lender of the applicable
rate of interest in respect of a Borrowing pursuant to this Section 4.1 shall,
in the absence of manifest error, be final, conclusive and binding on the
Borrowers. Upon determination of the rate of interest applicable to a Libor
Loan, the Agent shall notify the relevant Borrower and each relevant Lender of
such rate.
SECTION 4.2 - ACCEPTANCE FEE
Upon acceptance of a Bankers' Acceptance by a Lender (or the issuance to a
Lender of a Discount Note in lieu thereof), the relevant Canadian Borrower shall
pay to the Agent on behalf of such Lender, the Acceptance Fee set forth in
Section 7.2.6 calculated using the applicable Acceptance Rate.
SECTION 4.3 - L/C FEE
Each relevant Borrower shall, at the times and in accordance with the
requirements set forth in Section 6.3, pay to the applicable Overdraft and L/C
Lender, the L/C Fee calculated using the applicable L/C Rate and the other
charges therein contemplated.
SECTION 4.4 - STANDBY FEES
On the last Business Day of September, December, March and June of each year and
on the Maturity Date during the period commencing on the Formal Date and ending
on the Maturity Date (each a "STANDBY FEE PAYMENT DATE"), Xxxxxxx shall pay to
the Agent for the account of the Canadian Lenders at their respective Branches
of Account in Canada (and for the account of Comerica Bank at its US Lending
Office until such time as it shall have transferred part of its rights and
obligations hereunder to a Related Canadian Lender as contemplated by Section
3.1) and to be divided among them according to their respective Lender's
Proportion of the Revolving Facility Total Commitment and Term Facility Total
Commitment and the Canadian Borrowers shall pay to the Canadian Overdraft and
L/C Lender and the US Borrowers shall pay to the US Overdraft and L/C Lender, a
non-refundable standby fee (the "STANDBY FEE") calculated for each day during
such period at a rate per annum equal to the Standby Fee Rate in effect for such
day. The Standby Fee shall be calculated on a daily basis on the undrawn portion
of the Revolving Facility Total Commitment and the Term Facility Total
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Commitment in the case of the Standby Fee payable for the account of the
Canadian Lenders and on the undrawn portion of each Overdraft and L/C Commitment
in the case of the Standby Fee payable to each of the Overdraft and L/C Lenders,
and on the basis of the actual number of days elapsed in a year of 365 or 366
days, as the case may be. Each payment of the Standby Fee shall be calculated
for the period from and including the Formal Date or the last Standby Fee
Payment Date, as the case may be, to, but not including, the next Standby Fee
Payment Date. The Standby Fee is payable in US Dollars.
SECTION 4.5 - AGENT'S FEES
Xxxxxxx covenants and agrees to pay the Agent for its own account, such fees as
may from time to time be due by it under a letter agreement made between Xxxxxxx
and the Agent.
SECTION 4.6 - APPLICABLE MARGIN AND FEE RATE MATRIX
In determining the interest rates and fees payable under Sections 4.1 to 4.4
inclusive, reference shall be made to the Funded Debt to Total Capitalization
ratio applicable as indicated on the following matrix. The Applicable Margin,
Acceptance Rate, L/C Rate and Standby Fee Rate, as the case may be, shall be
determined by reference to the appropriate tier of pricing appearing on the said
matrix.
Any change in the Applicable Margin, Acceptance Rate, L/C Rate and Standby Fee
Rate shall be calculated with retroactive effect from the first day after the
fiscal quarter for which the calculation of the Funded Debt to Total
Capitalization Ratio applies.
Notwithstanding the foregoing, and to the extent possible:
(a) in the case of a Borrowing by way of Bankers' Acceptances, (I) if such
Bankers' Acceptances have already matured at the time of a pricing
change, the adjustment to the Acceptance Fee will be made retroactively
and the relevant Borrower will be charged or credited accordingly and
(II) if such Bankers' Acceptances have not yet matured, the adjustment
to the Acceptance Fee shall be computed based on the number of days
remaining in the term of such Bankers' Acceptances from and including
the date of the change, and adjustment shall be made by increasing or
reducing, as applicable, the payment made or to be made by the relevant
Borrower on the relevant maturity date of Bankers' Acceptances by the
amount of such adjustment; and
(b) in the case of a Borrowing by way of a Libor Loan, (I) if such Libor
Loan has already matured at the time of a pricing change, the
adjustment to the interest rate will be made retroactively and the
relevant Borrower will be charged or credited accordingly and (II) if
such Libor Loan has not yet matured, any adjustment to the interest
rate shall be computed based on the number of days remaining in the
Libor Interest Period from and including the date of the change in
Applicable Margin in respect of such Libor Loan, and adjustment shall
be made by increasing or reducing, as applicable, the interest payable
on the relevant Libor Interest Date in respect of such Libor Loan by
the amount of such adjustment.
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(1) (2) (3) (4) (5)
TIER FUNDED DEBT TO TOTAL APPLICABLE MARGIN FOR APPLICABLE MARGIN FOR STANDBY FEE RATE
CAPITALIZATION RATIO PRIME RATE LOANS, US LIBOR LOANS AND
BASE RATE LOANS, ACCEPTANCE RATE,
BASE RATE LOANS L/C RATE
I <= 20% 0.0 0.50% 0.15%
II > 20% but <= 30% 0.0 0.625% 0.175%
III > 30% but <= 40% 0.0 0.75% 0.20%
IV > 40% 0.0 0.875% 0.25%
SECTION 4.7 - INTEREST ON OVERDUE AMOUNTS
4.7.1 OVERDUE PRINCIPAL OR INTEREST: (a) upon a default in the payment of
principal due under this Agreement, the defaulting Borrower shall pay
interest on all principal at a rate per annum equal to the interest
rate which would otherwise be applicable to such principal if it were
not in default, increased by 2% per annum, and (B) upon a default in
the payment of interest due under this Agreement or any of the other
Operative Documents, the defaulting Borrower shall pay interest on such
overdue interest at a rate per annum equal to the rate which would
otherwise be applicable, increased by 2% per annum.
4.7.2 OTHER AMOUNTS: at any time, upon a default in the payment of any other
amount due under this Agreement, the Borrower having failed to make the
payment shall pay interest on such overdue amount (which overdue
amount, for greater certainty, shall not include overdue principal or
interest) at a rate per annum equal to (A) if the overdue amount is
denominated in US Dollars and is owed to a Canadian Lender, the sum of
the US Base Rate in effect from time to time PLUS the Applicable Margin
for a US Base Rate Loan at such time PLUS 2% per annum (B) if the
overdue amount is denominated in US Dollars and is owed to a US Lender,
the sum of the Base Rate in effect from time to time PLUS the
Applicable Margin for a US Base Rate Loan at such time PLUS 2% per
annum and (C) if the overdue amount is denominated in Canadian Dollars,
the sum of the Prime Rate in effect from time to time PLUS the
Applicable Margin for Prime Rate Loans at such time PLUS 2% per annum.
4.7.3 PAYMENT: in each case under Sections 4.7.1 and 4.7.2, interest shall be
payable on demand and shall be calculated on a daily basis and
compounded monthly from the date such amount becomes due and payable
for so long as such amount remains unpaid and on the basis of a year of
365 days.
All interest provided for in this Agreement shall be payable both
before and after maturity, default and judgment.
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SECTION 4.8 - COMPUTATION OF INTEREST FOR INTEREST ACT (CANADA) PURPOSES
4.8.1 NOMINAL RATE OF INTEREST: unless otherwise stated, wherever in this
Agreement reference is made to a rate of interest "per annum" or a
similar expression is used, such interest shall be calculated on the
basis of a calendar year of 365 days and using the nominal rate method
of calculation, and shall not be calculated using the effective rate
method of calculation or on any other basis that gives effect to the
principle of deemed reinvestment of interest.
4.8.2 INTEREST ACT (CANADA) DISCLOSURE: for the purpose of the INTEREST ACT
(Canada) and disclosure thereunder, whenever interest to be paid
hereunder is to be calculated on the basis of a year of 360 days or any
other period of time that is less than a calendar year, the yearly rate
of interest to which the rate determined pursuant to such calculation
is equivalent is the rate so determined multiplied by the actual number
of days in the calendar year in which the same is to be ascertained and
divided by either 360 or such other period of time, as the case may be.
ARTICLE V
CONDITIONS APPLICABLE TO LIBOR LOANS
SECTION 5.1 - SELECTION OF LIBOR INTEREST PERIODS
5.1.1 AMOUNT AND AVAILABILITY: all Libor Loans shall be drawn down in US
Dollars in the minimum amounts set forth in Section 3.7 and shall be
for a Libor Interest Period as selected pursuant to Section 5.1.2,
subject to availability to each Lender, respectively.
5.1.2 SELECTION OF LIBOR INTEREST PERIOD: if a Borrower has requested a
Borrowing by way of Libor Loan pursuant to Section 3.7 or has chosen to
convert an existing Borrowing into a Libor Loan pursuant to Section
3.11, such Borrower shall, prior to the expiry of each relevant Libor
Interest Period, give notice to the Agent in accordance with the
requirements of Section 3.7 stating the selected duration (being a
duration of one, two, three or six months) of the next applicable Libor
Interest Period for such Borrowing or setting forth the intention of
the said Borrower to repay or convert such Libor Loan at the end of the
current Libor Interest Period, it being understood that:
(a) in the case of a Borrowing by way of Libor Loan which is
already outstanding, the Libor Interest Period shall commence
on and include the last day of the then current Libor Interest
Period for such Borrowing;
(b) the commencement of the chosen Libor Interest Period is
subject to availability to each relevant Lender;
(c) whenever the last day of any Libor Interest Period would
otherwise occur on a day other than a Business Day, the last
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day of such Libor Interest Period shall be extended to occur
on the next succeeding Business Day, PROVIDED HOWEVER, that,
if such extension would cause the last day of such Libor
Interest Period to occur in the next following calendar month,
the last day of such Libor Interest Period shall occur on the
immediately preceding Business Day; and
(d) whenever the first day of any Libor Interest Period occurs on
a day of an initial calendar month for which there is no
numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Libor Interest Period,
such Libor Interest Period shall end on the last Business Day
of such succeeding calendar month.
5.1.3 DEEMED CONVERSION: if, in respect of a Libor Loan which is already
outstanding, a Borrower fails to give notice as provided in Section
5.1.2, the said Borrower shall be deemed to have notified the Agent on
behalf of the relevant Lenders of its intention to convert, without
novation, the relevant Libor Loan into a US Base Rate Loan in the case
of an outstanding Libor Loan from a Canadian Lender or into a Base Rate
Loan in the case of an outstanding Libor Loan from a US Lender.
SECTION 5.2 - ALTERNATE BASIS OF BORROWING
If at any time during the term of this Agreement, a Lender determines reasonably
and in good faith (which determination shall, in the absence of manifest error,
be final, conclusive and binding upon the Borrowers) that:
(a) adequate and fair means do not exist for ascertaining the rate of
interest with respect to a Libor Loan,
(b) the cost to such Lender of making, funding or maintaining its Lender's
Proportion of a Libor Loan does not accurately reflect its effective
cost in respect thereof,
(c) the making or continuing of Libor Loans by any Lender has been made
impracticable by the occurrence of any event which materially and
adversely affects the London interbank eurodollar market, or
(d) deposits in US Dollars are not available to a Lender in the London
interbank eurodollar market in sufficient amounts in the ordinary
course of business for the applicable Libor Interest Period to make,
fund or maintain a Libor Loan during such Libor Interest Period,
then, the Agent shall, on behalf of the Lender affected by such event or
circumstance (the "AFFECTED LENDER"), notify the Borrowers of such determination
in writing with an indication of the Loans affected by such determination (each
an "AFFECTED LOAN"). For so long as the circumstances referred to in paragraphs
(a), (b), (c) or (d) above shall continue and until notice to the contrary is
given to the Borrowers by the Agent on behalf of the Affected Lender, the
Affected Lender shall not be obliged to make any further Affected Loans
available under the Credit Facilities. The principal amount of all outstanding
Affected Loans granted by the Affected Lender shall, at the expiry of the
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relevant Libor Interest Period, automatically be converted without novation into
such other form of Borrowings as the relevant Borrower may request by notice to
the Agent or failing such notice by the said Borrower, into US Base Rate Loans
in the case of an outstanding Libor Loan from a Canadian Lender or into a Base
Rate Loan in the case of an outstanding Libor Loan from a US Lender, and
thereafter, for so long as the circumstances referred to in any of paragraphs
(a) to (d) above continue, such Affected Lender shall only be obliged to extend
its Lender's Proportion of Affected Loans in such other forms of Borrowings or
in US Base Rate Loans or Base Rate Loans, as the case may be.
ARTICLE VI
CONDITIONS APPLICABLE TO LETTERS OF CREDIT
SECTION 6.1 - LETTERS OF CREDIT ISSUED BY AN OVERDRAFT AND L/C LENDER
(a) AVAILABILITY: subject to the terms and conditions of this Agreement and
each L/C Application, each Overdraft and L/C Lender agrees to make
Borrowings available under the Overdraft and L/C Facility, up to the
L/C Commitment, by the issue of Letters of Credit on any Business Day
during the Commitment Period in such form as may be approved from time
to time by the relevant Overdraft and L/C Lender; PROVIDED THAT no
Overdraft and L/C Lender shall have any obligation to issue any Letters
of Credit if the relevant Overdraft and L/C Lender, acting reasonably,
is not satisfied with the form or substance thereof or if, after giving
effect to such issuance:
(i) the aggregate L/C Obligations of the Borrowers to the relevant
Overdraft and L/C Lender would exceed the L/C Commitment, or
(ii) the aggregate amount of Borrowings outstanding under the
relevant Overdraft and L/C Facility made available by the
relevant Overdraft and L/C Lender would exceed the Commitment
of such Overdraft and L/C Lender in respect of the Overdraft
and L/C Facility;
(b) DENOMINATION AND TERM: each Letter of Credit shall:
(i) be denominated in US Dollars or Canadian Dollars, and be
issued in a face amount of not less than US$50,000 or
Cdn$50,000, or such lower amounts as the relevant Overdraft
and L/C Lender may consent to from time to time, and be either
(A) a standby letter of credit or a letter of guarantee issued
to support obligations of a Borrower, contingent or otherwise,
which are for a purpose permitted by Sections 3.6, 11.1.29 and
11.2.8, or (B) a commercial letter of credit issued in respect
of the purchase of goods or services by a Borrower or other
corporate needs in the ordinary course of business;
(ii) expire no later than the earlier of (A) the first anniversary
of its date of issuance, renewal or extension and (B) the
fifth Business Day before the Maturity Date;
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(c) APPLICATION OF UCP: each Letter of Credit other than a letter of
guarantee (whether denominated in US Dollars or Canadian Dollars) shall
be subject to the Uniform Customs and Practice for Documentary Credits
as published from time to time by the International Chamber of Commerce
and shall not contravene Applicable Law.
SECTION 6.2 - PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT
(a) ISSUANCE: a Borrower may from time to time request an Overdraft and L/C
Lender to issue a Letter of Credit under its L/C Commitment by
delivering to such Lender a notice of borrowing substantially in the
form set forth in SCHEDULE "L" and delivering an L/C Application
therefor to that Overdraft and L/C Lender at its Branch of Account.
Upon receipt of any L/C Application, the said Overdraft and L/C Lender
will process such L/C Application in accordance with its customary
procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall an Overdraft and L/C Lender be required
to issue any Letter of Credit earlier than two Business Days after
receipt of the L/C Application therefor) by issuing the original of
such Letter of Credit to the beneficiary thereof or as otherwise may be
agreed by the Overdraft and L/C Lender and the relevant Borrower;
(b) EXTENSION OR RENEWAL: a Borrower may request the extension or renewal
or other amendment of any Letter of Credit issued for its account by
giving written notice specifying the details of such request to the
relevant Overdraft and L/C Lender at its Branch of Account (at least
three Business Days (or any shorter period acceptable to the relevant
Overdraft and L/C Lender) before the then currently scheduled expiry
date of such Letter of Credit. Subject to the terms of the L/C
Application therefor and the terms of this Agreement, the said
Overdraft and L/C Lender shall promptly extend or renew or, subject to
any such amendment being acceptable to the said Overdraft and L/C
Lender, amend such Letter of Credit and furnish such extended or
renewed or amended Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the said Overdraft and L/C Lender and the
relevant Borrower.
SECTION 6.3 - FEES, COMMISSIONS AND OTHER CHARGES
(a) L/C FEE:. the Borrower having requested the issuance of a Letter of
Credit hereunder shall pay to the Overdraft and the L/C Lender which is
to issue such Letter of Credit, a non-refundable fee with respect to
such Letter of Credit in an amount equal to the L/C Rate then in effect
TIMES the face amount thereof, which fee shall be payable quarterly in
arrears on the last Business Day of September, December, March and June
of each year and on the Maturity Date. The L/C Fee for a particular
Letter of Credit shall accrue at the L/C Rate during the period from
the date on which such Letter of Credit is issued until, as the case
may be, the last day of the relevant quarterly period or, if such
Letter of Credit expires during such quarterly period, the expiry date
of such Letter of Credit, and shall be calculated on the basis of the
actual number of days elapsed in a year of 365 days;
(b) OTHER CHARGES: in addition to the L/C Fee, the relevant Borrower shall
pay to each Overdraft and L/C Lender for its own account, with respect
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to each Letter of Credit issued by it hereunder and at the time of
issue thereof and upon the review or negotiation of documents
thereunder, the acceptance of any draft thereunder and the making of
payments thereunder, and upon the making of amendments in respect
thereof, the customary administrative, issuance, amendment, payment and
negotiation charges of such Overdraft and L/C Lender as well as the
fees and charges of any correspondent bank in connection therewith.
SECTION 6.4 - REIMBURSEMENT OBLIGATION OF THE BORROWERS
(a) REIMBURSEMENT: each Borrower shall reimburse the relevant Overdraft and
L/C Lender (whether through Borrowings under the Overdraft and L/C
Facility or otherwise) on each date on which a drawing is made under
any Letter of Credit issued for the account of such Borrower and paid
by the said Overdraft and L/C Lender for the amount equal to the
aggregate of (I) such drawing so paid and (II) any customary charges or
other reasonable costs or expenses which are incurred by the said
Overdraft and L/C Lender in connection with such payment. Each such
payment shall be made to the relevant Overdraft and L/C Lender at its
applicable Branch of Account in the currency in which such Letter of
Credit is denominated and in immediately available funds;
(b) FAILURE TO REIMBURSE AND CONVERSION: if a Borrower fails fully to
reimburse the relevant Overdraft and L/C Lender for the amount owing to
such Overdraft and L/C Lender under paragraph (a) above, then:
(i) in the case of a Letter of Credit issued at the request of a
US Borrower and denominated in US Dollars, such amount shall
be deemed to be a Borrowing under the Overdraft and L/C
Facility by way of a Base Rate Loan for all purposes of this
Agreement,
(ii) in the case of a Letter of Credit issued at the request of a
US Borrower and denominated in Canadian Dollars, such amount
shall be converted into US Dollars by the US Overdraft and L/C
Lender on the basis of its actual spot rate of exchange for
selling Canadian Dollars to obtain US Dollars as at the
relevant time, determined in accordance with the standard
practices of the US Overdraft and L/C Lender, and the amount
of US Dollars so obtained shall be deemed to be a Borrowing
under the Overdraft and L/C Facility by way of a Base Rate
Loan for all purposes of this Agreement,
(iii) in the case of a Letter of Credit issued at the request of a
Canadian Borrower and denominated in US Dollars, such amount
shall be deemed to be a Borrowing under the Overdraft and L/C
Facility by way of a US Base Rate Loan for all purposes of
this Agreement, and
(iv) in the case of a Letter of Credit issued at the request of a
Canadian Borrower and denominated in Canadian Dollars, such
amount shall be deemed to be a Borrowing under the Overdraft
and L/C Facility by way of a Prime Rate Loan for all purposes
of this Agreement,
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and in each such case the Drawdown Date shall be deemed to be the date
of the drawing made under the Letter of Credit. For greater certainty,
interest shall be payable on such a Borrowing in accordance with
Section 4.1.1, 4.1.2 or 4.1.3, as applicable. The Borrowers hereby
irrevocably direct each Overdraft and L/C Lender to apply any amounts
received by it pursuant to this Section 6.4(b) to reimburse itself for
amounts drawn under such Letter of Credit.
SECTION 6.5 - OBLIGATIONS ABSOLUTE
(a) NO SET-OFF: the obligations of the Borrowers under this Article VI
shall be absolute and unconditional under any and all circumstances and
irrespective of any set-off, compensation, counterclaim or defense to
payment which the Borrower may have or have had against any Overdraft
and L/C Lender or any beneficiary of a Letter of Credit issued for the
account of a Borrower;
(b) PROTECTION OF OVERDRAFT AND L/C LENDER: subject to the provisions of
paragraph (d) below, the Borrowers agree with each Overdraft and L/C
Lender that such Overdraft and L/C Lender shall not be responsible for,
and the Borrowers' reimbursement obligations under Section 6.4 shall
not be affected by, among other things, (I) the validity or genuineness
of documents or of any endorsements thereon, even though such documents
shall in fact prove to be invalid, fraudulent or forged, (II) any
dispute between or among a Borrower and any beneficiary of any Letter
of Credit or any other party to which such Letter of Credit may be
transferred or (III) any claims whatsoever of a Borrower against any
beneficiary of such Letter of Credit or any such transferee, except
that each Borrower reserves its right to subsequently assert claims
against the relevant Overdraft and L/C Lender in case of the gross
negligence or wilful misconduct of the said Overdraft and L/C Lender;
(c) NO LIABILITY: no Overdraft and L/C Lender shall be liable for any
error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection
with any Letter of Credit, except for errors or omissions caused by
such Overdraft and L/C Lender's gross negligence or wilful misconduct;
(d) BINDING ACTIONS: each Borrower agrees that any action taken or omitted
by an Overdraft and L/C Lender under or in connection with any Letter
of Credit issued by it for the account of the Borrower or the related
drafts or documents, if done in good faith in the absence of gross
negligence or wilful misconduct and, in the case of letters of credit,
in accordance with the standards of care specified in the then most
recent Uniform Customs and Practice for Documentary Credits, as
published from time to time by the International Chamber of Commerce,
shall be binding on the Borrowers and shall not result in any liability
of such Overdraft and L/C Lender to any Borrower.
SECTION 6.6 - DRAWINGS UNDER LETTERS OF CREDIT: if any draft shall be presented
for payment under any Letter of Credit, the relevant Overdraft and L/C Lender
shall promptly notify the appropriate Borrower of the date and amount thereof.
The responsibility of an Overdraft and L/C Lender to a Borrower in connection
with any draft presented for payment under any Letter of Credit issued by it
shall, in addition to any payment obligation expressly provided for in such
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Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit.
ARTICLE VII
CONDITIONS APPLICABLE TO BANKERS' ACCEPTANCES
SECTION 7.1 - BANKERS' ACCEPTANCES
The Canadian Borrowers may effect Borrowings by way of Bankers' Acceptances
denominated in Canadian Dollars in accordance with the provisions of Section 3.7
and this Article VII.
For the purposes of this Agreement, the full face value of Bankers' Acceptances,
without Discount, shall be used when calculations are made to determine the
amount of Borrowings.
Each determination by the Agent of the Acceptance Fee, the Discount Rate, the
Discounted Proceeds and the Discount shall, in the absence of manifest error be
final, conclusive and binding on the Borrowers and the Lenders.
SECTION 7.2 - CONDITIONS APPLICABLE TO BANKERS' ACCEPTANCES
7.2.1 NOTICE BY BORROWER: a Canadian Borrower shall request that Advances be
made by way of Bankers' Acceptances, that outstanding Borrowings be
converted into Bankers' Acceptances or that Borrowings outstanding by
way of Bankers' Acceptances be renewed in the same form of Borrowing,
by giving on a timely basis the notice required under Section 3.7, 3.11
or 7.2.5, as applicable;
7.2.2 PROCEDURES FOR THE ISSUE OF BANKERS' ACCEPTANCES:
(a) Bankers' Acceptances issued pursuant to this Agreement:
(i) shall be issued only by the Canadian Borrowers under
the Revolving Facility or the Term Facility,
(ii) shall be denominated in Canadian Dollars, in amounts
of Cdn$100,000 or multiples thereof,
(iii) shall be issued, in respect of all Lenders, in a
minimum aggregate amount of Cdn$5,000,000 and whole
multiples of Cdn$1,000,000 in excess of such minimum
aggregate amount,
(iv) shall have a term of one, two, three or six months,
and shall not allow for days of grace,
(v) shall mature on a Business Day on or before the
Maturity Date, and
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(vi) will be purchased by each Lender for its own account,
each Lender (other than a Non-B-A Lender) reserving
the right to sell or trade them in the money market
either directly or through stock brokers or dealers;
(b) the aggregate face amount of the Bankers' Acceptances to be
accepted by a Lender shall be determined by the Agent by
reference to its Lender's Proportion, except that, if the face
amount of a Bankers' Acceptance which would otherwise be
accepted by a Lender would not be Cdn$100,000 or a whole
multiple thereof, such face amount shall be increased or
reduced by the Agent in its sole discretion to Cdn$100,000 or
the nearest whole multiple of that amount, as appropriate,
PROVIDED however that Borrowings from any Lender or Paired
Lenders may not, as a result of the foregoing, exceed the
relevant Commitment of such Lender or Paired Lenders;
(c) Upon each issue of Bankers' Acceptances:
(i) which are purchased by the Lenders for their own
account, the Borrowers having issued such Bankers'
Acceptances shall be entitled to be credited by the
Agent on behalf of the said Lenders with the
Discounted Proceeds thereof, less the Acceptance Fee,
(ii) as a result of the conversion of outstanding
Borrowings into Bankers' Acceptances or as a result
of the renewal of outstanding Bankers' Acceptances,
the Borrowers having issued such Bankers' Acceptances
shall, concurrently with the conversion or renewal,
pay in advance to the Agent on behalf of the
accepting Lenders an amount equal to the Discount
applicable to such issue, to be applied against the
principal amount of the Borrowing being so converted
or renewed, plus the applicable Acceptance Fee.
7.2.3 DELIVERY BY BANKERS' ACCEPTANCES AND POWER OF ATTORNEY FOR THEIR
EXECUTION: as a condition precedent to the obligation of a Lender to
accept Bankers' Acceptances hereunder, each Canadian Borrower shall
have delivered to such Lender sufficient bankers' acceptances signed
and endorsed in blank in sufficient time to enable such Lender to hold
and complete same in accordance with a request from such Borrower
through the Agent. Alternatively, to facilitate availment of the
Borrowings by way of Bankers' Acceptances, each Borrower hereby
appoints each Lender as its agent to sign and endorse on its behalf, in
handwriting or by facsimile or mechanical signature as and when deemed
necessary by such Lender, blank forms of Bankers' Acceptances in order
to allow each Lender to complete and accept from time to time such
instruments in the aggregate and face amounts and for the maturities
chosen by the Borrower (subject to the provisions of Sections 7.3 and
7.4). In this respect, each Lender will maintain an adequate supply of
blank forms of Bankers' Acceptances so pre-signed and pre-endorsed for
acceptance hereunder. Each Canadian Borrower recognizes and agrees that
all Bankers' Acceptances signed and/or endorsed on its behalf by a
Lender shall bind such Borrower as fully and effectually as if signed
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in the handwriting of and duly issued by the proper signing officers of
the said Borrower. In this connection, the parties also agree as
follows:
(a) no Lender shall be liable for any damage, loss or other claim
arising by reason of any loss or improper use of any bankers'
acceptance signed and endorsed in blank as aforesaid except
any loss arising by reason of the gross negligence or wilful
misconduct of such Lender or its officers, employees, agents
or representatives failing to use the same standards of care
in the custody of such bankers' acceptances as such Lender
uses in the custody of its own property of a similar nature;
(b) in accordance with the instructions given from time to time by
a Canadian Borrower, each relevant Lender is hereby authorized
to complete the aforementioned Bankers' Acceptance forms, to
provide its acceptance thereon, to provide (when applicable)
the Discounted Proceeds thereof to the Agent for the account
of the said Borrower and, at each such Lender's option, to put
them into circulation, the whole as provided in and subject to
this Agreement; and
(c) on request by or on behalf of a Borrower, a Lender shall
cancel all forms of Bankers' Acceptance which have been
pre-signed or pre-endorsed by or on behalf of such Borrower
and which are held by the said Lender and have not yet been
issued in accordance herewith.
7.2.4 EXECUTION OF BANKERS' ACCEPTANCES: drafts of a Borrower to be accepted
as Bankers' Acceptances hereunder shall be signed as set forth in
Section 7.2.3. Notwithstanding that any person whose signature appears
on any Bankers' Acceptance may no longer be an authorized signatory for
a Borrower at the date of issuance of a Bankers' Acceptance, such
signature shall nevertheless be valid and sufficient for all purposes
as if such authority had remained in force at the time of such issuance
and any such Bankers' Acceptance so signed shall be binding on the said
Borrower.
7.2.5 PROCEDURES RELATING TO THE MATURITY AND FACE AMOUNT OF ALL BANKERS'
ACCEPTANCES:
(a) NOTIFICATION TO AGENT: if Bankers' Acceptances are outstanding
hereunder, the Borrower having issued such Bankers'
Acceptances shall, prior to the date of maturity of the then
current Bankers' Acceptances issued by it, irrevocably notify
the Agent of its intention to repay, renew or convert such
Borrowing at the maturity of the related Bankers' Acceptances,
such notice to be given by telephone within notice periods
similar to those provided in Section 3.7, followed by written
confirmation on the same day substantially in the form
attached as SCHEDULE "K" or such other form as may be
acceptable to the Agent;
(b) RENEWAL TERM: if a Borrower shall choose to renew a Borrowing
outstanding by way of Bankers' Acceptances in the same form of
Borrowing, a Borrower shall cause the term of the new Bankers'
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Acceptances to commence on and include the date of maturity of
the relative Bankers' Acceptances being renewed;
(c) FAILURE TO NOTIFY: if a Borrower fails to notify the Agent as
provided in Section 7.2.5(a), the said Borrower shall be
deemed to have notified the Agent on behalf of the Lenders of
its intention to convert the relevant Borrowing by way of
Bankers' Acceptances into a Prime Rate Loan;
(d) PAYMENT ON MATURITY: a Borrower having issued Bankers'
Acceptances hereunder shall, by no later than 11:00 a.m. on
the maturity date of each Bankers' Acceptance, pay to each
relevant Lender an amount equal to the face amount of all
Bankers' Acceptances accepted by such Lender and maturing on
that day (I) by effecting such payment out of its own funds to
the Agent for the benefit of the relevant Lender, or (II) by
converting such Borrowing by way of Bankers' Acceptances into
another form of Borrowing then available hereunder or (III) by
renewing such Bankers' Acceptances hereunder, subject to the
payment of the Discount as provided in Subsection
7.2.2.(c)(ii) and in each case of renewal, the payment of the
Discounted Proceeds as provided in Section 7.2.2(c)(i),
together with the Discount paid to such Lender in respect
thereof, shall be applied by the said Lender to the reduction
of the Borrowing being renewed;
(e) FAILURE TO PAY: in the event that a Borrower fails to provide
payment of the face amount of a Bankers' Acceptance on its
maturity date as required pursuant to Section 7.2.5(d), then
the Canadian Dollar amount of such failed payment shall be
deemed for all purposes of this Agreement to be and shall be
treated in all respects as a Borrowing by way of a Prime Rate
Loan as and from such maturity date.
7.2.6 ACCEPTANCE FEE: a Borrower having issued Bankers' Acceptances hereunder
shall pay to the Agent for the account of each of the relevant Lenders
the Acceptance Fee in Canadian Dollars forthwith upon the acceptance by
a Lender of a Bankers' Acceptance issued by the said Borrower. The said
Borrower authorizes and directs the Agent and the Lenders to deduct
from the Discounted Proceeds of Bankers' Acceptances purchased by the
Lenders for their own account, the amount of each such Acceptance Fee
upon the issue of each Bankers' Acceptance;
7.2.7 ALTERNATE BASIS OF BORROWING: if at any time during the term of this
Agreement, a Lender or, as the case may be, the Agent determines in
good faith (which determination shall be final, conclusive and binding
upon the Borrowers) that by reason of circumstances or changes
affecting the market for Bankers' Acceptances:
(a) it is no longer possible for that Lender to establish the
Discount Rate in respect of Bankers' Acceptances accepted by
it, or
(b) the market for Bankers' Acceptances no longer exists, is too
weak for its normal use by the Lenders or is not capable in
the normal course of business to absorb Bankers' Acceptances
accepted by the Lenders,
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then, the Agent shall immediately (or in the case of (a) above upon
receipt of notice from the relevant Lender) notify the Canadian
Borrowers of its determination in writing. For so long as the
circumstances referred to in paragraphs (a) or (b) of this subsection
shall continue, the affected Lender shall not be obliged to make any
further Borrowings available by way of Bankers' Acceptances and
thereafter, until notice to the contrary is given to the Canadian
Borrowers by the Agent, the affected Lender shall only be obligated to
make other forms of Borrowings available to the Borrowers hereunder,
and the principal amount of all Borrowings outstanding by way of
Bankers' Acceptances owed to such Lender shall, at the expiry of the
related Bankers' Acceptances, be converted without novation into such
other form of Borrowing as each relevant Borrower may request by notice
to the Agent or failing such notice, into Prime Rate Loans;
7.2.8 WAIVER OF CLAIM: no Borrower shall have the right to set up as against
any of the Lenders or the Agent any defence or right of action, of
indemnification or of set-off or compensation or any similar claim of
any nature whatsoever which a Borrower may have had at any time or may
have in the future with respect to any holder of one or more Banker's
Acceptance(s) issued hereunder;
7.2.9 AGENT TO FURNISH DETAILS OF BORROWINGS TO LENDERS: with respect to each
Borrowing by way of Bankers' Acceptances, after a Borrower has given
notice to the Agent as stipulated in Section 3.7, 3.11 or 7.2.5, the
Agent shall on the Business Day prior to the relevant Drawdown Date,
Conversion Date or renewal date, advise each relevant Lender of:
(a) the name of the relevant Borrower;
(b) the amount, date and term of the Bankers' Acceptances;
(c) each Lender's participation in such issue of Bankers'
Acceptances; and
(d) the Acceptance Fee applicable thereto;
and on the relevant Drawdown Date, Conversion Date or renewal date, the
Agent shall advise each relevant Lender of the Discount Rate, the
Discount Proceeds and the Discount. To enable the Agent so to advise
each relevant Lender, those Lenders, if any, whose discount rates are
to be used in the calculation of Discount Rates applicable to Bankers'
Acceptances agree to advise the Agent of their respective discount
rates at or about 10:00 a.m. on the date of issuance of any such
Bankers' Acceptances.
7.2.10 ADVANCE TO BE MADE THROUGH AGENT: on the Drawdown Date of each Advance
by way of Bankers' Acceptances, each relevant Lender agrees to provide
the Discounted Proceeds of the Bankers' Acceptances accepted by it (or
the Discount Notes issued to it), less the Acceptance Fee, to the Agent
at the Agent's Account for Payments for value on such Drawdown Date.
7.2.11 PAYMENT BY LENDER ON MATURITY: on the maturity date of each Bankers'
Acceptance issued hereunder, each relevant Lender, at such Lender's
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Montreal or Toronto main branch or office, will pay to the redeeming
holder, if any, of each Bankers' Acceptance, at the time of presentment
thereof, the face amount of such Bankers' Acceptance.
SECTION 7.3 - BA EQUIVALENT LOANS BY NON-BA LENDERS
Whenever a Borrower makes a Borrowing under this Agreement by way of Bankers'
Acceptances, each Non-BA Lender shall, in lieu of accepting a Bankers'
Acceptance, make a BA Equivalent Loan.
SECTION 7.4 - SPECIAL CONDITIONS APPLICABLE TO NON-BA LENDERS
The provisions of this Article VII dealing with Bankers' Acceptances apply to
the Non-BA Lenders, provided that each of the Non-BA Lenders shall execute its
obligations pursuant to this Article VII by effecting (in the case of an
Advance) or maintaining (in the case of a conversion or renewal of a Borrowing)
direct advances to the relevant Borrower, through the Agent, equal to its
Lender's Proportion of each Borrowing to be outstanding by way of Bankers'
Acceptances, and not by accepting Bankers' Acceptance instruments as provided
herein. In order to allow the Non-BA Lenders to derive benefits comparable to
those enjoyed by the other Lenders under this Article VII in respect of each
Borrowing by way of Bankers' Acceptances, each of the Non-BA Lenders may deduct
for its own account, from each Borrowing which would otherwise be granted by way
of the issue and acceptance of Bankers' Acceptances, an amount equivalent to the
total of the Discount and the Acceptance Fee applicable to such Borrowing by way
of Bankers' Acceptances. The relevant Borrower shall deliver to each of the
Non-BA Lenders non-interest bearing Discount Notes substantially in the form of
SCHEDULE "D" in respect of Borrowings by way of Bankers' Acceptances in lieu of
Bankers' Acceptances in the form of SCHEDULE "C"; provided that the Borrowings
from the Non-BA Lenders to be evidenced by such Discount Notes shall in no
circumstance be deemed to constitute the novation of a previous Borrowing being
converted or renewed hereunder, such Discount Notes being intended to serve
merely as the confirmation of the current method of computing the cost of such
converted or renewed Borrowing. At the time of each Borrowing by way of Bankers'
Acceptances, such form of Discount Notes shall be completed as follows: they
shall be payable to the order of the Non-BA Lender, shall be in principal
amounts equal to its Lender's Proportion of the related Borrowings to be
outstanding by way of Bankers' Acceptances and shall have the same maturities as
are applicable to such Borrowings.
The provisions of this Agreement dealing with Bankers' Acceptances (including
the provisions of Section 7.2.3 relating to their execution by the Lenders under
power of attorney) shall apply MUTATIS MUTANDIS to Discount Notes to be issued
to Non-BA Lenders, with all adjustment to the language of such provisions which
may be desirable to give full effect to the spirit and intent of this Section
(except that no Discount Note may be sold, traded, negotiated, rediscounted or
otherwise disposed of by Non-BA Lenders, except as contemplated by Article XVIII
hereof).
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ARTICLE VIII
PAYMENT, TAXES, INCREASED COSTS, EVIDENCE
OF INDEBTEDNESS AND TIMING OF MATURITIES
SECTION 8.1 - PLACE OF PAYMENT OF PRINCIPAL, INTEREST AND CHARGES
Except as otherwise specifically provided herein, all payments of principal,
interest, additional interest, fees and other charges to be made by the
Borrowers to the Agent on behalf of each of the Lenders pursuant to this
Agreement shall be made for value on the day such amount is due and if such day
is not a Business Day, on the Business Day next following (subject to Sections
3.8.2 and 5.1.2(c) hereof), by payment or transfer of moneys to the appropriate
Agent's Account for Payments. Any amounts received by the Agent from a Borrower
after 3:00 p.m., on any Business Day, shall be applied to the appropriate
payment, repayment or prepayment due on such day, on the next following Business
Day. Until so applied, interest shall continue to accrue as provided in this
Agreement on the amount of such payment, repayment or prepayment.
All payments of principal, interest, additional interest, fees and other charges
to be made by the Borrowers in respect of the Overdraft and L/C Facility will be
made directly to the Overdraft and L/C Lenders at their respective Branch of
Account. Each Overdraft and L/C Lender will notify the Agent of any failure of a
Borrower to make payments in respect of the Overdraft and L/C Facility.
SECTION 8.2 - PAYMENT TO AGENT IS DEEMED PAYMENT TO LENDERS
Receipt by the Agent (for the account of the Lenders) from a Borrower of funds
pursuant to this Agreement, as principal, interest or otherwise, shall be deemed
to be receipt of such funds by the Lenders.
SECTION 8.3 - ACCOUNT DEBIT AUTHORIZATION
Each Borrower authorizes and directs each of the Agent and the Overdraft and L/C
Lenders, in its discretion, to automatically debit, by mechanical, electronic or
manual means, the bank accounts of such Borrower maintained with the Agent
(whether or not in its capacity as Agent) or either of the Overdraft and L/C
Lenders, as applicable, for all amounts payable by such Borrower under this
Agreement and the other Operative Documents, including but not limited to the
repayment of principal and the payment of interest, fees, expenses and all other
charges for the keeping of such bank accounts.
SECTION 8.4 - APPLICATION OF PAYMENTS
8.4.1 ORDER OF APPLICATION: except with respect to payments received by
either of the Overdraft and L/C Lenders (which may be applied to the
satisfaction of the respective obligations of the Borrowers in respect
of the Overdraft and L/C Facilities as each Overdraft and L/C Lender
may decide), all payments made by or on behalf of a Borrower pursuant
to this Agreement prior to the occurrence of an Event of Default shall
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be applied by the Agent in accordance with the provisions of Section
8.4.3 in the following order:
(a) to amounts due pursuant to Section 4.5, as and by way of
Agent's fees,
(b) to amounts due pursuant to Section 4.4, as and by way of
Standby Fee,
(c) to amounts due pursuant to Section 12.1, as and by way of
expenses,
(d) to amounts due pursuant to Section 12.2, as and by way of
indemnity,
(e) to amounts due pursuant to Section 4.7, as and by way of
default interest on overdue amounts,
(f) to amounts due pursuant to Sections 4.1, 4.2, 7.2.2b(ii) and
7.2.6, as and by way of interest, Acceptance Fee (and any
adjustment due to be made thereto on the day of application)
and Discount,
(g) to amounts due pursuant to Sections 3.8, 3.9 and 7.2.5(d) as
and by way of principal, and ,
(h) in payment of any other amounts then due and payable by the
Credit Parties hereunder or under any of the other Operative
Documents;
8.4.2 EVENT OF DEFAULT: after the occurrence and during the continuance of an
Event of Default, all payments made by or on behalf of the Credit
Parties pursuant to this Agreement and the other Operative Documents
and all sums received or realized on account of amounts owing hereunder
or under the other Operative Documents shall be paid to and be
appropriated and applied proportionately by the Agent towards the
obligations of the Credit Parties under all Credit Facilities as the
Agent may decide or the Majority Lenders may direct, but subject to the
provisions of Section 17.9, and any such appropriation and application
shall override any appropriations or applications made by any Borrower;
8.4.3 SHARING: the Lenders agree among themselves that all sums received by
the Lenders for application against amounts owing under this Agreement
and under the other Operative Documents and referred to in one of
paragraph (b) through (h) of Section 8.4.1 shall be shared by each
Lender in the proportion borne by the amounts owing to such Lender
under such subparagraph to the amounts owing to all Lenders under such
subparagraph.
SECTION 8.5 - MANNER OF PAYMENT AND TAXES
8.5.1 NO SET-OFF; NO WITHHOLDING: each Borrower shall make all payments to
the Lenders and the Agent pursuant to this Agreement and the other
Operative Documents to which it is a party without set-off,
compensation or counterclaim, free and clear of, and exempt from, and
without deduction for or on account of, any Tax, other than a Tax
arising (I) in the case of Borrowings by a Canadian Borrower, as a
consequence of the relevant Lender's failure to be a Person resident in
Canada for the purpose of ITA or (II) in the case of Borrowings by a US
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Borrower, as a consequence of the relevant Lender's failure to be
entitled to receive payments from such US Borrower hereunder without
deduction or withholding of any United States federal income taxes or
to be entitled to an exemption from United States backup withholding
tax. If a deduction or withholding is required by Applicable Law, the
said Borrower shall:
(a) pay or cause to be paid to the appropriate authority the
amount of the withholding or deduction by no later than the
latest date permitted by that authority (including any
extension of time granted by that authority) or, in the case
of a Tax, the payment of which is being contested prior to the
date on which such Tax is due and payable, by no later than
the date on which the authority requires the Tax to be paid,
(b) produce to the Agent not later than 30 days after that payment
a receipt of that authority evidencing that it has received
the proper amount from the Borrower, and
(c) pay such sums to the Agent, acting for the account of the
Lenders, as may be necessary so that the net amount received
by each Lender and the Agent after all required deductions or
withholdings (including deductions and withholdings for or on
account of Taxes on any sums payable under this Section) will
not be less than the amount the relevant Lender or the Agent
would have received had no such deduction or withholding been
required;
8.5.2 INCREASED RATE OF INTEREST: if a Borrower is prevented by operation of
law or otherwise from paying or causing to be paid to the Agent or the
Lenders such sums as it may be required to pay in accordance with
Section 8.5.1, the applicable rates of interest will be increased to
the rates necessary to yield and to remit to the affected Person the
net amount in the appropriate currency equal to the full amount it
would have received had such Tax not been so deducted or withheld;
8.5.3 TAX CREDIT: if, as a result of any deduction or withholding a Borrower
makes any payment of any additional amounts to the Lenders and the
Agent under Sections 8.5.1 and 8.5.2 and the affected Lender or the
Agent, in its sole reasonable opinion, determines that it has received
or has been granted a credit against or relief or remission for or
repayment of any tax paid or payable by it in respect of or which takes
account of the deduction, withholding or other matter giving rise to
such payment, the affected Lender or the Agent will, to the extent it
determines that it can do so without prejudice to the retention of the
amount of such credit, relief, remission or repayment, pay to the said
Borrower such amount, as the affected Lender or the Agent shall, in its
sole reasonable opinion, determine to be attributable to such deduction
or withholding or other matter and which will leave it (after such
payment) in a position which it determines to be no better or no worse
than it would have been if the said Borrower had not been required to
make such deduction or withholding or if such other matter had not
arisen. Nothing herein contained shall (A) interfere with the right of
the affected Lender or the Agent to arrange its taxes or other affairs
in whatever manner it may think fit, (B) oblige the affected Lender or
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the Agent to disclose any information relating to its taxes or other
affairs or any computations in respect thereof, (C) require the
affected Lender or the Agent to do anything that it may determine would
or may prejudice its ability to benefit from any other credit, relief
or remissions for or repayment to which its ability to benefit from any
other credit, relief or remissions for or repayment to which it may be
entitled, or (D) require the affected Lender or the Agent to give any
priority as to the order in which it may allocate to any person or
class of persons any such credit, relief, remission or repayment;
8.5.4 SURVIVAL OF OBLIGATIONS: the obligations of the Borrowers under this
Section 8.5 to effect payments of further sums in connection with the
imposition of Taxes shall, if such sums or Taxes have not been paid,
survive the payment of principal and interest on all the Borrowings,
the termination of all Commitments and the satisfaction of all
liabilities owed to the Agent and the Lenders pursuant to the Operative
Documents.
SECTION 8.6 - INCREASED COSTS AND PAYMENT OF PORTION
8.6.1 INCREASED COSTS: If after the date of execution hereof, any
introduction of any Applicable Law or any change or introduction of a
change in any Applicable Law (whether or not having the force of law)
or in the interpretation or application thereof by any court or by any
governmental agency, central bank or other judicial, governmental,
administrative or other authority or entity charged with the
administration thereof or any change in the compliance of any Lender
therewith, or if present or future compliance by a Lender with any new
or changed request or directive (compliance with which is in accordance
with the practice of responsible banks or financial institutions) from
any central bank or other fiscal authority (whether or not having the
force of law), now or hereafter:
(a) subjects any Lender to, or causes the withdrawal or
termination of a previously granted exemption with respect to,
any Tax or changes the basis of taxation, or increases any
existing Tax, on payments of principal, interest, fees or
other amounts payable by the Borrowers to such Lender under
this Agreement,
(b) imposes, modifies or deems applicable any reserve, special
deposit, deposit insurance or similar requirements against
assets held by, or deposits in or for the account of or loans
by or any other acquisition of funds by, an office of such
Lender or with respect to Bankers' Acceptances accepted by
such Lender or Letters of Credit issued hereunder,
(c) imposes on such Lender or expects there to be maintained by
such Lender any capital adequacy or additional capital
requirements in respect of any Borrowing or any Commitment of
such Lender hereunder or any other condition with respect to
this Agreement, or
(d) imposes any Tax or reserves or deemed reserves with respect to
the undrawn portion of the Aggregate Commitment or the
Commitment of any Lender;
and the result of any of the foregoing, in the sole determination of
the relevant Lender acting reasonably, shall be to increase the cost
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to, or reduce the amount of principal, interest or other amount
received or receivable by such Lender hereunder or the effective return
to such Lender in respect of making, maintaining or funding Loans,
Bankers' Acceptances or Letters of Credit under this Agreement, such
Lender shall, acting reasonably, determine that amount of money which
shall compensate such Lender for such increase in cost or reduction in
income (herein referred to as "ADDITIONAL COMPENSATION"). Upon such
Lender having determined that it is entitled to Additional Compensation
in accordance with the provisions of this Section 8.6 such Lender shall
promptly so notify Xxxxxxx, the relevant Borrower (if other than
Xxxxxxx) and the Agent. Notwithstanding any other provision of this
Section 8.6, each Lender shall be entitled to compensation under this
Section 8.6 for only such costs as are incurred or reductions as are
suffered for which notification was given as aforesaid within 90 days
after actual knowledge of such costs or reductions is obtained by a
responsible officer of such Lender at its Branch of Account. Such
Lender shall provide to Xxxxxxx, the relevant Borrower (if other than
Xxxxxxx) and the Agent a photocopy of, or an extract from, the relevant
law, rule, guideline, regulation, treaty or official directive and a
certificate of a Responsible Officer of such Lender setting forth the
Additional Compensation and the basis of calculation therefor, which
shall be conclusive evidence of such Additional Compensation in the
absence of manifest error. The relevant Borrower shall pay to such
Lender within 45 days of the giving of such notice such Lender's
Additional Compensation calculated to the date of such notification.
Such Lender shall be entitled to be paid such Additional Compensation
from time to time to the extent that the provisions of this Section 8.6
are then applicable notwithstanding that such Lender has previously
been paid any Additional Compensation. Such Lender shall make
commercially reasonable efforts to limit the incidence of any such
Additional Compensation, including seeking recovery for the account of
the relevant Borrower, by appealing any assessment at the expense of
the relevant Borrower upon the relevant Borrower's request, provided
such Lender, in its sole determination, suffers no appreciable
economic, legal or regulatory disadvantage.
The obligation of the Borrowers under this Section 8.6.1 shall survive
the repayment of the principal amount of the Borrowings (and interest
thereon) and the payment of all other amounts due hereunder.
8.6.2 PAYMENT IN PORTION: Notwithstanding the other provisions hereof, if a
Lender gives the notice provided for in Section 8.6.1 with respect to
any Loan (an "AFFECTED LOAN"), the relevant Borrower may at its option,
upon ten Business Days notice to that effect given to such Lender
(which notice shall be irrevocable), unless such prepayment causes a
Default to have occurred hereunder, elect to prepay in full without
penalty such Affected Loan outstanding together with accrued and unpaid
interest on the principal amount so prepaid up to the date of such
prepayment, such Additional Compensation as may be applicable to the
date of such payment and all costs, losses and expenses incurred by
such Lender by reason of the liquidation or re-employment of deposits
or other funds contemplated by Section 12.2 or for any other reason
whatsoever resulting from the repayment of such Affected Loan or any
part thereof on other than the last day of the applicable interest
period, upon such payment being made, such Lender's obligations in
respect of such Affected Loan to the Borrower under this Agreement
shall terminate.
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SECTION 8.7 - ILLEGALITY
If the adoption of any Applicable Law, or any change therein or in the
interpretation or application thereof by any court or by any governmental or
other authority or central bank or comparable agency or any other entity charged
with the interpretation or administration thereof or compliance by any Lender
with any request or direction (whether or not having the force of law) of any
such authority, central bank or comparable agency or entity now or hereafter
makes it unlawful or impossible for any Lender to make, fund or maintain the
Borrowings hereunder or any portion of such Borrowings or to perform its
obligations under this Agreement, such Lender (the "AFFECTED LENDER") may, by
written notice thereof to Xxxxxxx and the relevant Borrower(s) (if other than
Xxxxxxx) through the Agent (accompanied by a photocopy of, or extract from, the
relevant change in Applicable Law or in the interpretation thereof and by an
explanation thereof in reasonable detail), suspend its obligations under this
Agreement with respect to the Borrowings affected by such illegality or
prohibition (each an "AFFECTED BORROWING") for the duration of the period of
such illegality or prohibition, and the relevant Borrower or Borrowers shall
forthwith (or at the end of such period as the Affected Lender in its discretion
agrees) prepay the Affected Borrowings or such portion thereof together with
accrued but unpaid interest and fees as may be applicable to the date of
prepayment and all other amounts that may be payable under Section 12.2 or, the
relevant Borrower or Borrowers may by written notice to the Affected Lender
through the Agent, forthwith, subject to the payment of all other amounts that
may be payable under Section 12.2, convert the Affected Borrowing into another
basis of Borrowing remaining available from the Affected Lender under the
relevant Credit Facility, if any, and thereafter such Affected Lender shall only
be obligated to extend its Lender's Proportion of the Affected Borrowings in
such other available basis of Borrowings, if any. The Affected Lender agrees to
use commercially reasonable efforts to mitigate or avoid the circumstances
giving rise to such illegality or prohibition, (including, upon the request and
at the cost of the relevant Borrower or Borrowers, relocating its Branch of
Account to a jurisdiction where such illegality or prohibition would not apply).
SECTION 8.8 - TIMING OF MATURITIES
The Borrowers shall time the maturities of the Libor Interest Periods and the
Bankers' Acceptances so that they fall on or before the applicable date on which
principal is due to be paid in respect thereof under this Agreement in an amount
at least equal to the amount of such principal being repaid so as not to exceed
any Commitment following such applicable date. If a Borrower fails to time such
maturities in such way in respect of a Libor Loan, the Agent will make the
necessary arrangements for early termination of such Libor Interest Periods in
an amount sufficient to effect the repayment of principal in accordance with
this Agreement, and the said Borrower will pay to the Agent on behalf of the
Lenders an amount equal to any loss or expense incurred by each Lender as a
result of such early termination as contemplated by Section 12.2. If a Borrower
fails to time the maturities of Bankers' Acceptances as set forth above, such
Borrower will, on demand by the Agent, pay to the Agent for the account of the
Canadian Lenders an amount in Canadian Dollars equal to the face value of the
relevant unmatured Bankers' Acceptances or such lesser amount as will cover the
deficiency, and, upon such payment, the said Borrower shall be released of its
liability to the Lenders in respect of such unmatured Bankers' Acceptances, to
the extent of the amount so paid.
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SECTION 8.9 - EVIDENCE OF INDEBTEDNESS
The Agent shall open and maintain in its books, accounts and records evidencing
the Borrowings made available by the Lenders through the Agent under this
Agreement. The Agent shall record therein the amount of each Borrowing made
available by each Lender through the Agent by way of Loans and shall record
therein each payment of principal on account thereof, shall record the Bankers'
Acceptances accepted, paid and cancelled by each Lender and shall record all
other amounts becoming due to each Lender (other than the Overdraft and L/C
Lenders) and the Agent under this Agreement, including interest, Standby Fees,
Agent's fees and Acceptance Fees and all payments on account thereof. Each
Overdraft and L/C Lender shall open and maintain similar accounts and records
containing the said information insofar as the Overdraft and L/C Facility of
such Overdraft and L/C Lender may be concerned, including Letters of Credit
issued thereunder and L/C Fees and other amounts. The Lenders may also maintain
their own separate accounts and records relating to any of the foregoing. Such
accounts and records maintained by the Agent or an Overdraft and L/C Lender or
by a Lender will constitute, in the absence of manifest error, PRIMA FACIE
evidence of the Indebtedness of the Borrowers owing to the Lenders and the Agent
pursuant to this Agreement, the date of each Borrowing made available by the
Agent on behalf of the Lenders or by such Overdraft and L/C Lender or by such
Lender, as applicable, and the amount thereof and the amounts which and the
dates on which a Borrower has made payments to the Agent on behalf of the
Lenders or to an Overdraft Lender, as applicable, or on which a Lender has made
and received payments hereunder, from time to time on account of the principal
thereof and interest thereon and, to the extent applicable, on account of
Standby Fees, Agent's fees, Acceptance Fees, L/C Fees and Bankers' Acceptances
accepted, paid and cancelled and Letters of Credit issued, paid and cancelled.
Notwithstanding the foregoing, the omission of the Agent, an Overdraft and L/C
Lender or a Lender to maintain any such accounts or records, or any error
therein, shall not in any manner affect the obligation of the Borrowers to repay
(with applicable interest and fees) the Borrowings in accordance with the terms
of this Agreement.
ARTICLE IX
GUARANTEE OF XXXXXXX AND SUBSIDIARY GUARANTEES
SECTION 9.1 - GUARANTEE OF XXXXXXX
Xxxxxxx shall at all times be solidarily liable to the Lenders and the Agent for
all obligations of the other Borrowers (including Additional Borrowers) set
forth in this Agreement. Without limiting the generality of the foregoing,
Xxxxxxx hereby unconditionally guarantees the punctual payment when due, whether
at stated maturity, by acceleration or otherwise, of all Indebtedness of every
nature, whether for principal, interest, fees, expenses or otherwise, of each
other Borrower (including each Additional Borrower) under or in respect of this
Agreement, Xxxxxxx hereby binding itself with the other Borrowers as solidary
co-debtor, renouncing the benefits of discussion and division. Xxxxxxx
recognizes that it shall be liable hereunder in respect of all such obligations
of the other Borrowers without any requirement that it be notified or informed
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of the time or manner of Borrowings and repayments by the other Borrowers
hereunder, Xxxxxxx hereby renouncing any right to receive any such notice.
The liability of Xxxxxxx, as solidary guarantor of, and co-debtor with, each
other Borrower (including each Additional Borrower) in accordance with the
foregoing, shall be absolute and unconditional and shall be continuing and
remain in full force and effect until indefeasible payment in full of all
obligations under this Agreement, and shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by, any circumstance or occurrence whatsoever, including,
without limitation:
(a) any increase or decrease in the Commitments, any change in the time,
place or manner of payment of, or in any other term of, all or any of
the terms of this Agreement, any waiver, indulgence, renewal,
extension, amendment or modification of or addition, consent or
supplement to or deletion from or any other action or inaction under or
in respect of this Agreement or any other instrument, agreement or
document referred to therein, or any assignment or transfer of any
thereof;
(b) any lack of validity or enforceability of this Agreement or any
document, instrument, agreement or Subsidiary Guarantees referred to
herein or any assignment or transfer of any thereof;
(c) the lack of capacity or authority of any of the Credit Parties or any
of the directors, officers, agents or person acting or purporting to
act for the account of a Borrower hereunder, or the fact that any such
director, officer, agent or person may have exceeded his authority, may
have exercised such authority in an irregular or defective manner or
may have ceased to hold such authority;
(d) any furnishing of any Guarantee or security to any of the Lenders or
their assignees or any acceptance thereof or any release of any
Subsidiary Guarantee or security by the Agent or any of the Lenders, or
their assignees;
(e) any limitation on any party's liability or obligations under any such
document, instruments, agreements or Subsidiary Guarantee or any term
thereof or any invalidity or unenforceability, in whole or in part, of
this Agreement or any such documents, instruments, agreements or
Subsidiary Guarantee or any term thereof;
(f) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to any of
the Credit Parties, or any action taken with respect to this Agreement
or the other Operative Documents, by any receiver, agent or trustee, or
by any court in any such preceding, whether or not a Borrower shall
have notice or knowledge of any of the foregoing;
(g) any exchange, release or nonprotection of the Subsidiary Guarantees or
other collateral, or any release, or amendment or waiver of or consent
to departure from any of the terms hereof or any Subsidiary Guarantee
or other collateral;
(h) any amalgamation, merger, continuation or other corporate
reorganization, restructuring or action involving any of the Credit
Parties; or
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(i) any other circumstance which might otherwise constitute a defence
available to, or a discharge of the Credit Parties, or any of them, as
borrower or as guarantor hereunder.
In the event that Xxxxxxx makes a partial payment of its obligations hereunder
as a guarantor and co-debtor of another Borrower, it shall not be entitled to
make a claim by subrogation against the other Borrower for the amount in
question until such time as the Lenders and the Agent shall have received full
and indefeasible payment of all monies owed to them under this Agreement.
SECTION 9.2 - SUBSIDIARY GUARANTEES
Xxxxxxx shall deliver or cause to be delivered to the Agent on behalf of the
Lenders:
(a) as a condition precedent to Borrowings hereunder, a Subsidiary
Guarantee of ICI and a Subsidiary Guarantee of CII; and
(b) within 15 days of the time when any other Wholly-Owned Subsidiary
becomes or is designated as a Restricted Subsidiary, a Subsidiary
Guarantee of such Restricted Subsidiary,
each such Subsidiary Guarantee to be duly authorized and executed and to serve
as continuing Guarantee for the payment and performance of the Indebtedness and
obligations (whether as Borrower or guarantor) of each other Borrower to the
Lenders and the Agent, both present and future, in respect of the Credit
Facilities, the whole to the extent permitted by Applicable Law, together in
each case with certified copies of the latter's constating documents, by-laws
and board of directors resolution authorizing the execution of such Subsidiary
Guarantee accompanied by a legal opinion of such Restricted Subsidiary's Counsel
confirming the status of such Restricted Subsidiary and the due execution,
validity and enforceability of such Subsidiary Guarantee, provided that, in the
case of a Restricted Subsidiary which is impeded by Applicable Law to grant its
unrestricted and unconditional Subsidiary Guarantee, the said legal opinion
shall set forth the reasoning for such impediment in a manner satisfactory to
the Agent.
SECTION 9.3 - DESIGNATION AND REDESIGNATION OF RESTRICTED SUBSIDIARIES
Xxxxxxx may from time to time, on not less than five Business Days notice to the
Agent, designate any of its Wholly-Owned Subsidiaries as a Restricted Subsidiary
and redesignate any Restricted Subsidiary, other than ICI and CII, as an
Unrestricted Subsidiary by providing to the Agent the following information and
certificates which shall be in form and substance satisfactory to the Agent:
(a) IN THE CASE OF ANY REDESIGNATION OF A RESTRICTED SUBSIDIARY AS AN
UNRESTRICTED SUBSIDIARY: (I) financial statements of Xxxxxxx on a
modified Consolidated basis covering the last 12-month period, (II) a
pro forma balance sheet and income statement of Xxxxxxx on a modified
Consolidated basis (including Xxxxxxx and its remaining Restricted
Subsidiaries, and excluding the Restricted Subsidiary being
redesignated as an Unrestricted Subsidiary) evidencing compliance with
the financial ratios set forth in Section 11.1.32 during the projected
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12-month period and (III) a certificate of a Responsible Officer of
Xxxxxxx to the effect that no Default or Event of Default exists or
will exist before and after having given effect to the redesignation,
that the financial ratios set forth in Section 11.1.32 are expected to
be met during the next 12-month period, that such redesignation does
not and, after a review of projected revenues, is not expected to
adversely affect the aggregate Cash Flow From Subsidiaries to be
received by Xxxxxxx from its other Restricted Subsidiaries and that
after giving effect to such redesignation and at all times thereafter,
Xxxxxxx and its remaining Restricted Subsidiaries will remain Solvent;
(b) IN THE CASE OF THE DESIGNATION OF A PERSON AS A RESTRICTED SUBSIDIARY:
a certificate of a Responsible Officer of Xxxxxxx to the effect that
(I) no Default or Event of Default exists or will exist before and
after having given effect to the designation, (II) such
newly-designated Restricted Subsidiary is a Wholly-Owned Subsidiary of
Xxxxxxx in which Xxxxxxx has made and may from time to time make
Investments, (III) Xxxxxxx is directly or indirectly entitled to
receive 100% of the Cash Flow From such newly-designated Restricted
Subsidiary and (IV) Xxxxxxx and such newly-designated Restricted
Subsidiary shall comply with the provisions of Section 9.2;
In the case of the redesignation of a Restricted Subsidiary as an Unrestricted
Subsidiary, following receipt of the aforesaid information and certificate in
form and substance satisfactory to the Agent and provided no Default or Event of
Default shall have occurred and be continuing, the Agent shall, on behalf of the
Lenders, release the redesignated entity from its liability as a guarantor under
the relevant Subsidiary Guarantee without having to consult with or obtain any
consent from the Lenders.
ARTICLE X
PREDISBURSEMENT CONDITIONS
SECTION 10.1 - PREDISBURSEMENT CONDITIONS
The obligation of the Lenders to make available to the Borrowers the initial and
subsequent Borrowings hereunder, is subject to and conditional upon each of the
following terms and conditions first having been satisfied:
10.1.1 CONDITIONS PRECEDENT TO INITIAL BORROWING: the agreement of each Lender
to make the initial Borrowing requested to be made by it under this
Agreement to the Borrowers is subject to and conditional on the
delivery to the Agent, in form and substance satisfactory to the Agent
and in sufficient numbers for distribution to each of the Lenders, of:
10.1.1.1 a duly executed copy of this Agreement,
10.1.1.2 a duly executed copy of the Subsidiary Guarantee of
ICI with respect to the obligations of Xxxxxxx
hereunder, to the fullest extent permitted by
Applicable Law (including step-up provisions),
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10.1.1.3 a duly executed Subsidiary Guarantee of ICI with
respect to the obligations of CII and any eventual
Additional Borrower hereunder,
10.1.1.4 a duly executed copy of the Subsidiary Guarantee of
CII with respect to the obligations of Xxxxxxx, ICI
and any eventual Additional Borrower hereunder,
10.1.1.5 a duly certified copy of the constating documents and
by-laws of each of the Credit Parties certified by a
Responsible Officer of the related Credit Party
accompanied by good standing or equivalent
certificates issued by the appropriate governmental
body of each relevant jurisdiction,
10.1.1.6 a duly certified copy of a resolution or resolutions
of the board of directors of each Credit Party
relating to the authority of each Credit Party to
execute and deliver and perform its obligations under
the Operative Documents to which it is a party and
all other instruments, agreements, certificates and
papers and other documents provided for or
contemplated by the said Operative Documents and the
manner in which and by whom the foregoing documents
are to be executed and delivered, certified by a
Responsible Officer of the relevant Credit Party,
10.1.1.7 a certificate of each Credit Party setting forth
specimen signatures of the individuals authorized to
sign on its behalf the Operative Documents to which
it is a party and the instruments, agreements,
certificates, papers and other documents provided for
or contemplated by the said Operative Documents,
10.1.1.8 certificates of compliance of the Director, Finance
or the Treasurer or, in his absence, another
Responsible Officer of each Borrower in form and
substance substantially as set forth in SCHEDULE "N",
10.1.1.9 certificates of insurance evidencing appropriate
insurance coverage as provided in Section 11.1.6,
together with a certificate from a Responsible
Officer of Xxxxxxx confirming that such insurance
coverage is in compliance with the provisions of
Section 11.1.6,
10.1.1.10 a certificate from a Responsible Officer of Xxxxxxx
to the effect that all necessary shareholder,
corporate, creditor, governmental and regulatory
approvals have been obtained,
10.1.1.11 a certificate from a Responsible Officer of Xxxxxxx
to the effect that the Operative Documents do not
violate, in any material respect, all federal,
provincial, state or local Applicable Laws,
10.1.1.12 evidence by way of pay out letters and transfer
instructions that, concurrently with the execution of
this Agreement, Xxxxxxx shall have repaid or made
arrangement to repay and cancel the Existing
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Facilities, and all existing Liens, other than
Permitted Encumbrances, shall have been released,
10.1.1.13 a certificate from a Responsible Officer of Xxxxxxx
to the effect that all material Guarantees of any of
the Credit Parties have been disclosed to the
Lenders,
10.1.1.14 the audited Consolidated and unconsolidated financial
statements of Xxxxxxx for the most recent fiscal
year,
10.1.1.15 pro forma financial projections in respect of the
Borrowers covering fiscal years 1998 through and
including fiscal year 2002,
10.1.1.16 evidence of the payment of all fees and expenses
contemplated herein, to the extent then owing,
10.1.1.17 the favourable opinion of Canadian Counsel to Xxxxxxx
and CII and of US Counsel as to the corporate status
and capacity of the Credit Parties, their authority
and legal right to enter into and perform their
obligations under the Operative Documents and, in the
case of the US Counsel, as to the validity, binding
effect and enforceability against CII of the
Operative Documents,
10.1.1.18 the favourable opinion of Counsel to the Lenders as
to the validity, binding effect and enforceability as
against the Credit Parties of the Operative
Documents, and as to such other matters as the
Lenders may reasonably require, and
10.1.1.19 such other documentation as may be reasonably
required by the Agent;
10.1.2 CONDITIONS PRECEDENT TO BORROWINGS FROM AN OVERDRAFT AND L/C LENDER:
the obligation of an Overdraft and L/C Lender to make any Borrowing
available to a Borrower under the Overdraft and L/C Facility is (in
addition to the other conditions for Borrowings as herein set forth)
subject to such Borrower having made arrangements satisfactory to the
relevant Overdraft and L/C Lender as to the setting up of one or more
accounts at the appropriate Branch of Account of such Overdraft and L/C
Lender and as to the issuance of Letters of Credit;
10.1.3 CONDITIONS PRECEDENT TO EACH BORROWING: the obligation of the Lenders
to make any Borrowing available to any Borrower is subject to the
following conditions:
10.1.3.1 the representations and warranties of the Credit
Parties contained in this Agreement shall be true and
correct as at each Drawdown Date, Conversion Date and
date of renewal of a form of Borrowing hereunder,
other than the representations and warranties set
forth in Section 2.1.8 (which shall be read as if
they referred to the most recent financial statements
of the Credit Parties delivered to the Agent pursuant
to Section 11.1.7),
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10.1.3.2 except in respect of a Loan under the Overdraft and
L/C Facility, the Agent shall have received the
timely notice of Borrowing required pursuant to
Section 3.7, 3.11, 5.1.2, 6.2 or 7.2.5, as
applicable, and
10.1.3.3 no Default or Event of Default shall have occurred
and be continuing (provided that if such Default or
Event of Default shall have been waived as provided
herein, such Default or Event of Default shall not be
deemed to exist or continue in respect of the
particular instance having been waived or during the
waiver period, as applicable).
10.1.4 CONDITIONS PRECEDENT TO BORROWINGS FOR ACQUISITIONS: the obligation of
the Lenders to make any Borrowing available to a Borrower to fund
Acquisitions or otherwise related to an Acquisition is subject to the
following documents and information (in addition to the other
conditions for Borrowings as herein set forth) having been provided to
the Lenders:
10.1.4.1 a description of the proposed Acquisition, together
with historical financial statements and a pro forma
balance sheet and income statement of the target
Person and its Subsidiaries,
10.1.4.2 a certificate of a Responsible Officer of Xxxxxxx to
the effect that, as of the date of such Acquisition
and on a Consolidated post-acquisition basis after
having given effect to the said Acquisition, there
shall be no Default or Event of Default, and
10.1.4.3 evidence that the provisions of Article IX, to the
extent then applicable, have been complied with.
SECTION 10.2 - WAIVER OF CONDITIONS PRECEDENT
The terms and conditions of Section 10.1 are inserted for the sole benefit of
the Lenders and may be waived by the Agent on behalf of the Lenders, in whole or
in part, with or without terms or conditions, in respect of all or any portion
of the Borrowings without prejudicing the rights of each of the Lenders to
assert such terms and conditions in whole or in part in respect of any other
Borrowing.
ARTICLE XI
COVENANTS OF THE BORROWER
SECTION 11.1 - AFFIRMATIVE COVENANTS OF THE BORROWER
While any amount remains outstanding under the Operative Documents or any of the
Lenders has any obligations under any of the Operative Documents or any Lender
shall have any Commitment hereunder, each Borrower covenants and agrees with the
Agent and each Lender that, unless otherwise consented to in writing by or on
behalf of the Lenders:
11.1.1 PAYMENT COVENANT: it will, and it will cause each of the other Credit
Parties to, duly and punctually pay all sums of money due and payable
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by it under the terms of this Agreement and any other Operative
Document at the times and places, in the currencies, and in the manner
specified;
11.1.2 CORPORATE EXISTENCE: it will, and it will cause each of the other
Credit Parties to, do or cause to be done all things necessary to keep
in full force and effect its corporate existence and all rights,
franchises, licences, approvals, privileges, consents and
qualifications to carry on its business or to own, lease or operate
property in each jurisdiction in which it carries on business or owns,
leases or operates property where the failure to do so could have a
Material Adverse Effect;
11.1.3 CONDUCT OF BUSINESS: it will, and it will cause each of the other
Credit Parties to:
(a) conduct its business in a proper and efficient manner, all in
accordance with normal industry standards,
(b) diligently maintain, repair, use and operate its property and
premises in a proper and efficient manner, all in accordance
with normal industry standards,
(c) maintain its physical material assets in good condition, such
that each asset may be used at all times for the purpose for
which it was intended, in each case with ordinary wear and
tear excepted, and
(d) obtain and maintain all licences, permits and regulatory
approvals required for the operation of their respective
businesses, except where the omission to do so could not have
a Material Adverse Effect;
11.1.4 COMPLIANCE WITH LAWS: it will, and will cause each of the other Credit
Parties to, comply in all material respects with all Applicable Laws
including, without limitation, ERISA and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of
1970 of the United States of America, except to the extent failure to
comply with such laws does not have a Material Adverse Effect;
11.1.5 PROMPT PAYMENT OF INDEBTEDNESS: it will, and it will cause each of the
other Credit Parties, to promptly pay and discharge when due:
(a) any Indebtedness outstanding,
(b) Taxes charged or attributable to it, and
(c) obligations which may result in Liens (other than Permitted
Encumbrances) on its assets;
unless (I) the relevant payment, Tax or obligation is being actively
and diligently contested in good faith by appropriate proceedings and
is adequately reserved against on its books in accordance with GAAP, as
applicable, but only until such time as a Lien resulting therefrom
attaches to any of its properties or assets and becomes enforceable
against any creditor of the Borrowers or the other Credit Parties, or
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(II) failure to comply with this Section 11.1.5 could not have a
Material Adverse Effect;
11.1.6 INSURANCE: it will:
(a) maintain and will cause each of the other Credit Parties to
maintain with financially sound, independent and reputable
insurers insurance upon all its buildings, plant and other
property and assets which are of an insurable nature, against
such liabilities and risks including, without limitation, all
risk property damage, business interruption and third party
liability insurance, in such amounts, with such deductibles,
subject to such exclusions and otherwise in such manner, that
adequately protects it and the other Credit Parties and as is
customary for companies carrying on businesses similar to that
being carried on by it or by the other Credit Parties, as the
case may be, and, if applicable, as may be required by
Applicable Law, or as otherwise may be reasonably requested by
the Majority Lenders;
(b) duly and punctually pay or cause to be paid the premiums and
other sums of money payable in connection with such insurance,
and
(c) promptly deliver to the Agent from time to time upon
reasonable request such information relating to the insurances
required to be maintained under this Section 11.1.6, including
the entire insurance policies or, at the discretion of the
Agent, insurers' certificates of insurance addressed to the
Agent confirming that such insurance is in effect;
11.1.7 FINANCIAL STATEMENTS AND INFORMATION: it will, and will cause each of
the other Credit Parties to, keep and maintain proper books of account
and other accounting records and it will furnish or cause to be
furnished to the Agent in such number as the Agent may reasonably
require for distribution to the Lenders:
(a) within 120 days after the end of each fiscal year, copies of
the audited Consolidated financial statements of each
Borrower, of the audited unconsolidated financial statements
of Xxxxxxx and of the audited financial statements of Xxxxxxx
on a modified Consolidated basis,, each as of the end of such
fiscal year, together with comparative figures for the
immediately preceding fiscal year, all prepared in accordance
with GAAP, consistently applied, in reasonable detail and
accompanied by the unqualified opinion thereon of the
Auditors,
(b) within 60 days after the end of each of the first three
quarterly accounting periods in each fiscal year, copies of
the Consolidated unaudited financial statements of each
Borrower and each other Credit Party, of the unconsolidated
unaudited financial statements of Xxxxxxx and of the unaudited
financial statements of Xxxxxxx on a modified Consolidated
basis, in each case prepared in accordance with GAAP,
consistently applied, as of the close of such quarter, setting
forth in comparative form the figures for the corresponding
periods of the previous fiscal year, and certified as to their
fair presentation by a Responsible Officer of each such Credit
Party,
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(c) within 60 days after the end of each quarterly accounting
period, a report signed by a Responsible Officer of Xxxxxxx
providing details (including book and market values of
disposed assets) as to all disposition of assets by any Credit
Party (otherwise than in the normal course of business) and
all purchases of assets within the period of 12 consecutive
months then ended, together with the amount of Tangible Net
Assets as at the end of such month, the whole so as to allow
the Agent to monitor the application of Section 11.2.2
relating to asset sales, such report to be in form and
substance acceptable to the Agent;
(d) concurrently with the financial statements referred to in
Sections 11.1.7(a) and 11.1.7(b), certificates of compliance,
signed by a Responsible Officer of each Borrower,
substantially in the form of SCHEDULE "N", certifying (I) that
the financial and other information contained therein is true
and correct in all material respects as of the date the
certificate is delivered to the Agent, (II) that the
Responsible Officer executing such certificate has no
knowledge of any Default or Event of Default, which is
continuing or, if such Responsible Officer does have knowledge
of any such Default or Event of Default, describing the
Default or Event of Default, including the date of its
commencement and any remedial action taken, (III) that the
Responsible Officer executing such certificate has no
knowledge of any Material Adverse Change which has not been
cured or waived in writing by or on behalf of the Lenders,
(IV) in the case of the certificate of compliance for Xxxxxxx,
compliance with, and the detailed calculation of, the
financial covenants set forth in Section 11.1.32, (V) for the
certificate of Xxxxxxx delivered annually, that the actual
amount of Capex incurred during the prior fiscal year is no
less than the amount required to be spent to maintain the
assets at existing level of operational efficiency, and (VI)
for the certificate of ICI delivered annually, the
calculations necessary for the Agent to monitor increases in
the amount of the Subsidiary Guarantee of ICI with respect to
the debts and liabilities of Xxxxxxx hereunder,
(e) within 120 days following the end of each calendar year, the
Annual Business Plan for the current calendar year, which
Annual Business Plan shall be in form and substance acceptable
to the Agent,
(f) promptly after the same are sent, copies of all financial
statements and material reports and other material disclosure
information which any of the Credit Parties makes public by
filings with applicable securities commissions or other
regulatory bodies or sends to its common or preferred
stockholders as a class, and
(g) promptly following the request therefor of the Agent or any
Lender, such other information relating to any of the Credit
Parties, including without limitation, information relating to
their financial or other condition, business, assets,
operations or prospects, as the Agent or any Lender may from
time to time reasonably request, in each case, in form and
substance and certified in a manner satisfactory to the
requesting Agent or Lender;
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11.1.8 CHANGE IN AUDITORS: it will promptly give notice to the Agent of a
change in its Auditors and the reasons underlying the change;
11.1.9 MATERIAL CONTRACTS: it will, and will cause each of the other Credit
Parties to:
(a) faithfully observe, perform and discharge the covenants,
conditions and obligations imposed on it by any Material
Contract,
(b) do all things necessary or expedient in order to (I) maintain
each Material Contract in full force and effect and (II)
ensure that each such Material Contract remains the legal,
valid and binding obligation of each party thereto enforceable
in accordance with its terms,
(c) enforce each such Material Contract in accordance with its
terms and take all such action necessary to achieve such end,
(d) upon request of the Agent, make to each other party to each
Material Contract such demands and reports for information and
reports for action as the Borrower or any of the other Credit
Parties is entitled to make thereunder,
in each case, except to the extent that any failure to do so, either
taken individually or in aggregate with any other failure could not
reasonably be expected to have a Material Adverse Effect;
11.1.10 NOTICE OF DEFAULT AND OTHER EVENTS: it will promptly, after obtaining
knowledge thereof, give notice to the Agent of the occurrence of any
Default or Event of Default, including the date of its commencement and
the action which it proposes to take with respect to the same and the
estimated date when the same will be remedied or resolved; it will also
promptly after the occurrence of any event or circumstance which has
had or is reasonably likely to have a Material Adverse Effect, notify
the Agent of the details thereof;
11.1.11 NOTICE OF BREACH OF PERMIT: it will give prompt written notice to the
Agent of any breach of any certificate, approval, permit, consent,
order or direction concerning the installation or operation of any of
its machinery, equipment or facility or machinery, equipment or
facility of any of the other Credit Parties or concerning any
structure, activity, or facility on any of its lands or premises or
the lands or premises of any of the other Credit Parties, which
breach could have a Material Adverse Effect;
11.1.12 NOTICE OF LITIGATION: it will promptly give notice to the Agent of
the occurrence of any litigation, proceeding or dispute affecting it
or any of the other Credit Parties if its result could reasonably be
expected to have a Material Adverse Effect and will from time to time
provide all reasonable information requested by the Agent concerning
the status of litigation, proceeding or dispute involving the
Borrower or any of the other Credit Parties;
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11.1.13 ACCESS: it will, and will cause each of the other Credit Parties to,
permit the Agent or representatives of the Agent, at the Borrowers'
expense, to inspect their properties and make abstracts from and
copies of its books, accounts and records and discuss their affairs
with their management and Auditors, all at such reasonable times as
such Person may desire upon giving prior reasonable notice;
11.1.14 RELIANCE: it will permit the Agent and each Lender to rely on the
authority of the individuals providing any certificate, report,
notices and other information delivered under any of the Operative
Documents including, without limitation, the certificate delivered
under Section 11.1.7(c), until notice to the contrary is received by
the Agent;
11.1.15 GRANT OF SUBSIDIARY GUARANTEES: Xxxxxxx will cause all Restricted
Subsidiaries to grant their respective Subsidiary Guarantees, to the
fullest extent permitted by Applicable Law, within the time period
and with all supporting documentation as set forth in Section 9.2;
and once a Subsidiary Guarantee has been granted, each Borrower shall
ensure that such Subsidiary Guarantee remains in full force and
effect until the termination of the Credit Facilities, unless earlier
released following a redesignation of such Restricted Subsidiary as
an Unrestricted Subsidiary in accordance with the provisions of
Section 9.3;
11.1.16 CASH FLOW FROM RESTRICTED SUBSIDIARIES: it will at all times cause
each of the Restricted Subsidiaries to make all its Distributions to
Xxxxxxx or to another Restricted Subsidiary, so as to ensure that
Xxxxxxx shall at all times be fully entitled to 100% of all Cash Flow
from all Restricted Subsidiaries;
11.1.17 INTELLECTUAL PROPERTY: it will, and it will cause each of the other
Credit Parties to, make application to register its material patents,
trade-marks, service marks, trade names, copyrights and other
intellectual property rights, as is appropriate in its best
interests, and use its reasonable efforts to preserve and maintain
all of such intellectual property rights, as is appropriate in its
best interests;
11.1.18 TREASURY CONTRACTS: it shall, and shall cause each of the other Credit
Parties to, monitor, at all times and in a reasonable manner, currency
exchange rate, interest rate and commodity price changes applicable to
its business; it shall also ensure that all purchases of derivatives
and hedging instruments by any Credit Party will be solely for the
purpose of hedging interest rates, commodity and foreign exchange
exposure, and not for the purpose of speculation; more particularly, it
will not, nor will it allow or suffer any of the other Credit Parties
to, engage in any transaction involving options or futures contracts or
any similar speculative transactions (including, without limitation,
take-or-pay-contracts) where, at the time the relevant transaction is
entered into, the relevant Credit Party does not have or expect to have
a present or future underlying asset or cash position, the value of
which is sufficient to cover its liabilities under any such
transaction;
11.1.19 SUPPLEMENTAL DISCLOSURE: the Borrower will promptly supplement each
Schedule with respect to any matter arising after the Formal Date
which, if existing on or before the Formal Date, would have been
required to be set out or described in such Schedule or which is
necessary to correct any information in such Schedule which has been
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rendered inaccurate in any material respect after the Formal Date;
provided, however, that such supplemental disclosure shall not
constitute a cure or waiver of any Default or Event of Default
arising or existing as a result of the matter so disclosed;
11.1.20 TRANSACTIONS WITH AFFILIATES: it will conduct and cause each of the
other Credit Parties to conduct, all transactions otherwise permitted
under the Operative Documents with any of their Affiliates on terms
that are fair and reasonable and no less favourable to the Borrowers
or the other Credit Parties than it would obtain in a comparable
arm's-length transaction with a Person not an Affiliate;
11.1.21 CANADIAN BENEFIT AND PENSION PLANS AND ERISA: it will and will cause
the other Credit Parties to perform, in a timely fashion, all
obligations to which they may become subject under all Applicable
Laws, including the ITA and ERISA, as well as under the regulations
or rules issued thereunder, in respect of their Canadian Pension
Plans, Canadian Benefit Plans and Plans, except where the failure to
do so could not have a Material Adverse Effect;
11.1.22 ENVIRONMENTAL MATTERS: it (A) shall be, and cause the other Credit
Parties to be, at all times in compliance in all material respects
with all applicable Environmental Laws and (B) shall ensure, and
shall cause the other Credit Parties to ensure, that the Properties
are free from material contamination by a release, discharge or
emission of any Hazardous Material or of any other substance which
poses a threat or nuisance to safety, health or the environment and
that all underground storage tanks, land fills, land disposals and
dumps contained on the Properties are in compliance in all material
respects with Environmental Laws, except where the failure to do so
could not have a Material Adverse Effect;
11.1.23 ENVIRONMENTAL AUDIT REPORTS: (A) it will, and will cause the other
Credit Parties to, notify the Agent of any internal environmental audit
it conducts or, as the case may be, the other Credit Parties conduct,
and provide the Agent, on request, with copies (in such number as the
Agent shall reasonably request) of any such internal environmental
audits and (B) if the Majority Lenders, acting reasonably, believe that
an environmental audit should be conducted following the receipt by any
of a Borrower or the other Credit Parties of any environmental notice
from a governmental authority or following a change in Environmental
Laws or other event, the Borrowers shall provide or cause to be
provided at the request of the Agent environmental audit reports
concerning the property or operations affected by such notice, change
or event, which reports will be produced internally or, at the request
of the Agent following a review of such internal reports or failing the
remittance thereof, by independent qualified engineers or environmental
consultants, which reports will be at the expense of the Borrowers and
must prove satisfactory to the Agent acting reasonably;
11.1.24 REMEDIAL ACTIONS IN THE EVENT OF ENVIRONMENTAL DAMAGE: it will, and
will cause the other Credit Parties to, make or take all appropriate
investigations, studies, sampling and testing, and undertake any
clean-up, removal, remedial or other actions in accordance with the
requirements of all applicable Environmental Laws, to the reasonable
satisfaction of the Lenders in accordance with orders and directives of
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all governmental authorities in the event of any escape, seepage,
leakage, spillage, discharge, emission or release of any Hazardous
Materials on, or contamination of, the property owned or operated by
any of a Borrower or the other Credit Parties or (if there may result
therefrom any material liability on the part of any Borrower or other
Credit Parties or the Agent or the Lenders) any other property where
any Borrower or other Credit Parties have conducted any of their
operations or where may be located assets sold by any of them;
11.1.25 AGENT'S RIGHT TO ENTER ONTO THE PROPERTY: in the event the Borrowers
fail to comply with the provisions of Section 11.1.22 or 11.1.24
hereof, it will permit the Agent or its representatives or agents on
reasonable notice and at the Borrowers' expense to enter onto the
Properties to conduct an environmental inspection and it will permit
the Agent or its representatives or agents to take, at the Borrowers'
expense, such action as may be deemed necessary to remedy any
environmental damage or breach of any Environmental Laws;
11.1.26 KEEPING OF BOOKS: it will keep and cause each of the other Credit
Parties to keep, proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the
assets and business of the Borrowers and each such Credit Party in
accordance with GAAP;
11.1.27 MAINTENANCE OF PROPERTIES, ETC: it will maintain and preserve, and
cause each of the other Credit Parties to maintain and preserve, all of
its properties that are used or useful in the conduct of its business
in good working order and condition, ordinary wear and tear excepted.
11.1.28 MILLENNIUM COMPLIANCE: it will, and will cause the other Credit Parties
to keep under review their operations with a view of assessing their
Computer Systems, and take all reasonable action necessary, to ensure
that, before September 30, 1999:
(a) their Computer Systems will be Millennium Compliant,
(b) their Computer Systems will not require any remedial work or
replacement to enable them (or any part of them) to continue
functioning accurately immediately before, during and after
January 1, 2000 in the manner set forth in the definition of
"Millennium Compliant", and
(c) the Computer Systems and each element of them will pass and
continue to pass date information between each other (and any
third parties' computer systems with which they regularly
communicate) in a way which does not, and will not, create
inaccuracies, errors or problems immediately before, during
and after January 1, 2000,
and, in this connection, each Borrower shall, from time to time at the
Agent's request, provide to the Agent and the Lenders reasonable
assurance as to the foregoing;
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11.1.29 USE OF FUNDS: it undertakes to use the proceeds of Borrowings
hereunder solely for the purposes set forth in Section 3.6, but
subject to the limitations contained in Section 11.2.8;
11.1.30 REGISTRATION OF LIEN DISCHARGES: it shall cause all Liens which are
not Permitted Encumbrances to be fully discharged by way of
appropriate registrations or filings at the latest by the expiry of
the periods set forth in this respect in SCHEDULE "E";
11.1.31 NOTIFICATION OF CERTAIN EVENTS: in addition to the notices required
by Sections 11.1.10, 11.1.11 and 11.1.12 and certain other
provisions of this Agreement, it will promptly notify the Agent
(which will forward the information to the Lenders) of:
(a) any Change of Control of Xxxxxxx,
(b) any change in the ownership of ICI or CII, and
(c) any sale, transfer or other disposition by the Borrowers
and the other Credit Parties during any period of 12
consecutive months, of assets having an aggregate book
value or market value (whichever is greater) in excess of
10% of Tangible Net Assets, as contemplated by Section
11.2.2(b),
and, in each such instances, it will also provide promptly to the Agent
all details relating to the event in question and, at the Agent's
reasonable request, any other information related thereto;
11.1.32 FINANCIAL RATIOS: Xxxxxxx will maintain, at all times, on a modified
Consolidated basis, pursuant to which only Xxxxxxx and its Restricted
Subsidiaries are to be Consolidated (on the basis of calculations
effected at the end of each fiscal quarter of Xxxxxxx):
(a) an Interest Coverage Ratio of not less than 3.0 to 1.0,
calculated on a trailing basis for the period of four
consecutive fiscal quarters then ended, and
(b) a ratio of Net Funded Debt to Total Capitalization of not more
than 0.5 to 1.0.
SECTION 11.2 - NEGATIVE COVENANTS OF THE BORROWER
While any amount remains outstanding under the Operative Documents or any of the
Lenders have any obligations under any of the Operative Documents or any Lender
shall have any Commitment hereunder, each Borrower covenants and agrees with the
Agent and each Lender that:
11.2.1 NEGATIVE PLEDGE: it will not, nor will it allow or suffer any of the
other Credit Parties to, (A) assume, create, incur or suffer to exist
any Lien upon any of its undertaking, property, rights, revenues or
assets, whether now owned or hereafter acquired or (B) assign any
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accounts or other rights to receive income, in each case, save for
Permitted Encumbrances;
11.2.2 SALE OF ASSETS: it will not, nor will it allow or suffer any of the
other Credit Parties to, sell, alienate, assign, lease or otherwise
dispose of any of its property and assets, whether now owned or
possessed or hereafter acquired or possessed, or enter into any sale
and leaseback transaction with respect to any such property or assets,
or grant any option or other right to purchase, lease or otherwise
acquire any such property or assets, save for:
(a) sales, alienations, assignments, leases or other dispositions
of property and assets of the Borrowers and the other Credit
Parties in the ordinary course of business and for the purpose
of carrying on the same,
(b) sales, alienations, assignments, leases or other dispositions
of property and assets among Xxxxxxx, CII and/or ICI,
(c) the transactions outlined in SCHEDULE "O",
(d) sales, alienations, assignments, leases or other dispositions
by the Borrowers and the other Credit Parties during any
period of 12 consecutive months, of assets having an aggregate
book value or market value (whichever is greater) of up to 10%
of Tangible Net Assets (computed as of the end of such period
of 12 months), and
(e) sales, alienations, assignments, leases and other disposition
(including, by way of clarification, any expropriation) by the
Borrowers and the other Credit Parties during any period of 12
consecutive months, of assets (including, by way of
clarification, Capital Stock) having an aggregate book value
or market value (whichever is greater) in excess of 10% of
Tangible Net Assets, PROVIDED THAT, at the latest on the last
day of each such period of 12 consecutive months, (I) the net
proceeds of all such transactions in excess of 10% of Tangible
Net Worth in such period of 12 consecutive months (the "EXCESS
PROCEEDS") shall be used by the Credit Parties to purchase
assets of equivalent value, or (II) failing such purchase of
replacement assets with all of the said Excess Proceeds, the
Term Facility Total Commitment and the Revolving Facility
Total Commitment shall, on the last day of the said 12 month
period, be permanently reduced and cancelled (in the following
order: FIRSTLY, the Term Facility Total Commitment, in inverse
order of maturity, until reduced to zero and fully terminated,
and SECONDLY, the Revolving Facility Total Commitment) by an
amount equal to the Excess Proceeds or such portion thereof
which has not been used to purchase replacement assets within
the said period of 12 months. In the event that the Term
Facility Total Commitment or the Revolving Facility Total
Commitment are reduced as aforesaid, the Borrowers shall
timely make all necessary repayments of Borrowings hereunder
so as to ensure that Borrowings outstanding under the Term
Facility and the Revolving Facility never exceed the Term
Facility Total Commitment and the Revolving Facility Total
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Commitment as so reduced; and Xxxxxxx shall periodically
provide reports on such transactions as set forth in Section
11.1.7(c);
11.2.3 INVESTMENTS IN OTHER PERSONS: it will not, nor will it allow or suffer
any of the other Credit Parties to, make or hold any Investment in any
Person other than:
(a) Investments by the Borrowers and the other Credit Parties in
their Subsidiaries,
(b) Investments by the Borrowers and the other Credit Parties in
joint ventures or other Persons in which the value of the
Investments and the participatory interest or Capital Stock
held by the Credit Parties would represent 50% of all
Investments and participatory interest or Capital Stock held
therein by the joint venturers,
(c) loans, advances, Guarantees and other forms of financial
assistance to Unrestricted Subsidiaries and other Persons if
made in the ordinary course of business and in an aggregate
amount not to exceed Cdn$20,000,000 or the Equivalent Amount
in US Dollars during the entire Commitment Period,
(d) Investments by the Borrower in hedging agreements permitted or
required to be entered into under Section 11.1.18;
11.2.4 INDEBTEDNESS FOR BORROWED MONEY OF THE RESTRICTED SUBSIDIARIES: it will
not allow or suffer any of the Restricted Subsidiaries to incur any
Indebtedness in respect of money borrowed or raised, except for
Borrowings under this Agreement and intercompany borrowings among the
Credit Parties;
11.2.5 NO MODIFICATION TO CORPORATE STRUCTURE: it will not, nor will it allow
or suffer the corporate structure of the Credit Parties to be modified,
nor will it allow or suffer (A) ICI or CII to cease being Wholly-Owned
Subsidiaries of Xxxxxxx, except with the prior consent of all Lenders
or (B) the other Restricted Subsidiaries to cease being direct or
indirect Wholly-Owned Subsidiaries of Xxxxxxx, except with the prior
consent of the Majority Lenders;
11.2.6 NO ACQUISITION OF UNRELATED BUSINESS: it will not, nor will it allow or
suffer any of the other Credit Parties to make at any time any
Acquisition in any business which is unrelated to their current
business; and for this purpose, an Acquisition will be deemed to be in
an unrelated business if it is not related to the paper tissue
business;
11.2.7 DISTRIBUTIONS: Xxxxxxx will not declare, make or pay any Distributions
if an Event of Default has occurred and has not been waived, or if such
Distribution could reasonably be expected to bring about an Event of
Default;
11.2.8 UNAUTHORIZED USES OF THE CREDIT FACILITIES: it will not use the Credit
Facilities or any proceeds of Borrowings to:
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(a) fund a joint venture or any need, obligation or commitment of
a joint venture in an amount or in a proportion greater than
such Borrower's proportionate interest in such joint venture,
(b) finance Hostile Acquisitions, or
(c) purchase, or carry, or to reduce or retire or refinance any
credit incurred to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or
carrying any Margin Stock;
11.2.9 NO CHANGE IN NATURE OF BUSINESS OR IN USE OF PROPERTIES: it will not,
and it will ensure that none of the other Credit Parties, (A) change
the nature of its respective business and (B) modify, in any material
respect or other than as set forth in the Annual Business Plan, the use
of the Properties, in each case, as carried on or used on the date
hereof;
11.2.10 NO IMPAIRMENT OF UPSTREAMING: it will not, nor will it allow or suffer
any of the other Credit Parties to, directly or indirectly, enter into,
assume or be bound by any agreement, instrument, indenture or other
obligation (other than any Operative Document) which could directly or
indirectly restrict, prohibit or require the consent of any Person with
respect to the payment of dividends or other Distributions or the
making of intercompany loans by any such Credit Party to the Borrowers;
11.2.11 FINANCIAL YEAR: it will not, nor will it allow or suffer any of the
other Credit Parties to, change its financial year, except for a change
thereof to a financial year-end identical to that of Xxxxxxx; and
11.2.12 ACCOUNTING CHANGES: it will not, nor will it allow or suffer any of the
other Credit Parties to, make any change in accounting policies,
accounting treatment or reporting practices, except for changes
required by GAAP and concurred with by the Auditors of the Borrowers.
ARTICLE XII
REIMBURSEMENT OF EXPENSES AND INDEMNITY
SECTION 12.1 - REIMBURSEMENT OF EXPENSES
All statements, reports, certificates, opinions and other documents or
information required to be furnished to the Agent or any Lender by any Credit
Party under this Agreement and the other Operative Documents shall be supplied
without cost to the Agent or the Lenders. Furthermore, whether or not any of the
transactions contemplated herein are consummated, the Borrowers solidarily agree
to reimburse promptly to the Agent for itself and on behalf of the Arranger and
the Lenders on demand, all of the reasonable fees, costs and expenses of the
Agent's Counsel and all of the Agent's and the Arranger's other reasonable fees,
costs and other out-of-pocket expenses (including transportation, computer,
duplication, appraisal, audit, insurance, consultant, notaries and search, and
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all tax on goods and services) incurred from time to time in the preparation,
negotiation, execution and registration, if applicable, of the Operative
Documents and the related documents, and in considering and making amendments
to, or waivers, releases or discharges in respect of, the Operative Documents
(whether or not such amendments, waivers, releases or discharges are completed
or carried into effect) and, after discussion with Xxxxxxx, in respect of any
other matter, together with all reasonable expenses incurred in the due
diligence and syndication (including printing, distribution and bank meetings)
in connection with the Credit Facilities. In addition, each Borrower agrees to
pay all of such legal fees, costs and expenses (and tax on goods and services in
respect thereof) of the Agent and each of the Lenders incurred in the
enforcement of the Operative Documents and of any other document to be executed
and issued as provided herein and in the other Operative Documents.
The Borrowers will reimburse the Agent and the Lenders within 30 days after
written request is made, with interest after such ten day period at a rate per
annum equal to the Prime Rate plus the Applicable Margin for Prime Rate Loans at
such time increased by 2% per annum in the case of monies owing in Canadian
Dollars and at a rate per annum equal to the US Base Rate plus the Applicable
Margin for US Base Rate Loans at such time increased by 2% per annum in the case
of monies owing in US Dollars to a Canadian Lender and at a rate per annum equal
to the Base Rate plus the Applicable Margin for Base Rate Loans at such time
increased by 2% per annum in the case of monies owing in US Dollars to a US
Lender, for any and all expenditures which the Agent or the Lenders may from
time to time make, lay out or expend pursuant to this Section 12.1 and in
providing such protection in respect of insurance, discharge of Liens, Taxes,
dues, assessments, governmental charges, fines and penalties lawfully imposed,
repairs, Counsel's fees and other matters as the Credit Parties are obligated in
the Operative Documents to provide, but fail to provide after written request is
made. Such obligations to reimburse the Agent and the Lenders shall be an
additional Indebtedness due from the Borrowers and shall be payable by the
Borrowers within 30 days of demand. The Agent and the Lenders though privileged
so to do, shall be under no obligation to the Borrowers to make any such
expenditure and the making thereof by the Agent or Lender shall not relieve any
Borrower of any default in that respect.
SECTION 12.2 - INDEMNITY
Whether or not a Default or an Event of Default has occurred, the Borrowers
solidarily covenant and undertake to indemnify, defend, protect and hold
harmless the Agent, the Arranger and each of the Lenders and their respective
directors, officers, employees, Counsels, attorneys-in-fact, trustees, advisors
and agents (collectively, the "INDEMNITEES") against and from all losses,
damages (including punitive damages), expenses, liabilities, obligations,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
(including reasonable Counsels' and consultants' fees and disbursements)
(hereinafter, "LOSSES") which any Indemnitee may sustain or incur (including,
without limitation, any loss of profit and expenses a Lender may incur (A) by
reason of the liquidation, re-employment or redeployment of deposits or other
funds acquired by such Lender to fund or to maintain the Borrowings or (B) by
reason of any interest, charges or other amounts paid or payable by a Lender to
providers of funds borrowed or acquired in order to make, to fund or to maintain
the Borrowings or any amount unpaid by the Borrower hereunder) as a consequence
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of or in connection with (including, without limitation, in connection with any
investigation, litigation or proceeding or preparation of a defence in
connection therewith):
12.2.1 the Credit Facilities and any use made or proposed to be made with the
proceeds thereof,
12.2.2 any failure of a Borrower to timely provide a conversion or renewal
notice when required in respect of any Borrowing pursuant to the terms
hereof,
12.2.3 any failure of a Borrower to borrow in the amount and on the date
specified therefor in any notice of Borrowing pursuant to this
Agreement,
12.2.4 any failure of a Borrower to make a payment, repayment, prepayment or
conversion specified in a notice of repayment, prepayment or conversion
hereunder, or when otherwise due hereunder,
12.2.5 the payment by a Borrower of principal amounts in respect of a Libor
Loan or a Bankers' Acceptance on any day other than the last day of the
related Libor Interest Period or other than the date of maturity of
such Bankers' Acceptance, as the case may be,
12.2.6 any misrepresentation by a Credit Party contained in or delivered in
writing in connection with the Operative Documents,
12.2.7 the issuance of any Letter of Credit as contemplated herein or the
acceptance of drafts or documents thereunder; or any false or
incomplete information being provided by or on behalf of any Credit
Party to the Overdraft and L/C Lender in respect of Letters of Credit
or acceptances thereunder; or any action taken, admitted or suffered to
be taken in good faith in reliance upon any instructions, L/C
Applications, request or order from any Credit Party or any other
Person for whose account a Letter of Credit was issued or upon any
paper, documents or teletransmission reasonably believed by the
Overdraft and L/C Lender to be genuine in connection with a Letter of
Credit or acceptances or documents under a Letter of Credit issued as
contemplated herein; or, in the case of teletransmissions, any
insufficient or incorrect particulars being transmitted or mistakes or
errors in transmission or delivery; or any of the matters contemplated
by the provisions of Sections 6.4, 6.5 and 6.6,
12.2.8 the occurrence of a Default or an Event of Default,
12.2.9 defending and/or counterclaiming or claiming over against third parties
in respect of any action or matter in connection with or relating to
the Operative Documents, or
12.2.10 the actual or alleged presence of Hazardous Materials on, under or in
any Properties or the escape, seepage, leakage, spillage, discharge,
emission or release from, any Property or into or upon any land, the
atmosphere, or any watercourse, body of water or wetland, of any
Hazardous Materials or any Environmental Claim relating to the Borrower
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or any of its Subsidiaries or any of the Properties or arising out of
the use of any of the Properties,
in each case, except to the extent such Losses are found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnitee's gross negligence or wilful misconduct;
In the case of an investigation, litigation or proceeding to which the indemnity
described in this Section 12.2 applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by any of
the Borrowers, their respective shareholders, Affiliates or creditors or an
Indemnitee or an Indemnitee is otherwise a party thereto. Each Borrower further
agrees that no Indemnitee shall have any liability (whether direct or indirect,
in contract or tort or otherwise) to a Borrower or any of its Subsidiaries or
Affiliates or their respective security holders or creditors arising out of,
related to or in connection with the Credit Facilities, except for direct, as
opposed to consequential or punitive, damages determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnitee's gross negligence or wilful misconduct.
SECTION 12.3 - CONSULTATION WITH BORROWER
In connection with any claim made by a third party for which an Indemnitee is
entitled to indemnification pursuant to Section 12.2, such Indemnitee agrees,
before settling or compromising any such claim, to consult in good faith with
the Borrowers and the Agent regarding any comments or considerations that either
of them may have, it being understood that (I) such Indemnitee shall retain the
right, at its sole discretion, to settle or compromise any such claim and (II)
any consultation among such Indemnitee, the Borrowers and the Agent or any
failure to so consult shall in no way relieve or reduce the Borrowers'
obligations to indemnify such Indemnitee pursuant to Section 12.2.
SECTION 12.4 - SURVIVAL OF INDEMNIFICATION OBLIGATIONS
Without prejudice to the survival or termination of any other agreement of the
Borrowers under the Operative Documents, the provisions of and undertakings and
indemnification set forth under Sections 12.1 and 12.2 shall survive the payment
of principal and interest on all Borrowings, the termination of the Aggregate
Commitment and the satisfaction of all liabilities owed to the Agent and the
Lenders pursuant to the Operative Documents.
ARTICLE XIII
OTHER TAXES
SECTION 13.1 - OTHER TAXES
Each Borrower covenants and agrees that it will pay any documentary, stamp or
other Taxes (including interest and penalties) which may be payable or
determined to be payable by any governmental or taxation authority in respect of
the execution and delivery of the Operative Documents, including the Bankers'
Acceptances and Letters of Credit and acceptances thereunder or the performance
of the terms and provisions of the Operative Documents, and will save the Agent
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and the Lenders harmless against any loss or liability resulting from
non-payment or delay in payment of any such documentary, stamp or other Taxes.
SECTION 13.2 - SURVIVAL OF OBLIGATIONS
The obligation of the Borrowers under Section 13.1 to pay the Taxes referred to
therein shall, if such taxes have not been paid, survive the payment of
principal and interest on all Borrowings, the termination of the Aggregate
Commitment and the satisfaction of all liabilities owed to the Agent and the
Lenders pursuant to the Operative Documents.
ARTICLE XIV
EVENTS OF DEFAULT
SECTION 14.1 - EVENTS OF DEFAULT
The occurrence of any one or more of the following events or circumstances shall
constitute an Event of Default under this Agreement:
14.1.1 FAILURE TO PAY: if any Borrower or any Credit Party, as the case may
be, fails to make a payment of any sum payable hereunder when the same
shall become due and payable and, except in the case of payments of
principal, such default shall continue for three calendar days;
14.1.2 BREACH OF FINANCIAL RATIOS: if a Credit Party breaches any covenant
contained in Section 11.1.32;
14.1.3 OTHER BREACHES: if a Credit Party fails to carry out or observe any
covenant or condition contained in this Agreement (other than under
Section 11.1.1 or Section 11.1.32) or in any other Operative Document,
to be observed or performed by such Credit Party and such failure, if
capable of being cured, shall remain uncured for a period of ten days
following notice by a Lender;
14.1.4 BANKRUPTCY: the occurrence of any Act of Bankruptcy (as defined below);
for the purposes of this Section 14.1.4, an "ACT OF BANKRUPTCY" means
any of the following:
(a) any Credit Party admits in writing its inability to pay its
debts generally as they become due,
(b) any Credit Party makes a general assignment for the benefit of
creditors,
(c) any Credit Party becomes subject to any bankruptcy proceedings
which it is not contesting in good faith, diligently and by
appropriate means or which proceedings continue undischarged,
unstayed or undismissed for a period of 45 days,
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(d) any Credit Party submits to or makes any application for the
purpose of suspension of payment of its liabilities,
(e) any Credit Party petitions to or applies to any tribunal or
authority for the appointment of any administrator, receiver,
trustee or intervenor for it or for any substantial part of
its property,
(f) any Credit Party commences or has commenced against it any
proceedings (including a notice of intention or a proposal
under the BANKRUPTCY AND INSOLVENCY ACT (Canada) and including
any proceeding under the COMPANIES CREDITORS' ARRANGEMENT ACT
(Canada) or the US BANKRUPTCY CODE) under any law, statute,
regulation or decree whether now or hereafter in effect,
relating to it or its debt, reorganization, arrangement,
adjustment, dissolution or liquidation, which proceedings it
is not contesting in good faith, diligently and by appropriate
means or which proceedings continue undischarged, unstayed or
undismissed for a period of 45 days,
(g) any Credit Party becomes bankrupt within the meaning of the
BANKRUPTCY AND INSOLVENCY ACT (Canada) or the US Bankruptcy
Code, or any successor or equivalent legislation,
(h) any Credit Party by any act indicates its consent to, approval
of, or acquiescence in any bankruptcy, reorganization or
insolvency proceeding under any law relating to bankruptcy,
insolvency or relief of debtors or any proceeding for the
appointment of a receiver or trustee for itself or for any
substantial part of its property or suffers any such
receivership or trustee to remain undischarged for a period of
45 days,
(i) the directors or shareholders of the Borrower pass a
resolution for the winding-up or dissolution of a Borrower, or
a Borrower instigates proceedings for its winding-up or
dissolution or consents to, approves of or acquiesces in, any
filing or petition with respect to such proceedings;
14.1.5 SEIZURE: if an encumbrancer takes possession of any part of the assets
of any Credit Party having an aggregate value in excess of
Cdn$20,000,000, or if a seizure, distress or execution or any similar
process is levied or enforced thereagainst and remains unsatisfied for
a period of 20 days, in respect of movable or personal property or 30
days, in respect of immovable or real property;
14.1.6 JUDGMENT: (A) if a final judgment or order of a court for the payment
of money in excess of Cdn$20,000,000 or the equivalent in any other
currency is rendered against any Credit Party and is not paid or
discharged within ten days or enforcement action shall be taken in
respect thereof, or (B) any non-monetary judgment or order shall be
rendered against any Credit Party that could have a Material Adverse
Effect, and there shall be any period of ten consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or;
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14.1.7 INVALIDITY OR UNENFORCEABILITY: if at any time a court of competent
jurisdiction makes any judgment or order or any law, ordinance, decree
or regulation is enacted, the effect whereof is to render any Operative
Documents or any material provision hereof or thereof, invalid or
unenforceable, unless in the case of a judgment or order, a stay of
enforcement of such judgment or order is immediately obtained;
14.1.8 CROSS-DEFAULT: if any Credit Party fails to pay upon demand, in the
case of monies payable on demand, or at maturity, or within any
applicable period of grace, any Indebtedness in respect of monies
borrowed, raised or guaranteed in an amount in excess of Cdn$20,000,000
or the equivalent in other currencies, or fails to observe or perform
any term, covenant or agreement contained in any agreement by which it
is bound evidencing or securing monies borrowed, raised, or guaranteed
in an amount in excess of Cdn$20,000,000 or the equivalent thereof in
other currencies and, as a result, the holder or holders, or
beneficiary or beneficiaries, thereof or of any such obligations issued
thereunder cause or are entitled to cause the acceleration of the
maturity thereof or of any such obligation;
14.1.9 TREASURY CONTRACTS: if any currency or interest rate exchange agreement
or other financial swap or derivative transaction entered into by any
Credit Party with any financial or brokerage institution is terminated
prior to its scheduled maturity as the result of such Credit Party's
inability to meet its obligations in respect thereof;
14.1.10 CEASING TO CARRY ON BUSINESS: if a Credit Party ceases or threatens to
cease to carry on in the ordinary course its business or a substantial
part thereof, except as the result of a reorganization permitted by the
Majority Lenders;
14.1.11 REPRESENTATIONS AND WARRANTIES: if any representation or warranty made
by any Credit Party in any of the Operative Documents or in any
document or certificate furnished to an Agent or Lender in connection
therewith or pursuant thereto shall prove at any time to have been
incorrect in any material respect, as at the date made or confirmed or
deemed to have been made or confirmed;
14.1.12 CHANGE OF CONTROL: (A) if a Change of Control of Xxxxxxx occurs, or (B)
if either of ICI or CII ceases to be a Wholly-Owned Subsidiary of the
Borrower;
14.1.13 SUBSIDIARY GUARANTEE: if any of the Subsidiary Guarantees ceases for
any reason to be in full force and effect at any time, or any Credit
Party shall so state in writing or shall give notice of termination of
or otherwise attempt to terminate its Subsidiary Guarantee, except as a
result of the redesignation of such Restricted Subsidiary as a
Non-Restricted Subsidiary in conformity with the provisions hereof, and
such event (provided it can be remedied) is not remedied within ten
days from notice thereof by the Agent or a Lender to a Borrower,
PROVIDED THAT if a Borrower does not, immediately following such
notice, actively do all actions and things as is necessary to remedy
the situation, such event shall immediately constitute an Event of
Default;
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14.1.14 ERISA EVENT: any ERISA Event shall have occurred with respect to a Plan
and the sum (determined as of the date of occurrence of such ERISA
Event) of the Insufficiency of such Plan and the Insufficiency of any
and all other Plans with respect to which an ERISA Event shall have
occurred and then exist (or the liability of the Credit Parties and the
ERISA Affiliates related to such ERISA Event) exceeds US$20,000,000;
14.1.15 ERISA WITHDRAWAL LIABILITY: (A) any Credit Party or any ERISA Affiliate
shall have been notified by the sponsor of a Multiemployer Plan that it
has incurred Withdrawal Liability to such Multiemployer Plan in an
amount that, when aggregated with all other amounts required to be paid
to Multiemployer Plans by the Credit Parties and the ERISA Affiliates
as Withdrawal Liability (determined as of the date of such
notification), exceeds US$20,000,000 or requires payments exceeding
US$20,000,000 per annum, or (B) any Credit Party or any ERISA Affiliate
shall have been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganisation or is being terminated,
within the meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions of the
Credit Parties and the ERISA Affiliates to all Multiemployer Plans that
are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for
the plan years of such Multiemployer Plans immediately preceding the
plan year in which such reorganization or termination occurs by an
amount exceeding US$20,000,000;
14.1.16 ENVIRONMENTAL LIABILITY IN EXCESS OF CDN$20,000,000: any Hazardous
Materials shall be present in, on or under any real or immovable
property now or previously owned, operated, leased or occupied by any
Credit Party or any predecessor in title, or any Hazardous Materials
shall have been shipped to or disposed of in the United States of
America by any of the Credit Parties or any predecessor in title or any
Hazardous Materials shall have been used, generated, treated, stored,
recycled, reused or discharged from, in, on or under any real or
immovable property now or previously owned, operated, leased or
occupied by any of the Credit Parties or any predecessor in title, in
any case which could reasonably be expected to result in any liability
or obligation for any of the Credit Parties, including without
limitation, costs of any clean-up, remediation, decontamination,
restoration, cost recovery, contribution, indemnity or other action,
fines, penalties, natural resource damages or other damages payable to
any Person, in an aggregate amount in excess of Cdn$20,000,000 or the
Equivalent Amount in any other currency;
14.1.17 MATERIAL ADVERSE CHANGE: if a Material Adverse Change occurs;
14.1.18 GOVERNMENTAL ACTION: any governmental authority or Person acting or
purporting to act under governmental authority shall have taken any
action to condemn, seize or appropriate, or to assume custody or
control of, all or any substantial part of the property of any Borrower
or any other Credit Party (or any material portion thereof), or shall
have taken any action to displace the management of any Borrower or any
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other Credit Party or to curtail its corporate authority in the conduct
of the business of any Borrower, or any other Credit Party; or
14.1.19 CHANGE OF LAW: any Applicable Law necessary to enable the Borrowers to
perform their material obligations under the Operative Documents, shall
be repealed or revoked or shall otherwise cease to be in full force and
effect.
SECTION 14.2 - ACCELERATION
Upon the occurrence and during the continuance of any Event of Default, the
Agent on behalf of the Lenders may, and if so requested by the Majority Lenders
shall, declare the Aggregate Commitment to be terminated and reduced to zero and
thereby terminate the right of the Borrowers to apply for further Borrowings,
and in addition the Agent may, and if so requested by the Majority Lenders
shall, by written notice to the Borrowers declare all Indebtedness and
liabilities of the Borrowers outstanding to the Lenders and the Agent hereunder
to be immediately due and payable without presentation, demand, protest or other
notice of any kind, all of which are expressly waived by the Borrowers, provided
that the Aggregate Commitment and the right of any Borrower to apply for further
Borrowings shall automatically be terminated and all Indebtedness and
liabilities of the Borrowers to the Lenders and the Agent outstanding hereunder
shall be immediately due and payable without any written notice to the Borrowers
as provided above and without any other presentation, demand, protest or other
notice of any kind if an Event of Default has occurred in respect of any
Borrower pursuant to Section 14.1.4. In such event, the Borrowers shall pay
immediately to the Agent for the benefit of the Lenders and the Borrowers hereby
acknowledge that they shall be indebted to the Agent for the payment of all
amounts owing or payable under this Agreement together with the face amount of
all Bankers' Acceptances accepted by the Lenders and outstanding, as well as the
outstanding amount of all Letters of Credit issued hereunder and outstanding and
all acceptances thereunder, failing which all rights and remedies of the Agent
and the Lenders shall thereupon become enforceable and such payment to the Agent
when made shall be deemed to have been made in discharge of the Borrowers'
obligations hereunder, and the Agent shall distribute such proceeds among the
Lenders as provided herein. No Borrower shall have the right to set up as
against any of the Lenders or the Agent any defense or right of action, of
indemnification or of set-off or compensation or any similar claim of any nature
whatsoever which any Borrower may have had at any time or may have in the future
with respect to any holder of one or more Banker's Acceptance(s) or Discount
Note(s) issued hereunder or to any beneficiary or other Person in connection
with one or more Letters of Credit issued hereunder.
SECTION 14.3 - NOTICES
Save as otherwise expressly provided for herein, no notice or mise en demeure of
any kind shall be required to be given to any Borrower by the Agent or the
Lenders for the purpose of putting the Borrowers in default, the latters being
in default by the mere lapse of time allowed for the performance of an
obligation or by the mere happening of an event or circumstance constituting an
Event of Default.
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ARTICLE XV
REMEDIES
SECTION 15.1 - REMEDIES CUMULATIVE
Subject to Section 16.1 and for greater certainty, it is expressly understood
and agreed that the rights and remedies of the Lenders and the Agent under this
Agreement are cumulative and are in addition to and not in substitution for any
rights or remedies provided by law; any single or partial exercise by the Agent
or any Lender of any right or remedy for a default or breach of any term,
covenant, condition or agreement herein contained, shall not be deemed to be a
waiver of or to alter, affect or prejudice any other right or remedy or other
rights or remedies to which the Agent or any Lender may be lawfully entitled for
the same default or breach, and any waiver by the Agent or any Lender of the
strict observance, performance or compliance with any term, covenant, condition
or agreement herein contained, and any indulgence granted by the Agent or any
Lender, shall be deemed not to be a waiver of that or any subsequent default.
The Agent on behalf of the Lenders acting on the instructions of the Majority
Lenders, or failing such action by the Agent, the Majority Lenders, may, to the
extent permitted by Applicable Law, bring suit at law, in equity or otherwise
for any available relief or purpose including but not limited to (A) the
specific performance of any covenant or agreement contained in this Agreement,
or in any other document given pursuant to or incidental to this Agreement, (B)
an injunction against a violation of any of the terms thereof, (C) the exercise
of any power granted thereby or by law, or (D) obtaining and enforcing judgment
for any and all amounts due in respect of the Borrowings or amounts otherwise
due hereunder or under any documents given in connection with this Agreement.
ARTICLE XVI
WAIVER OF DEFAULT
SECTION 16.1 - WAIVER OF DEFAULT
(a) If at any time after the occurrence of an Event of Default, the
Borrowers offer to cure completely all Events of Default and to pay all
expenses, advances and damages to the Agent on behalf of the Lenders
consequent on such Event of Default, with interest at the rates then
applicable to the respective outstanding Borrowings, then the Agent on
behalf of the Lenders may, but shall not be obligated to, accept such
offer and payment, but such action shall not affect any subsequent
Event of Default or impair any rights consequent thereon;
(b) no waiver by the Agent on behalf of the Lenders of any Event of Default
shall in any way be, or be construed to be, a waiver of any future or
subsequent Event of Default, to the extent permitted by Applicable Law;
and
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(c) no Event of Default may be waived or discharged orally but (in each
case) only by an instrument in writing signed by the Agent on behalf of
the Lenders, subject however to the provisions of Section 17.12.1.
ARTICLE XVII
THE AGENT AND THE LENDERS
SECTION 17.1 - AUTHORIZATION OF AGENT
Each Lender irrevocably appoints and authorizes the Agent to take all action as
agent on its behalf and to exercise such powers and perform such duties under
this Agreement and the other Operative Documents as are delegated to the Agent
by the terms thereof, together with all powers reasonably incidental thereto.
Without restricting the foregoing, the Agent is specifically authorized to
execute or accept all or any of the Subsidiary Guarantees and all ancillary
documents on behalf of the Lenders, if and when deemed appropriate by the Agent,
and to take all actions as it may deem appropriate to render the Subsidiary
Guarantees effective. The Agent is also specifically authorized by the Lenders
to execute and deliver any release or discharge of any Subsidiary Guarantee,
without having to consult with or obtain any consent from the Lenders, in
instances where such release or discharge is required as the consequence of
redesignations or other transactions which a Credit Party is hereunder entitled
to carry out without the need to obtain any consent from the Lenders.
The Agent shall be entitled to use its discretion with respect to exercising or
refraining from exercising any rights which may be vested in it by, and with
respect to taking or refraining from taking any action or actions which it may
be able to take under or in respect of, the Operative Documents, unless the
Agent shall have been instructed by the Majority Lenders to exercise such rights
or to take or refrain from taking such action, the whole subject to the
provisions of Section 17.15.
Neither the Agent nor any director, officer, employee, attorney, trustee,
advisor or agent of the Agent shall incur any liability under or in respect of
the Operative Documents with respect to anything which it may do or refrain from
doing in the reasonable exercise of its judgment or which may seem to it to be
necessary or desirable in the circumstances, except for its gross negligence or
wilful misconduct.
As to matters not expressly provided for by this Agreement, the Agent is not
required to exercise any discretion or to take any action (and is fully
protected in so acting or refraining from acting upon the instructions of the
Majority Lenders) and such instructions shall be binding upon all Lenders;
PROVIDED, HOWEVER, that the Agent shall not be required to take any action that
exposes it to personal liability or that is contrary to this Agreement or
Applicable Law.
The Borrowers may rely on any action taken or consent given by the Agent who
purports to be acting in accordance with the terms of this Agreement.
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SECTION 17.2 - NOTIFICATION OF BORROWINGS, REPAYMENTS, ETC.
The Agent shall promptly notify each Lender in writing upon receipt by the Agent
of any notice of a Borrowing pursuant to Section 3.7, a repayment, a prepayment
and/or cancellation pursuant to Section 3.8, 3.9 or 3.10, a conversion pursuant
to Section 3.11 or a renewal or non-renewal pursuant to Section 5.1 or 7.2.5.
SECTION 17.3 - DETAILS OF BORROWINGS
The Agent shall promptly advise each Lender upon receipt by it of a copy of any
notice of Borrowing of the details thereof, including (as applicable) the
amount, Drawdown Date, Conversion Date and date of renewal of a Borrowing and
each Lender's participation therein, determined in accordance with this
Agreement which determination shall, except in the case of manifest error, be
binding upon the Lenders.
With respect to Advances, each Lender agrees that by not later than 12:00 noon
on the Drawdown Date, it will make the amount of its participation therein
available at the Agent's Account for Payments for value on such Drawdown Date.
The Agent shall be entitled to act upon the oral instructions of any person who
the Agent believes is a person a Borrower has identified in writing from time to
time to the Agent as being a person authorized by a Borrower to give
instructions regarding the completion and issuance of Bankers' Acceptances and
the drawing of other Borrowings and the Agent shall not be responsible for any
error or omission in such instructions or in the performance thereof except in
the case of gross negligence or wilful misconduct by the Agent or its employees.
Any such instructions shall be immediately confirmed in writing by the relevant
Borrower to the Agent as provided hereunder.
SECTION 17.4 - REMITTANCE OF AMOUNTS RECEIVED FROM THE BORROWERS
Provided acceleration of the Indebtedness of the Borrowers pursuant to the
provisions of Section 14.2 has not occurred and subject to Section 17.5, upon
receipt from any Borrower or otherwise of any payments of principal, interest or
other payments made in connection with this Agreement (other than amounts
payable to the Agent by a Borrower by way of fees for the sole account of the
Agent and other than repayments of Loans under the Overdraft and L/C Facility),
the Agent shall use its best efforts to pay to each Lender at its respective
Branches of Account, amounts equal to its respective pro rata portion thereof,
determined by the Agent in accordance with this Agreement on the same Business
Day as such amounts are received by the Agent.
SECTION 17.5 - ASSUMPTION AS TO PAYMENTS
17.5.1 ASSUMED PAYMENT FROM BORROWERS: without affecting the obligations of
the Lenders or Borrowers contained in this Agreement, unless the Agent
has been notified in writing by a Borrower not less than one Business
Day prior to the date on which any payment to be made by such Borrower
hereunder is due that the said Borrower does not intend to remit such
payment, the Agent may, at its discretion, assume that the said
Borrower has remitted such payment when so due and the Agent may, at
its discretion and in reliance upon such assumption, make available to
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each Lender entitled thereto on such payment date an amount equal to
such Lender's Proportion of such assumed payment. If it proves to be
the case that the Borrower has not in fact remitted such payment to the
Agent, each Lender shall forthwith on demand repay to the Agent the
amount of such assumed payment made available to such Lender, together
with interest thereon until the date of repayment thereof at a rate
determined by the Agent (such rate to be conclusive and binding on such
Lender) in accordance with its usual banking practice for advances in
the currency in which such payment is due to banks or financial
institutions of like standing to such Lender;
17.5.2 ASSUMED PAYMENT FROM LENDER: without affecting the obligations of the
Lenders or the Borrowers contained elsewhere in this Agreement, unless
the Agent has been notified in writing by a Lender no less than one
Business Day before a Drawdown Date that such Lender does not intend to
make available to the Agent such Lender's Proportion of a Borrowing to
be effected on such Drawdown Date, the Agent may assume that such
Lender will be making its Lender's Proportion of such Borrowing
available to the Agent on such Drawdown Date and the Agent may, in
reliance upon such assumption, make available to the relevant Borrower
an amount corresponding to such Lender's Proportion. If such Lender
fails to make its Lender's Proportion of the relevant Borrowing
available to the Agent on the Drawdown Date and the said Borrower has
actually received the proceeds of the relevant Borrowing, the Agent
shall be entitled to recover on demand the amount of such Lender's
Proportion of the Borrowing from such Lender, together with interest
thereon until the date of recovery at a rate determined by the Agent
(such rate to be conclusive and binding on such Lender) in accordance
with its usual banking practices for advances in the currency in which
such payment is due to banks or financial institutions of like standing
to such Lender, or, at the option of the Agent, it shall be entitled to
recover the said amount from the said Borrower on demand. Interest
shall accrue on such amount advanced to the said Borrower during the
period prior to such recovery at a rate per annum equal to the rate
applicable to the Borrowing, and, notwithstanding Sections 4.1 and 8.4,
shall be paid by the Borrower to the Agent for its own account. Nothing
herein shall be deemed to relieve any Lender from its obligations to
fulfil its Commitment in accordance with the provisions hereof or to
prejudice any rights which the Borrower might have against any Lender
as a result of any default by such Lender hereunder.
SECTION 17.6 - CHANGE IN CIRCUMSTANCES, ILLEGALITY, INCREASED COSTS, ETC.
Each Lender wishing to avail itself of the provisions of Section 5.2, 7.2.7,
7.4, 8.5, 8.6 or 8.7 shall so advise the Agent and shall provide the Agent with
all appropriate instructions as to any notification to be given to the Borrowers
on such Lender's behalf in respect thereof and shall also provide the Agent with
all appropriate information on the underlying circumstances, events or changes
affecting the London interbank eurodollar market or affecting a law, regulation,
treaty or official directive or notice or creating, imposing or increasing a
Tax, the whole with details and accuracy sufficient to satisfy the Borrowers.
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SECTION 17.7 - NOTICE OF EVENT OF DEFAULT
In the event that an officer or employee of a Lender familiar with the terms of
this Agreement learns of any Default or receives any material information from
any Borrower in respect thereof, such information shall be promptly notified to
the Agent who shall promptly notify the other Lenders thereof.
SECTION 17.8 - PRO RATA TREATMENT OF ADVANCES AND BORROWINGS
17.8.1 ADJUSTMENTS TO LOANS AND REPAYMENTS: to the extent reasonably
practicable and except for Loans under the Overdraft and L/C Facility,
all Borrowings and reborrowings by way of Loans under the Credit
Facilities, and all repayments of the Loans, will be made and applied
in a manner so that the proportion borne by the total amount of the
Loans owing to each set of Paired Lenders under a particular Credit
Facility to the total amount of the Loans owing to all Lenders under
that Credit Facility will at all times be equal to the proportion borne
by the Commitment of that set of Paired Lenders under such Credit
Facility to theRevolving Facility Total Commitment or the Term Facility
Total Commitment, as the case may be;
17.8.2 ADJUSTMENTS TO BANKERS ACCEPTANCES: Bankers' Acceptances will be drawn
on the Lenders in amounts and in a manner so that the proportion borne
by the average daily amount of Bankers' Acceptances accepted by each
set of Paired Lenders under a particular Credit Facility and
outstanding over any given period of time to the average daily amount
of Bankers' Acceptances accepted by all Lenders under that Credit
Facility is, to the extent reasonably practicable, equal to the
proportion borne by the Commitment of that set of Paired Lenders under
such Credit Facility to the Revolving Facility Total Commitment or Term
Facility Total Commitment, as the case may be;
17.8.3 BORROWERS' AGREEMENT: each Borrower agrees to be bound by and to do all
things reasonably necessary or appropriate to give effect to any and
all adjustments made by and between the Lenders to give effect to this
Section 17.8.
SECTION 17.9 - ADJUSTMENTS AMONG LENDERS AFTER ACCELERATION
17.9.1 ADJUSTMENTS WITHIN A CREDIT FACILITY: the Lenders agree that after any
acceleration pursuant to Section 14.2 or after the cancellation or
termination of any part of the Aggregate Commitment, they will at any
time and from time to time upon the request of any Lender through the
Agent purchase portions of the Borrowings made available by the other
Lenders which remain outstanding, and make any other adjustments which
may be necessary or appropriate, in order to ensure that the proportion
borne by the amount of the Borrowings made available by each set of
Paired Lenders which remain outstanding under each of the Revolving
Facility and the Term Facility to the total amount of the Borrowings
made available by all the Lenders which remain outstanding under such
Credit Facility, as adjusted pursuant to this Section 17.9 or Section
17.8, is equal to the proportion borne by the Commitment of that set of
Paired Lenders under such Credit Facility to the Revolving Facility
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Total Commitment or the Term Facility Total Commitment, as the case may
be, immediately prior to the cancellation or termination thereof;
17.9.2 ADJUSTMENTS BETWEEN THE CREDIT FACILITIES: the Lenders agree that after
any acceleration pursuant to Section 14.2 or after the cancellation or
termination of the Aggregate Commitment, the amount of any repayment
made by the Borrowers under this Agreement, and the amount of any
proceeds of the exercise of any rights or remedies of the Lenders under
this Agreement and the other Operative Documents, which is to be
applied against amounts owing hereunder as principal, will be so
applied in a manner such that, after giving effect to such application
and to the extent possible, the proportion borne by the total amount of
Borrowings which remain outstanding under a particular Credit Facility
to the total amount of Borrowings outstanding under all the Credit
Facilities is equal to the proportion borne by the total amount of the
Borrowings of all Lenders under that Credit Facility to the total
amount of the Borrowings of all Lenders under all Credit Facilities
outstanding on the earlier of (I) the time when the Agent gives notice
to all Lenders of the Event of Default giving rise to such
acceleration, cancellation or termination and (II) the time of such
acceleration, cancellation or termination, the whole subject to
adjustment as contemplated by Sections 17.9.1 and 17.8;
17.9.3 APPLICATION OF ADJUSTMENTS: for greater certainty, the Lenders
acknowledge and agree that without limiting the generality of the
provisions of Sections 17.9.1 and 17.9.2, such provisions will have
application if and whenever any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of
set-off, compensation, or otherwise) on account of any monies owing or
payable by the Borrowers to it hereunder in excess of its Lender's
Proportion of payments on account of monies owing by the Borrowers to
all the Lenders hereunder;
17.9.4 BORROWERS' ACKNOWLEDGEMENT: the Borrowers agree to be bound by and to
do all things reasonably necessary or appropriate to give effect to
any and all purchases and other adjustments made by and between the
Lenders pursuant to this Section 17.9.
SECTION 17.10 - SHARING AMONG THE LENDERS
The Agent and the Lenders agree among themselves that, except for the Overdraft
and L/C Facility as otherwise contemplated by the provisions of this Agreement,
all sums received by the Agent on behalf of the Lenders and by the Lenders
relative to this Agreement (whether received by voluntary payment, by the
exercise of the right of set-off, compensation or by counterclaim, cross-action
or as proceeds of realization of any security) shall be shared by each Lender in
the proportion to which the amount owing to such Lender (as a Paired Lender)
hereunder bears to the amount owing to all the Lenders hereunder.
SECTION 17.11 - CASH COLLATERAL ACCOUNTS
Upon the occurrence of an Event of Default and notwithstanding the provisions of
Section 8.4 and in addition to any other rights or remedies of the Lenders under
the Operative Documents, the Lenders, as and by way of collateral security,
shall be entitled to deposit and retain in an account to be maintained by the
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Agent on behalf of the Lenders (bearing interest at the rates of the Agent as
may be applicable in respect of other deposits of similar amounts for similar
terms) amounts which are received by the Lenders from the Borrowers hereunder or
as proceeds of realization of any guarantee or security given by a Credit Party
under the Operative Documents to the extent such amounts may be required to
satisfy any contingent or unmatured obligations or liabilities of a Credit Party
to the Lenders or the Agent under the Operative Documents.
SECTION 17.12 - INSTRUCTIONS FROM LENDERS
17.12.1 WAIVERS, AMENDMENTS, ETC.:
(a) CONSENT OF MAJORITY LENDERS: subject to the provisions of
Section 3.1(iii), and of paragraphs (b) and (c) below, the
provisions of the Operative Documents may only be amended or
waived, on behalf of the Lenders, by an instrument in writing
(and not orally) in each case signed by or on behalf of the
Agent, and any term, covenant, agreement or condition
contained in the Operative Documents may be amended with the
consent of the Majority Lenders, and such amendments shall be
binding upon all the parties hereto, or compliance therewith
may be waived (either generally or in a particular instance
and either retroactively or prospectively) by the Majority
Lenders, and such waiver shall be binding upon all the
Lenders, and in any such event the failure to observe, perform
or discharge any such covenant, condition or obligation
(whether such amendment is executed or such consent is given
before or after such failure) shall not be construed as a
breach of such covenant, condition or obligation or an Event
of Default.
(b) CONSENT OF ALL LENDERS: notwithstanding paragraph (a) above,
where an amendment, consent or waiver relates to:
(i) an extension or reduction of the duration of a Credit
Facility or of the maturity of the Borrowings or of
the time for any payments required of any Borrower
hereunder,
(ii) any change in the Revolving Facility Total
Commitment, Term Facility Total Commitment or
Overdraft and L/C Commitments or a change in a
particular Lender's Commitment under a Credit
Facility made otherwise than in accordance with the
provisions of this Agreement,
(iii) any change (other than in accordance with the
provisions of Section 4.6) in the Acceptance Fee, the
Applicable Margin, the Standby Fee, the L/C Fee or
any amount payable by the Borrowers hereunder,
whether by way of principal, interest, indemnity,
fees or otherwise,
(iv) a change in the currency in which payments hereunder
are to be made under any of the Operative Documents,
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(v) a change in the covenants or conditions set forth in
Sections 8.4, 8.5, 8.6, a change in the conditions
precedent to Initial Borrowing set forth in Section
10.1.1 or a change in the Events of Default,
(vi) a change of Xxxxxxx, ICI or CII as Borrowers, or the
assignment by any of them of their rights and
obligations under this Agreement,
(vii) a change or release of any Subsidiary Guarantee
(other than as a result of the redesignation of a
Restricted Subsidiary in accordance with the
provisions of this Agreement), and
(viii) a change in this Section 17.12 or a reduction in the
percentage specified in the definition of "Majority
Lenders" hereunder,
then such amendment, consent or waiver shall require the
consent of all the Lenders (subject to the provisions of
Section 3.1(iii) hereof) and shall be made in writing by the
Agent, whereupon such amendment, consent or waiver shall be
binding upon all the Lenders.
(c) WAIVER OF DEFAULT BY OVERDRAFT AND L/C LENDERS:
notwithstanding paragraphs (a) and (b) above, where a Default
which has not yet become an Event of Default has occurred,
Xxxxxxx may request the two Overdraft and L/C Lenders to waive
such Default so as to allow the Borrowers to continue their
utilization of the Overdraft and L/C Facility by way of
overdraft Advances as contemplated by Section 3.7(b)(i) (and
not by way of the issuance of Letters of Credit) while such
Default continues (but prior to such Default becoming an Event
of Default); and both Overdraft and L/C Lenders may then waive
such Default (but only for the purposes of the Overdraft and
L/C Facility) and agree to continue to make overdraft Advances
available to the Borrowers. The said waiver must be granted by
both Overdraft and L/C Lenders and may be subject to such
restrictions as the Overdraft and L/C Lenders may fix; the
waiver shall have no effect on the Revolving Facility or the
Term Facility or the rights of the Lenders in respect thereof.
Upon granting such a waiver, the Overdraft and L/C Lenders
shall give notice thereof to the Agent for onward transmittal
by the Agent to the Lenders.
In circumstances other than those contemplated in the foregoing
provisions of paragraph (b) above, an amendment, consent, waiver,
discharge, release or termination approved by the Majority Lenders
(subject to the provisions of Section 3.1(iii) hereof) shall be
binding upon all the Lenders, PROVIDED that the Agent shall in the
circumstances contemplated by Sections 9.3 and 17.1, be entitled to
release or discharge certain Subsidiary Guarantees without the need
to seek the approval of the Lenders;
17.12.2 NOTICES OF DEFAULTS: upon the occurrence of any breach or failure
referred to in Section 14.1 of which an officer or employee of the
Agent familiar with the terms of this Agreement has acquired actual
knowledge, the Agent will give written notice to this effect to all
of the Lenders, and will provide the Lenders with any material
information it may receive from the Borrowers in respect thereof.
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Upon the occurrence of an Event of Default, the Agent shall give to
the Borrowers the written notice provided for in Section 14.2 if
directed to do so by the Majority Lenders, and such action will be
binding upon all the Lenders, provided that the absence of such
direction shall not prevent the Agent, at all times, to take or
refrain from taking such actions or asserting such rights as it deems
in its discretion to be advisable for the protection of the Lenders.
SECTION 17.13 - RELIANCE ON WRITINGS AND LEGAL ADVICE
The Agent shall not incur any liability under or in respect of any Operative
Document by acting or relying upon any writing, notice, certificate, telecopier
message, telex, cable, statement, order or other document or telephone
conversation believed by the Agent to be genuine and correct and to have been
signed, sent or made by the proper person or persons. The Agent may consult with
Counsel (including Counsel for any Credit Party), independent public accountants
and other experts selected by it and shall not be liable for any action
reasonably taken or omitted to be taken in good faith by it in accordance with
the advice of such Counsel, accountants or experts pertaining to the Operative
Documents and its duties hereunder. If the Agent seeks to verify the signatures
or the validity of instructions, demands, requests or notices and is unable to
do so to its satisfaction, it may delay acting thereon or refuse to act thereon,
provided that nothing herein and no verification as aforesaid at any time by the
Agent shall obligate the Agent to make such verifications in any particular
case.
SECTION 17.14 - COSTS AND EXPENSES
Each Lender agrees that it will, on demand, reimburse the Agent pro rata in
accordance with such Lender's respective Commitments (or shared Commitments) for
any and all reasonable costs, expenses and disbursements (excluding normal
overhead and salary expenses of the Agent's employees incurred in connection
with the normal administration of the Operative Documents) which may be incurred
or made by the Agent in connection with the performance and enforcement of this
Agreement for which the Agent is not promptly reimbursed at any time by or on
behalf of a Borrower, unless such costs or expenses and disbursements arise out
of the Agent's gross negligence or wilful misconduct. The Agent shall not be
obliged to expend its own funds or otherwise incur any financial obligations in
connection with the Operative Documents unless the Agent is so reimbursed.
SECTION 17.15 - AUTHORITY OF AGENT TO ACT
The Agent shall have the right, subject to the provisions of this Agreement, to
take such actions as it deems fit or refrain from taking any action, or to give
agreements, consents, approvals or instructions to the Borrowers on behalf of
the Lenders in respect of all matters referred to in or contemplated by this
Agreement. However, subject to Section 17.12, the Agent shall not waive a
predisbursement condition or an Event of Default, or make decisions or give
consents which could materially impact the Lenders' interest without first
obtaining the consent of at least the Majority Lenders in respect thereof. Each
Lender agrees that a decision by the Lenders taken pursuant to this Section
17.15 with respect to any matters specifically referred to in the Credit
Agreement, as being governed by a decision of such Lenders, shall be binding on
all the Lenders.
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SECTION 17.16 - DISCLAIMER
Neither the Arranger nor the Agent makes any representation or warranty, or
accepts any responsibility, with respect to the due execution, legality,
validity, sufficiency or enforceability of the Operative Documents or any
instrument or document referred to therein or relative thereto. Neither the
Arranger nor the Agent assumes any responsibility for the financial condition of
the Credit Parties or for the payment of any of the Borrowings. Neither the
Arranger nor the Agent assumes any responsibility with respect to the accuracy,
authenticity, legality, validity, sufficiency or enforceability of any
documents, papers, materials or other information furnished by the Borrowers or
any other person to the Agent, the Arranger or any Lender in connection with the
Operative Documents or any matter referred to therein.
The Agent shall not be liable to any Lender for any error in judgment or for any
action taken or omitted by the Agent or with respect to anything which the Agent
may do or refrain from doing in the reasonable exercise of its own judgment or
which may seem to the Agent to be necessary or desirable in the circumstances,
except for gross negligence or wilful misconduct, and the Agent will exercise
the same care in administering the Operative Documents as the Agent exercises
with respect to credit facilities which the Agent alone makes and the Agent
shall have no further responsibility to the Lenders. In all cases, the Agent
shall be fully protected in acting or refraining from acting under the Operative
Documents in accordance with the instructions of the Majority Lenders, save in
respect of matters specified in Section 17.12.
SECTION 17.17 - INDEMNIFICATION
Each Lender severally agrees to indemnify the Agent (to the extent not promptly
reimbursed by the Borrower) rateably in accordance with its portion of the
Borrowings outstanding under this Agreement (or, if no Borrowing is then
outstanding hereunder, rateably in accordance with its Commitments), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, Taxes or disbursements of any kind
and nature whatsoever which may be imposed on, incurred by, or asserted against
the Agent or the Arranger in its capacity as such in any way relating to or
arising out of the Operative Documents or any other documents contemplated by or
referred to therein or the transactions contemplated thereby (including, without
limitation, the costs and expenses which the Borrowers are obligated to pay
under Section 12.1) or any action taken or omitted by the Agent or the Arranger
in enforcing any of the terms hereof or preserving any rights hereunder,
provided that no Lender shall be liable for any of the foregoing to the extent
they arise from the Agent's or the Arranger's gross negligence or wilful
misconduct. Without limiting the generality of the foregoing, each Lender agrees
to reimburse the Agent and the Arranger promptly upon demand for its Lender's
Proportion of out-of-pocket expenses (including the fees and disbursements of
Counsel) incurred by the Agent and the Arranger with the approval of the
Majority Lenders in connection with the determination or preservation of any
rights of the Agent, the Arranger or the Lenders under, or the enforcement of,
or legal advice in respect of rights or responsibilities under the Operative
Documents, to the extent that the Agent or the Arranger are not reimbursed for
such expenses by the Borrower. Without prejudice to the survival of any other
agreement of any Lender hereunder, the agreement and obligations of each Lender
contained in this Section 17.17 shall survive the payment in full of principal,
interest and all other amounts, payable hereunder and under the other Operative
Documents.
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SECTION 17.18 - ACKNOWLEDGEMENT OF LENDERS
Each Lender acknowledges to the Agent and the Arranger that it has been, and
will continue to be, solely responsible for making its own independent appraisal
of and investigation into the financial condition, creditworthiness, affairs,
status and nature of the Credit Parties and accordingly each Lender confirms to
the Agent and the Arranger that it has not relied, and will not hereafter rely
on the Agent:
(a) to check or enquire on its behalf into the adequacy, accuracy or
completeness of any information provided by any Credit Party or in
connection with the Operative Documents (whether or not such
information has been or is hereafter circulated to such Lender by the
Agent); or
(b) to assess or keep under review on its behalf the financial condition,
creditworthiness, affairs, status or nature of the Credit Parties.
In addition, each Lender acknowledges that a copy of this Credit Agreement and
of the Schedules thereto and of the other Operative Documents have been made
available to it for its review and that it is satisfied with the form and
substance of this Credit Agreement and the Schedules thereto and of the other
Operative Documents.
SECTION 17.19 - AGENT'S DUTY TO DELIVER DOCUMENTS
The Agent shall promptly deliver to each of the Lenders, at their respective
Branches of Account, such documents, papers, materials and other information as
are furnished by any Borrower to the Agent on behalf of the Lenders pursuant to
this Agreement, but shall have no other obligation to provide any Lender with
any credit or other information whatsoever with respect to the Credit Parties
and shall be under no obligation to inquire as to the performance by the
Borrower of its obligations hereunder.
SECTION 17.20 - OTHER TRANSACTIONS
Each Lender, the Arranger and the Agent may, outside the scope of this
Agreement, deal with the Credit Parties in all transactions and may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally do any banking business with
the Credit Parties, without having any liability to account to the other Lenders
therefore. With respect to Royal's Commitment and its participation in the
Borrowings, Royal shall have the same rights and powers hereunder and under the
other Operative Documents as any other Lender, and may exercise the same as
though they were not Agent.
SECTION 17.21 - NO PREFERENCE
No Lender shall have, previous to this Agreement, entered into or, subsequent to
this Agreement, enter into any arrangement with the Borrowers or any other
Person, without the prior written consent of the other Lenders, which would have
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the effect of giving such Lender preference or priority over any other Lender in
respect of the indebtedness of the Borrowers under this Agreement.
SECTION 17.22 - SUBMISSION OF INFORMATION
In respect of any certificate or statement required to be delivered to the
Borrowers by the Agent pursuant to the Credit Agreement, each Lender shall
provide the Agent with all necessary information required to complete such
certificate or statement.
From time to time, at the request of the Agent, each Overdraft and L/C Lender
shall provide the Agent with details of Borrowings outstanding under the
Overdraft and L/C Facility over any particular period of time, as well as any
other information reasonably requested in respect of the Overdraft and L/C
Facility and its utilization.
SECTION 17.23 - SHARING OF INFORMATION CONCERNING THIS AGREEMENT
Each Borrower authorizes the Arranger, the Agent and the Lenders to share with
each other and, subject to the provisions of Section 18.6, with prospective
Assignees of and Participants in the Credit Facilities, any information
possessed by them regarding the Credit Parties or relating to the liability and
indebtedness of the Borrowers under this Agreement and to payments received by
the Lenders from the Borrowers.
SECTION 17.24 - NO ASSOCIATION AMONG LENDERS
Nothing contained in this Agreement and no action taken pursuant to it shall, or
shall be deemed to, constitute the Lenders a partnership, association, joint
venture or other similar entity.
SECTION 17.25 - SUCCESSOR AGENT
Subject to the appointment and acceptance of a successor agent as provided in
this Section 17.25, the Agent may resign at any time by giving written notice
thereof to the Lenders and the Borrowers, and the Agent may be removed at any
time for cause by the Majority Lenders. Upon any such resignation or removal,
the Majority Lenders shall have the right to appoint a successor agent with the
approval of the Borrowers if prior to an Event of Default (such approval not to
be unreasonably withheld). Any successor agent appointed under this Section
17.25 shall be a Lender which, directly or through its Related Canadian Lender
or Related US Lender, has an office in Montreal or Toronto, Canada and New York
City, New York, USA. If no successor agent shall have been appointed by the
Majority Lenders and shall have accepted such appointment within 30 days after
the retiring agent's giving of notice of resignation or the Majority Lenders'
removal of the retiring agent, then the retiring agent may, on behalf of the
Lenders and with the approval of the Borrowers if prior to an Event of Default
(such approval not to be unreasonably withheld), appoint a successor agent. Upon
the acceptance of any appointment as Agent by a successor agent, such successor
agent shall thereupon succeed to and become vested with all the rights, powers,
privileges, obligations and duties of the retiring agent and shall be deemed for
the purposes of this Agreement to be the Agent, and the retiring agent shall be
discharged from any duties and obligations as such under the Operative Documents
arising from and after such date. After the retiring agent's resignation or
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removal hereunder as Agent, the provisions of this Agreement shall continue in
effect for its benefit and for the benefit of the Lenders in respect of any
actions taken or omitted to be taken by the retiring agent while it was acting
as Agent.
SECTION 17.26 - CHANGE OF ADDRESS
The Agent shall promptly advise each Lender of any change in the address of the
Agent's Branch of Account or of the Agent's Accounts for Payments; each Lender
shall advise the Agent of any change in the address of its Branch of Account.
SECTION 17.27- REPLACEMENT OF SCHEDULE II REFERENCE BANKS
If a Schedule II Reference Bank assigns, subject to the provisions of Section
18.3, all its rights hereunder or otherwise ceases to be a Lender, or if a
Schedule II Reference Bank gives notice of its intention to cease being a
Schedule II Reference Bank, or if in the opinion of the Agent, a Schedule II
Reference Bank is no longer capable of exercising its functions as a Schedule II
Reference Bank, the Agent shall, with the prior written consent of the Borrowers
if prior to an Event of Default, appoint another Lender (with the latter's
consent) to act as a Schedule II Reference Bank in replacement thereof.
SECTION 17.28 - REPLACEMENT OF LIBOR REFERENCE BANKS
If a Libor Reference Bank assigns, subject to the provisions of Section 18.3,
all its rights hereunder or otherwise ceases to be a Lender, or if a Libor
Reference Bank gives notice of its intention to cease being a Libor Reference
Bank, or if in the opinion of the Agent, a Libor Reference Bank is no longer
capable of exercising its functions as a Libor Reference Bank, the Agent shall,
with the prior written consent of the Borrowers if prior to an Event of Default,
appoint another Lender (with the latter's consent) to act as a Libor Reference
Bank in replacement thereof.
SECTION 17.29 - AMENDMENT OF THIS ARTICLE XVII
Save and except for the provisions of Section 17.12, the provisions of this
Article XVII may be amended or added to, from time to time, by execution by the
Lenders of an instrument in writing and such instrument in writing shall validly
and effectively amend or add to any or all of the provisions of this Article
XVII without requiring the execution of such instrument in writing by the
Borrowers provided such amendment or addition does not adversely affect the
rights or obligations of the Borrowers. The Agent shall forward a copy of such
written instrument to the Borrowers as soon as practicable following the
execution thereof by the Lenders.
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ARTICLE XVIII
SUCCESSORS AND ASSIGNS
SECTION 18.1 - BENEFIT AND BURDEN OF THIS AGREEMENT
This Agreement shall inure to the benefit of and be binding on the parties
hereto, their respective successors and any permitted assignees or transferees
of some or all of the parties' rights or obligations hereunder.
SECTION 18.2 - THE BORROWERS
The Borrowers shall not assign or transfer all or any part of their rights or
obligations hereunder without the prior written consent of all Lenders.
SECTION 18.3 - ASSIGNMENT AND PARTICIPATION
(a) Any Lender (herein sometimes called a "GRANTING LENDER") may, at no
cost to the Borrowers, grant a participation in the Credit Facilities
to another Person (a "PARTICIPANT"), provided in each case that (I) the
Granting Lender remains fully liable for all of its obligations and
responsibilities hereunder to the same extent as if such participation
had not been granted, (II) the Granting Lender administers the
participation of the Participant, and none of the Participant nor the
Borrowers nor the Agent shall have any rights against or obligations to
one another, nor shall any of them be required to deal directly with
one another in respect of the participation by such Participant and
(III) the Participant does not thereby obtain voting rights hereunder,
other than in respect of reductions or postponements of amounts payable
hereunder or in respect of the release of all or substantially all the
Subsidiary Guarantees.
(b) Any Lender (herein sometimes called an "ASSIGNING LENDER") may, at no
cost to the Borrowers, assign all or any part of its rights to, and may
have its obligations in respect of the Credit Facilities assumed by,
any other Lender or any other Person (the "ASSIGNEE"); PROVIDED THAT no
such assignment may be effected to a Person other than a Lender without
the written consents of the Agent and the Borrowers and the Restricted
Subsidiaries (which consents in each case shall not be unreasonably
withheld) and, in the case of partial assignments, in tranches of not
less than US$5,000,000, and multiples of US$1,000,000 in excess
thereof, AND PROVIDED that prior to the occurrence of an Event of
Default, any assignment by a Paired Lender must be accompanied by a
concurrent assignment hereunder, by its Related US Lender or Related
Canadian Lender, as the case may be, which assignments must be made to
a set of Persons which are or would become Paired Lenders hereunder,
consisting of a Canadian Lender and a US Lender, and PROVIDED FURTHER
(I) that, notwithstanding the foregoing, any Lender may, without the
consent of the Agent or the Borrowers and the Restricted Subsidiaries
assign as security, all or part of its rights under the Operative
Documents to any Federal Reserve Bank of the United States of America
and all or part of its rights or obligations under the Operative
Documents to any of its Affiliates and (II) that if an Event of Default
shall have occurred and be continuing, such consents from the Borrowers
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and the Restricted Subsidiaries shall not be required. Subject to the
foregoing an assignment (other than an assignment as security to any
Federal Reserve Bank of the United States of America) shall become
effective when the Borrowers, the other Credit Parties and the Agent
have been notified of it by the Assigning Lender and have received from
the Assignee an undertaking (addressed to all the parties to this
Agreement) to be bound by this Agreement and to perform the obligations
assigned to it, in form and substance to the effect of SCHEDULE "P".
Any such Assignee shall be and be treated as a Lender for all purposes
of this Agreement, shall be entitled to the full benefit hereof and of
all the Operative Documents and shall be subject to the obligations
hereunder to the same extent as if it were an original party in respect
of the rights or obligations assigned to it, and the Assigning Lender
shall be released and discharged accordingly and to the same extent.
SECTION 18.4 - LIMITATION
No Lender shall be entitled to grant a participation pursuant to Section 18.3(a)
or an assignment pursuant to Section 18.3(b), as the case may be, if, as a
result, such participation or assignment results in any increased costs
(including, without limitation, any obligation to pay withholding tax or further
sums pursuant to Section 8.5.1) to the Borrowers in effect at the time of such
grant of participation or assignment.
SECTION 18.5 - ACCEPTANCE OF BANKERS' ACCEPTANCES BY PARTICIPANTS
If a Lender sub-participates a portion of its rights under this Agreement to a
Participant, then in respect of any Borrowing by way of Bankers' Acceptances a
portion thereof may, at the option of such Lender, be by way of Bankers'
Acceptance accepted by such Participant. In such event, the Borrower shall upon
request of the Agent or the Granting Lender execute and deliver a form of
Bankers' Acceptance undertaking in favour of such Participant for delivery to
such Participant, such undertaking to be in form and substance reasonably
satisfactory to the Participant.
SECTION 18.6 - DISCLOSURE
Each Lender may disclose to any prospective Assignee or prospective Participant,
on a confidential basis, such information concerning the Credit Parties as it
considers appropriate, provided that such prospective Assignee or prospective
Participant agrees to be bound and abide by the same standards with respect to
confidentiality as the Lenders have heretofore agreed to adhere to in connection
with the transactions contemplated by the Operative Documents.
SECTION 18.7 - EXPENSES AND FEE
A Lender which grants a participation in or assigns all or any part of its
rights hereunder as set forth in Section 18.3 shall pay to the Agent on demand
all expenses, including but not limited to legal fees (and value-added tax
thereon), incurred by the Agent in connection with such participation or
assignment. If as a result of such participation or assignment, the Agent incurs
any increased costs or additional expenses in connection with the performance of
its duties hereunder, the Participant or the Assignee, as the case may be, shall
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upon demand from time to time pay to the Agent such amount as shall compensate
the Agent for any such reasonable increased costs or additional expenses (and
the certificate of the Agent specifying the amount of such compensation shall be
conclusive in the absence of manifest error).
Upon the completion of each assignment pursuant to Section 18.3(b) (other than a
security assignment in favor of a Federal Reserve Bank of the United States of
America), a processing and recordation fee of US$3,500 shall be payable to the
Agent.
ARTICLE XIX
COMPENSATION
SECTION 19.1 - SET-OFF, COMPENSATION
Each Lender is authorized (but not obligated) at any time or from time to time
after the occurrence and during the continuance of a Default or an Event of
Default, without notice to any Credit Party or to any other Person, any such
notice being expressly waived by the Borrowers, to set off, compensate and to
apply any and all deposits (general or special) held for or in the name of a
Credit Party and any Indebtedness or liability at any time owing or payable by
such Lender to or for the credit of or the account of such Credit Party against
and on account of the obligations and liabilities of the said Credit Party owing
or payable to such Lender under this Agreement or the other Operative Documents,
irrespective of currency (which may be converted for this purpose at the "rate
of exchange" as set forth in Section 20.1) and of whether or not such Lender has
made any demand under this Agreement or the other Operative Documents and
whether or not these obligations and liabilities of the said Credit Party, or
any of them, have matured. The provisions of this Section 19.1 shall not
restrict such rights as the Lenders may be entitled to without relying upon the
provisions of this Agreement. For the purposes of the application of this
Section 19.1, the Borrower and the Lenders agree that the benefit of any term
applicable to any Lender's deposit, credit, indebtedness, liability or
obligation (collectively referred to in this Section 19.1 as the "DEPOSIT")
shall be lost immediately before the time when such Lender shall exercise its
rights under this Section 19.1 in respect of a relevant Deposit of such Lender.
For the purposes of the foregoing, in all operation of account agreements
entered into between a Credit Party and the Agent at any time and from time to
time, as between such Credit Party and the Agent any reference therein to the
Agent as the "Bank" shall mean the Agent as agent for the Lenders, subject to
the terms of this Agreement, provided (a) that any charges for the maintenance
and operation of such account shall be payable for the exclusive benefit of the
Agent without any obligation on the part of the Agent to share such payments
with the Lenders and (B) that any interest payable to such Credit Party with
respect to deposits made in such account, shall be payable exclusively by the
Agent without any obligation or liability on the part of any Lender for the
payment of such interest.
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ARTICLE XX
JUDGMENT CURRENCY
SECTION 20.1 - JUDGMENT CURRENCY
If for the purpose of obtaining judgment in any court in any jurisdiction with
respect to this Agreement, it becomes necessary to convert into the currency of
such jurisdiction (herein called the "JUDGMENT CURRENCY") any amount due
hereunder in any currency other than the Judgment Currency, then conversion
shall be made at the rate of exchange prevailing on the Business Day preceding
(A) the date of actual payment of the amount due, in the case of proceedings in
the courts of any jurisdiction that will give effect to such conversion being
made on such day, or (B) the day on which the judgment is given, in the case of
proceedings in the courts of the Province of Quebec or of any other jurisdiction
(the applicable date as of which such conversion is made pursuant to this
Section being hereinafter called the "JUDGMENT CONVERSION DATE"). For this
purpose, "RATE OF EXCHANGE" means the rate at which the Agent would be prepared
on the relevant date, to sell the currency of the amount due hereunder in
Xxxxxxxx xx Xxxxxxx, Xxxxxx against the Judgment Currency. In the event that
there is a change in the rate of exchange prevailing between the Judgment
Conversion Date and the date of payment of the amount due, the Borrower will, on
the date of payment, pay such additional amounts (if any) as may be necessary to
ensure that the amount paid on such date is the amount in the Judgment Currency
which, when converted at the rate of exchange prevailing on the date of payment,
is the amount then due under this Agreement in Canadian Dollars or US Dollars,
as the case may be. Any additional amount due under this Section 20.1 will be
due as a separate debt and shall not be affected by judgment being obtained for
any other sums due under or in respect of this Agreement.
ARTICLE XXI
GOVERNING LAW
SECTION 21.1 - GOVERNING LAW
The parties agree that this Agreement is conclusively deemed to be made under,
and for all purposes to be governed by and construed in accordance with, the
laws of the Province of Quebec and federal laws of Canada applicable therein.
ARTICLE XXII
NOTICE
SECTION 22.1 - ADDRESS FOR NOTICE
Unless otherwise provided in this Agreement, any demand, request or notice to be
given under this Agreement shall be given by delivering the same or by mailing,
by registered mail, postage prepaid or by telexing by way of tested telex or by
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telecopying the same, addressed (A) in the case of the Borrowers, as indicated
opposite the names of the Borrowers on the signature pages of this Agreement and
on any Adopting Instrument (in the case of an Additional Borrower), (B) in the
case of the Agent, as indicated opposite its name on the signature pages of this
Agreement and (C) in the case of the Lenders, as indicated opposite their names
on SCHEDULE "A", or to such other address as may be notified by any party to the
others pursuant to Section 22.2.
SECTION 22.2 - NOTICE
Any such demand, request or notice sent as aforesaid shall be deemed to have
been received by the party to whom it is addressed (a) upon receipt, if
delivered or sent by registered mail (B) on the Business Day next following the
date of transmission if telexed and the appropriate answerback is received and
(C) if telecopied before 3:00 p.m. on a Business Day, on that day provided a
clear transmission report is received by the sender and if telecopied after 3:00
p.m. on a Business Day, on the Business Day next following the date of
transmission; provided, however, that in the event normal mail service,
telecopier service or telex service shall be interrupted by strike, force
majeure or other cause, then the party sending the demand, request or notice,
shall utilize any other mode of communication which shall ensure prompt receipt
of such demand, request or notice by the other party or parties.
ARTICLE XXIII
MISCELLANEOUS
SECTION 23.1 - SEVERABILITY
Any provision of this Agreement which is or becomes prohibited or unenforceable
in any jurisdiction, does not invalidate, affect or impair the remaining
provisions thereof and any such prohibition or unenforceability in any
jurisdiction does not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 23.2 - INTEREST LIMITATION
The parties agree that no provision of this Agreement shall have the effect of
imposing on the Borrower any obligation to pay interest (as such term is defined
in section 347 of the Criminal Code of Canada) at a rate in excess of 60% per
annum, taking into account all other amounts which must be taken into account
for the purpose thereof; and, to such extent, the Borrower's obligation to pay
interest hereunder is so limited.
SECTION 23.3 - SURVIVAL OF REPRESENTATIONS AND UNDERTAKINGS
The representations and warranties made by the Borrowers in Article II of this
Agreement and the covenants, undertakings and agreements contained in this
Agreement survive the execution and delivery of this Agreement and continue in
full force and effect until the full payment and satisfaction of all liabilities
and obligations of the Borrowers to the Lenders under this Agreement.
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SECTION 23.4 - WHOLE AGREEMENT
This Agreement constitutes the whole and entire agreement between the parties
hereto with respect to the subject matter thereof and cancels and supersedes any
prior offers, agreements, undertakings, declarations and representations,
written or verbal in respect thereof.
SECTION 23.5 - AMENDMENTS
No amendment, modification or waiver of any provision of this Agreement or
consent to any departure by the Borrowers from any provision of this Agreement
will in any event be effective unless it is in conformity with Sections 17.12
and 17.29 and then the amendment, modification, waiver or consent will be
effective only in the specific instance, for the specific purpose and for the
specific length of time for which it is given.
Notwithstanding the foregoing paragraph, the Agent is hereby authorized to
correct any typographical error or other error of an editorial nature in this
Agreement and to substitute such corrected text in the counterparts of this
Agreement, provided that such corrections do not modify in any manner the
meaning or the interpretation of this Agreement.
SECTION 23.6 - COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which when
executed and delivered is an original but all of which taken together constitute
one and the same instrument; any party may execute this Agreement by signing any
counterpart of it and may communicate such signing by telecopier or otherwise.
SECTION 23.7 - FURTHER ASSURANCES
The Borrowers, the Agent and the Lenders shall do all such further acts and
execute and deliver all such further documents as shall be reasonably required
in order to fully perform and carry out the terms of this Agreement.
SECTION 23.8 - RISKS OF SUPERIOR FORCE
The Borrowers expressly assume all risks of superior force, such that they shall
be bound to timely execute each and every of their obligations under this
Agreement notwithstanding the existence or occurrence of any event or
circumstance constituting a superior force within the meaning of Article 1693 of
the CIVIL CODE OF QUEBEC.
SECTION 23.9 - GOOD FAITH AND FAIR CONSIDERATION
The Borrowers acknowledge and declare that they have entered into this Agreement
freely and of their own will. In particular, the Borrowers acknowledge that this
Agreement was negotiated by them and the Lenders in good faith.
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SECTION 23.10 - TERM OF AGREEMENT
The term of this Agreement is until the later of the termination of the
Aggregate Commitment and payment in full of all the obligations of the Borrowers
incurred pursuant to this Agreement.
SECTION 23.11 - FORMAL DATE
This Agreement shall bear the formal date of July 23, 1998, notwithstanding the
actual date of execution thereof by the parties hereto and may be referred to as
bearing such date.
SECTION 23.12 - LANGUAGE
The Borrowers, the Agent and the Lenders confirm that they have requested that
this Agreement and all documents and notices contemplated thereby be drawn up in
the English language. LES EMPRUNTEURS, LE MANDATAIRE ET LES PRETEURS CONFIRMENT
AVOIR REQUIS QUE CETTE CONVENTION ET TOUS LES DOCUMENTS ET AVIS QUI Y SONT
ENVISAGES SOIENT REDIGES EN LANGUE ANGLAISE.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed at Montreal as of this 23rd day of July, 1998.
ADDRESS: XXXXXXX PAPERS LTD.
00, xxxx. Xxxxx-Xxxxxxxx
Xxxxxxx, Xxxxxx By:
J5R 1C3 ---------------------------
Name: Xxxxxxx Xxxxxxxx
ATTENTION: The Corporate Controller Title: President and
Chief Executive Officer
Telecopier: (000) 000-0000
By:
---------------------------
Name: Xxxxxxx Xxxxxx
Title: Director, Finance
- 122 -
ADDRESS: INDUSTRIES CASCADES INC.
00 Xxxxx-Xxxxxxxx Xxxx.
Xxxxxxx, Xxxxxx By:
J5R 1C3 ---------------------------
Name: Xxxxxxx Xxxxxxxx
ATTENTION: The Corporate Title: President
Controller
Telecopier: (000) 000-0000
By:
---------------------------
Name: Xxxxxxx Xxxxxx
Title: Treasurer
ADDRESS: CASCADES INDUSTRIES, INC.
00 Xxxxx-Xxxxxxxx Xxxx.
Xxxxxxx, Xxxxxx By:
J5R 1C3 ---------------------------
Name: Xxxxxxx Xxxxxxxx
ATTENTION: The Corporate
Controller Title: President
Telecopier: (000) 000-0000
By:
---------------------------
Name: Xxxxxxx Xxxxxx
Title: Treasurer
- 123 -
ADDRESS: XXXXX XXXX XX XXXXXX
Xxxxx Xxxx xx Xxxxxx (as Agent)
000 Xxx Xxxxxx
Xxxxx Tower By:
Xxxxx Xxxx Xxxxx ---------------------------
Xxxxxxx, Xxxxxxx Name: Xxxxx X. Xxx
M5J 2J5
Title: Senior Manager
ATTENTION: Senior Manager, Global Global Syndications
Syndications, Canada
Telecopier: (000) 000-0000
ROYAL BANK OF CANADA
(as Lender)
By:
---------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Account Manager
By:
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Manager
- 000 -
XXXXXXXX XXXX XX XXXXXX
(as Lender)
By:
---------------------------
Name: Xxxx Xxxxxx
Title: Senior Manager
By:
---------------------------
Name: Xxxxxx Xxxxxx
Title: Account Manager
NATIONAL BANK OF CANADA,
NEW YORK BRANCH
(as Lender)
By:
---------------------------
Name: Pierre Osterrath
Title: Vice President
By:
---------------------------
Name: Xxx Xxxx
Title: Assistant Vice President
- 000 -
XXXX XX XXXXXXX XXXXXX
(as Lender)
By:
---------------------------
Name:
-------------------------
Title:
------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION
(as Lender)
By:
---------------------------
Name:
-------------------------
Title:
------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
- 126 -
BANK OF MONTREAL
(as Lender)
By:
---------------------------
Name:
-------------------------
Title:
------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
BANK OF MONTREAL,
US OFFICE
(as Lender)
By:
---------------------------
Name:
-------------------------
Title:
------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
- 127 -
COMERICA BANK
(as Lender)
By:
---------------------------
Name: Xxxxxxx X. Persons
Title: Vice President,
International Finance
Department
BANK OF TOKYO-MITSUBISHI
(CANADA)
(as Lender)
By:
---------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President &
General Manager
THE BANK OF TOKYO-
MITSUBISHI, LTD.
(as Lender)
By:
---------------------------
Name:
-------------------------
Title:
------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
- 128 -
CREDIT LYONNAIS CANADA
(as Lender)
By:
---------------------------
Name: Xxxxxxx Xxxxxx
Title: First Vice-President
and Manager,
Eastern Region
By:
---------------------------
Name: Xxxxx Xxx
Title: Assistant Vice-President,
Corporate Banking
CREDIT LYONNAIS, NEW YORK BRANCH
(as Lender)
By:
---------------------------
Name:
-------------------------
Title:
------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
- 129 -
SCHEDULE "A" to the Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd. and Industries Cascades Inc. and Cascades Industries, Inc. and the
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
and the financial institutions named on the signature pages thereof, as Lenders,
with Royal Bank of Canada, as Arranger and as Agent
COMMITMENTS AND ADDRESSES OF LENDERS
NAME AND ADDRESS REVOLVING TERM FACILITY OVERDRAFT AND L/C AGGREGATE
FACILITY COMMITMENT COMMITMENT COMMITMENT
COMMITMENT
CANADIAN LENDING OFFICE: Canadian
Royal Bank of Canada Overdraft and L/C
Business Banking Centre Facility:
0 Xxxxx Xxxxx-Xxxxx, 0xx Xxxxx (not shared)
North Wing
Xxxxxxxx, Xxxxxx X0X 0X0
Fax: (000) 000-0000 US$900,000 US$24,100,000 US$10,000,000 US$35,000,000
3.0% 24.10% 100% 24.14%
US LENDING OFFICE:
Royal Bank of Canada
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, X.X.00000-0000
Fax: (000) 000-0000
CANADIAN LENDING OFFICE
National Bank of Canada
000 xx Xx Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxx X0X 0X0 US$8,700,000 US$19,300,000 US$28,000,000
Fax: (000) 000-0000 29.0% 19.3% 19.31%
US LENDING OFFICE:
National Bank of Canada,
NewYork Branch
000 Xxxx, 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
CANADIAN LENDING OFFICE:
Bank of America Canada
000 Xxxxx Xx. Xxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Fax: (000) 000-0000 US$6,200,000 US$13,800,000 US$20,000,000
20.67% 13.8% 13.79%
US LENDING OFFICE:
Bank of America NT & SA
0000 Xxxxxxx Xxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
A-1
CANADIAN LENDING OFFICE:
Bank of Montreal
000 Xx-Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxx X0X 0X0
Fax: (000) 000-0000 US$6,200,000 US$13,800,000 US$20,000,000
20.67% 13.8% 13.79%
US LENDING OFFICE:
Bank of Montreal
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
US LENDING OFFICE: US Overdraft
Comerica Bank Facility:
Mail Code 3328 (not shared)
000 Xxxxxxxx Xxx., 00xx Xxxxx
Xxxxxxx, XX 00000-0000 US$600,000 US$12,400,000 US$5,000,000 US$18,000,000
Fax: (000) 000-0000 2.00% 12.40% 100% 12.41%
CANADIAN LENDING OFFICE:
Bank of Tokyo-Mitsubishi (Canada)
000 xx xx Xxxxxxxxxxx Xx. Xxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx X0X 0X0
Fax: (000) 000-0000
US$3,700,000 US$8,300,000 US$12,000,000
US LENDING OFFICE: 12.33% 8.30% 8.28%
The Bank of Tokyo-Mitsubishi, Ltd.
New York Branch
US Corporate Banking Division
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, X.X. 00000-0000
Fax: (000) 000-0000
CANADIAN LENDING OFFICE:
Credit Lyonnais Canada
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Fax: (000) 000-0000
US LENDING OFFICE: US$3,700,000 US$8,300,000 US$12,000,000
Credit Lyonnais, New York Branch 12.33% 8.30% 8.28%
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, X.X. 00000
Fax: (000) 000-0000
TOTAL US$30,000,000 US$100,000,000 US$15,000,000 US$145,000,000
100% 100% 100% 100%
NOTE: The percentages set forth above are merely for ease of reference and do
not necessarily represent the actual "Lender's Proportion" of each
Lender
A-2
SCHEDULE "B" to the Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd. and Industries Cascades Inc. and Cascades Industries, Inc. and the
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
and the financial institutions named on the signature pages thereof, as Lenders,
with Royal Bank of Canada, as Arranger and as Agent
FORM OF ADOPTING INSTRUMENT
(Sections 1.1 and 3.2.1)
TO: ROYAL BANK OF CANADA, AS AGENT
Reference is made to a Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd., Industries Cascades Inc., Cascades Industries, Inc., and other
Restricted Subsidiaries parties thereto from time to time, as Borrowers, Royal
Bank of Canada, as Agent, and Royal Bank of Canada and the other financial
institutions parties thereto, as Lenders, pursuant to which credit facilities
aggregating US$145,000,000 have been made available to the Borrowers (the
"CREDIT AGREEMENT"). Capitalized terms used herein, but not defined herein,
shall have the meanings ascribed to them in the Credit Agreement.
By executing and delivering this Adopting Instrument, the undersigned (the
"ADDITIONAL BORROWER"), hereby becomes a borrower under the Credit Agreement,
hereby confirms that all representations and warranties contained in the Credit
Agreement (except those set forth in Section 2.1.8 which shall be read as if
they referred to the most recent financial statements delivered by the Borrowers
to the Agent, and except those set forth in Sections 2.1.15 and 2.1.16),
including without limitation those relating to the undersigned as Borrower and
as Credit Party, are true and correct in all respects, and hereby agrees to be
bound by and accepts on and after the date hereof all the obligations created
pursuant to the terms and provisions of the Credit Agreement applicable to a
Borrower.
The following are the particulars of the undersigned:
- name:
------------------------------------------------------------------------
- jurisdiction of incorporation:
-----------------------------------------------
- head/registered office:
------------------------------------------------------
- principal place of business and operations:
----------------------------------
- address for purposes of notices under the Credit Agreement:
------------------
- the undersigned will be a
---------------------------------------------------
(Canadian Lender/US Lender)
- the proposed effective date of this Adopting Instrument:
--------------------
B-1
This Adopting Instrument shall be construed in accordance with and governed by
the laws of the Province of Quebec, Canada.
EXECUTED at _________________, this __________ day of _______________, ________.
[ADOPTING PERSON]
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
INTERVENTION AND CONFIRMATION OF GUARANTEES
Industries Cascades Inc. and Cascades Industries, Inc. [ADD NAME OF OTHER
RESTRICTED SUBSIDIARIES, IF ANY] hereby acknowledge having taken cognizance of
the foregoing Adopting Instrument and confirm that their respective
Subsidiaries' Guarantee dated [INSERT DATES] granted in respect of the Credit
Agreement (as defined above) applies fully and without restriction for the
benefit of all Lenders and the Agent under the said Credit Agreement so as to
cover, to the fullest extent permitted by law, all Borrowings and other
liabilities of [NAME OF ADDITIONAL BORROWER] as an Additional Borrower under the
said Credit Agreement.
CONFIRMED at _________________, this __________ day of ______________, ________.
INDUSTRIES CASCADES INC.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
CASCADES INDUSTRIES, INC.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
B-2
[NAME OF RESTRICTED SUBSIDIARIES]
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
ACCEPTED
at _________________, _________________,
this ______ day of __________________,
19_____.
ROYAL BANK OF CANADA, as Agent
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
B-3
SCHEDULE "C" to the Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd. and Industries Cascades Inc. and Cascades Industries, Inc. and the
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
and the financial institutions named on the signature pages thereof, as Lenders,
with Royal Bank of Canada, as Arranger and as Agent
FORM OF BANKERS' ACCEPTANCE
(Section 1.1)
BANKERS' ACCEPTANCE No. ___________________
To:_______________________________________ Due:_____________________________________________ 19 ___
Bank
__________________________________________ ___________________________ days after date (without grace)
Address
For value received pay to the order of the undersigned drawer
ACCEPTED the sum of ________________________________________________
__________________________________________ _____________________________ Dollars ($_________________)
Payable at
------------------------------------------
__________________________________________ Value Received, and Charge to the Account of:
For:______________________________________ ___________________________________________________
__________________________________________ Per: ______________________________________________
Authorized Signature
__________________________________________ Per: ______________________________________________
Authorized Signature
[GRAPHIC OMITTED]
SAMPLE ONLY
C-1
SCHEDULE "D" to the Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd. and Industries Cascades Inc. and Cascades Industries, Inc. and the
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
and the financial institutions named on the signature pages thereof, as Lenders,
with Royal Bank of Canada, as Arranger and as Agent
FORM OF DISCOUNT NOTE
(Section 1.1)
Issue Date: 19
---------------------------------------- -----
Maturity Date: 19
---------------------------------------- -----
[NAME OF BORROWER] for value received, hereby promises to pay to or to the order
of (NAME OF LENDER)
-----------------------------------------------------------------------------
on the above-mentioned Maturity Date, without grace, the sum of
--------------------------------------------------------------------------------
($ ) in lawful money of Canada at
-------------------
(NAME AND ADDRESS OF LENDER WHERE PAYMENT IS TO BE MADE).
--------------------------------------------------------------------------------
[NAME OF BORROWER]
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
D-1
CREDIT AGREEMENT E-3 SCHEDULE "E" to the Credit Agreement dated as of July 23,
1998 among Xxxxxxx Papers Ltd. and Industries Cascades Inc. and Cascades
Industries, Inc. and the other Restricted Subsidiaries parties thereto from time
to time, as Borrowers, and the financial institutions named on the signature
pages thereof, as Lenders, with Royal Bank of Canada, as Arranger and as Agent
PERMITTED ENCUMBRANCES
(Sections 1.1 and 11.2.1)
"PERMITTED ENCUMBRANCES" means as of any particular time, any of the following
liens, privileges, charges, encumbrances or other rights, PROVIDED THAT the
amounts secured by the Liens and encumbrances set forth in paragraphs (m) and
(n) below may at no time exceed in the aggregate an amount equivalent to 10% of
Tangible Net Assets:
(a) Liens for taxes, rates, assessments or governmental charges or levies
(i) not at the time due and delinquent, or
(ii) which are due and delinquent but the validity of which is
being contested in good faith at the time and in respect of
which any Credit Party or its relevant Subsidiary shall have
set aside on its books reserves deemed to be adequate therefor
and not resulting in a qualification by the Auditors;
(b) undetermined or inchoate Liens arising or potentially arising under
statutory provisions which have not at the time been filed or
registered in accordance with applicable law or of which written notice
has not been duly given in accordance with applicable law or which,
although filed or registered, relate to obligations not due or
delinquent;
(c) easements, rights of way, servitudes or other similar rights in land
(including, without in any way limiting the generality of the
foregoing, easements, rights of way and servitudes for sewers, drains,
steam, gas and oil pipelines, gas and water mains, electric light and
power and telephone or telegraph lines and other forms of
communication, conduits, poles, wires or other incidental equipment)
granted to or reserved or taken by other persons which in the opinion
of the Agent's Counsel will not in the aggregate impair or interfere
with the use of property for the purposes for which it is held by any
Credit Party or its relevant Subsidiary and mortgages of and other
liens and encumbrances against the said easements, rights of way,
servitudes or other similar rights in land;
(d) the rights reserved to or vested in municipalities or governmental or
other public authorities or agencies by statutory provisions or by the
terms of leases, licences, franchises, grants or permits, which affect
any land, to terminate the leases, licenses, franchises, grants or
permits or to require annual or other periodic payments as a condition
of the continuance thereof;
(e) reservations in any original grants from the Crown of any land or
interest therein, statutory exceptions to title, and reservations of
E-1
minerals rights (including coal, oil and natural gas) in any grants
from the Crown or from any other predecessors in title;
(f) Liens to public utilities or to any municipalities or governmental or
other public authorities when required by the utility, municipality,
governmental or other public authority in connection with the supply of
services or utilities to any Credit Party or its Subsidiaries;
(g) any builder's, mechanic's, architect's, supplier's of material,
labourer's, materialmen's or other similar Liens incidental to the
construction, improvement or maintenance of any property of any Credit
Party or its relevant Subsidiary or out of the furnishing of materials
or supplies, where the action to enforce the same has not been
proceeded to a final judgment, is being defended in good faith by such
Credit Party or its relevant Subsidiary and in respect of which such
Credit Party or its relevant Subsidiary shall set aside on its books
reserves deemed to be adequate therefor and not resulting in a
qualification by the Auditor;
(h) Liens arising out of judgments or awards with respect to which any
Credit Party or its Subsidiaries shall in good faith be prosecuting an
appeal or proceeding for review and with respect to which such Credit
Party or its relevant Subsidiary shall have secured a stay of execution
pending the appeal or proceedings for review or for which security
acceptable to the Agent has been posted by such Credit Party or its
relevant Subsidiary;
(i) Liens or deposits in connection with bids, tenders and contracts of any
Credit Party or its Subsidiaries or to secure workers' compensation,
unemployment insurance or other similar statutory assessments, or to
secure costs of litigation when required by law, and surety or appeal
bonds;
(j) warehousemen's, carriers', landlords' or other similar common law
Liens, where the action to enforce the same has not proceeded to final
judgment, is being defended in good faith by any Credit Party or its
Subsidiaries and in respect of which such Credit Party or its relevant
Subsidiary shall have set aside on its books reserves deemed to be
adequate therefor and not resulting in qualification by the Auditors;
(k) minor title defects or irregularities affecting properties which do not
in the aggregate impair or interfere with the use of the property for
the purposes for which it is held by any Credit Party;
(l) leases of equipment by any Credit Party, the value of which equipment
is not, in the aggregate, material to the value of such Credit Party;
(m) Purchase Money Obligations;
(n) sale-leaseback transactions;
(o) a hypothec of Cdn$601,269.20 granted by Xxxxxxx in favour of SITQ
Industrial Inc. securing rights resulting from a lease of premises and
affecting all corporeal movables, present and future, including
equipment, machinery, computers, word-processing apparatuses, office
E-2
furniture, etc., located at 0000, Xxxxxxxxx xxx Xxxxxxxxxxx, Xxxxx,
Xxxxxxxx of Quebec, as registered on January 20, 1997 under number
00-0000000-0000;
(p) for a period of 45 days after the Closing Date, any filings or
registrations in respect of Liens granted in respect of the Existing
Facilities;
E-3
SCHEDULE "F" to the Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd. and Industries Cascades Inc. and Cascades Industries, Inc. and the
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
and the financial institutions named on the signature pages thereof, as Lenders,
with Royal Bank of Canada, as Arranger and as Agent
FORM OF SUBSIDIARY GUARANTEES
(Sections 1.1 and 9.2)
FORMS OF CANADIAN SUBSIDIARY GUARANTEE
(Limited guarantee, with step-up provisions),
CANADIAN SUBSIDIARY GUARANTEE (Unlimited guarantee)
and US SUBSIDIARY GUARANTEE
FOLLOW
F-1
CANADIAN SUBSIDIARY GUARANTEE
(LIMITED GUARANTEE, WITH STEP-UP PROVISIONS)
This Agreement is made on the date and at the place hereinafter mentioned.
BETWEEN: INDUSTRIES CASCADES INC., a corporation duly incorporated pursuant to
the laws of the Province of Quebec, having its head office at Xxxxxxx
Xxxxx, Xxxxxxxx xx Xxxxxx, Xxxxxx, represented by Xxxxxxx Xxxxxxxx, its
president, and Xxxxxxx Xxxxxx, its treasurer, duly authorized for the
purposes hereof by and in virtue of a resolution enacted by its
directors on July 22, 1998
(the "GUARANTOR")
AND: ROYAL BANK OF CANADA, a Canadian chartered bank, having its head office
at Montreal, Province of Quebec, acting for itself and in its capacity
of Arranger and of Agent for the Lenders, together with any successor
agent which may be appointed from time to time and its assigns
(the " AGENT")
RECITALS
WHEREAS Xxxxxxx Papers Ltd., Industries Cascades Inc. and Cascades Industries,
Inc. (collectively with the other Restricted Subsidiaries which may from time to
time become parties to the hereinafter mentioned credit agreement, the
"BORROWERS" and, individually, a "BORROWER"), as borrowers, the lenders from
time to time party thereto, together with their respective successors and
assigns (collectively the "LENDERS") and the Agent have entered or will be
entering into a credit agreement dated as of July23, 1998 providing for credit
facilities aggregating US$145,000,000 to be made available thereunder by the
Lenders to the Borrowers, subject to the terms and conditions therein set forth
(said credit agreement as may be amended, restated, supplemented or otherwise
modified from time to time, including, without limitation, as the case may be,
for purposes of increasing the credit facilities to be made available thereunder
to the Borrowers, being herein referred to as the "CREDIT AGREEMENT"); all
capitalized words and expressions used herein shall have the same meaning as
ascribed thereto in the Credit Agreement unless otherwise defined herein or
unless the context otherwise requires;
AND WHEREAS it is a condition precedent to the disbursement of funds to the
Borrowers under the Credit Agreement that the Guarantor guarantees, INTER ALIA,
the fulfilment of the obligations of Xxxxxxx Papers Ltd. ("XXXXXXX") under the
Credit Agreement and the Operative Documents.
F-2
NOW, in consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
parties agree as follows:
1. GUARANTEE: The Guarantor hereby guarantees the performance of the
following obligations (hereinafter collectively referred to as the
"OBLIGATIONS"): (I) the prompt payment, as and when due and payable, of
all amounts now or hereafter owing by Xxxxxxx to the Lenders and the
Agent under or in connection with the Credit Agreement or any other
Operative Document, (II) the strict performance and observance by
Xxxxxxx of all agreements, warranties, representations, covenants,
conditions and obligations (whether actual or contingent, whether now
existing or hereafter arising, whether or not for the payment of money,
and including, without limitation, any obligation or liability to pay
damages) pursuant to or in connection with the Credit Agreement or any
other Operative Document and (III) the prompt payment of the legitimate
costs (including, without limitation, all reasonable fees, charges and
disbursements of counsel) that the Lenders and the Agent may incur to
recover the obligations described hereinabove. This Guarantee of the
Guarantor is unconditional and irrevocable.
2. LIMITATION ON GUARANTEE:
(a) The liability of the Guarantor under this Guarantee given
under paragraph 1 above is expressly limited to the amount of
US$62,000,000,
(b) If, from time to time, the book value or the realization value
of the assets of the Guarantor, whichever is greater, less the
sum of its liabilities and its issued and paid-up share
capital account increases over the amount referred to in
paragraph 2(a) hereof (as increasing from time to time
pursuant thereto) by an amount equal to or in excess of
US$100,000 (or the Equivalent Amount in Canadian Dollars), and
the Guarantor is then able to discharge its liabilities when
due, the undersigned agrees that its liability under this
Guarantee shall forthwith be increased to an amount as
represents the then book value or the realization value of the
assets of the Guarantor, whichever is greater, less the sum of
its liabilities and its issued and paid-up share capital
account. For greater certainty, the issued and paid-up share
capital account of the Guarantor equals the whole of the
consideration received by the Guarantor for the shares issued
by the Guarantor and paid into such account pursuant to
sections 123.48 and 123.49 of the COMPANIES ACT (Quebec) less
any reduction made by the undersigned in such account in
accordance with section 123.50, 123.51 or 123.62 of the
COMPANIES ACT (Quebec).
For the purposes hereof, the Guarantor shall not less
frequently than annually determine the realizable value of the
assets of the Guarantor pursuant to section 123.167 of the
COMPANIES ACT (Quebec) and, following such determination, the
Guarantor shall promptly deliver to the Agent a certificate of
one of its Responsible Officers stating:
F-3
(i) the amount equal to the book value or the realization
value of the assets of the Guarantor, whichever is
greater, less the sum of its liabilities and paid-up
share capital account, and
(ii) whether the Guarantor is able to discharge its
liabilities when due.
3. REPRESENTATIONS; WARRANTIES; COVENANTS: The Guarantor hereby represents
and warrants that each representation, warranty and agreement made by
the Borrowers in the Credit Agreement inasmuch as applicable to the
Guarantor is hereby made by the Guarantor as if incorporated by
reference herein, and is hereby confirmed to be true and correct. The
Guarantor furthermore hereby agrees to be bound by all such
representations and warranties, covenants, obligations,
acknowledgements and other terms and conditions applicable under the
Credit Agreement to a Credit Party to the same extent as if it were a
direct party thereto.
4. GUARANTEE NOT AFFECTED: The Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and
notice of or proof of reliance by the Agent and the Lenders upon this
Guarantee or acceptance of this Guarantee; the Operative Documents, and
any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in
reliance upon this Guarantee; and all dealings between the Guarantor or
the Borrowers, on the one hand, and the Agent and the Lenders, on the
other, shall likewise be conclusively presumed to have been had or
consummated in reliance upon this Guarantee. The Guarantor waives
diligence, presentment, protest, demand for payment and notice of
default or non payment to or upon the Guarantor or the Borrowers. This
Guarantee shall not be affected by the loss or diminution of capacity
of any Borrower or the Guarantor or by any change in the name of any
Borrower, or by the acquisition of the business of any Borrower by
another corporation, firm or Person, or by any change whatsoever in the
objects, capital structure or constitution of any Borrower, or by any
Borrower or the business of any Borrower being amalgamated with a
corporation but shall, notwithstanding the occurrence of any such
event, continue to exist and apply to the full extent as if such event
had not happened.
5. STATUS OF PARTIES: All moneys, advances, renewals and credits in fact
borrowed or obtained and all debts and liabilities of Xxxxxxx under the
Credit Agreement and the other Operative Documents shall be deemed
valid and to form part of the debts and liabilities hereby guaranteed,
notwithstanding any lack or limitation of status or of power,
incapacity or disability of Xxxxxxx or of the directors, partners or
agents thereof, or that Xxxxxxx may not be a legal or suable entity, or
any irregularity, defect or informality in the execution of the Credit
Agreement, this Guarantee and the other Operative Documents, the whole
whether known to the Agent or not; and any sum which may not be
recoverable from the Guarantor pursuant to this Guarantee shall be
recoverable from the Guarantor as solidary codebtor in respect thereof
and shall be paid to the Agent on demand with interest and accessories
as herein provided.
F-4
6. STATUS OF AGENT AND LENDERS: This Guarantee shall continue and be
enforceable notwithstanding any amalgamation of the Agent or of any of
the Lenders with any other bank(s), financial institution(s) or other
corporation(s) or Person(s).
7. CONTINUING GUARANTEE: This Guarantee shall be a continuing, absolute
and unconditional guarantee, and it shall bind the Guarantor until all
debts and liabilities of the Borrower intended to be guaranteed hereby,
have been fully and indefeasibly paid and satisfied; and the Guarantor
hereby irrevocably renounces every right it may acquire to be released
from its guarantee pursuant to Article 2366 of the CIVIL CODE OF
QUEBEC. The Guarantor also irrevocably renounces any rights it may
acquire to be released from this Guarantee pursuant to Article 2362 of
the CIVIL CODE OF QUEBEC. Within 30 days of the request of the Agent,
made at any time, the Guarantor shall renew its guarantee hereunder by
executing such documents for this purpose as may be requested by the
Agent or the Lenders, acting reasonably.
8. GUARANTEE NOT AFFECTED BY RELEASES: Without in any way limiting or
lessening the liability of the Guarantor hereunder, the Agent and any
of the Lenders may grant time, renewals, extensions, indulgences,
releases and discharges to, may take security from, and give up or
release any or part of the guarantees obtained from other parties or of
security held, may abstain from taking, perfecting, registering or
renewing guarantees or security or from realizing on guarantees or
security, may accept compositions and otherwise deal with any Borrower
and with any other person or persons, including the Guarantor or other
guarantors, and dispose of any guarantees or security held by the Agent
or any Lender as it may see fit, and all dividends, compositions and
monies received by the Agent or any Lender from a Borrower or from any
other Person or estate, capable of being applied in reduction of the
debts and liabilities hereby guaranteed, shall be considered for all
purposes as payment which the Agent or any Lender shall have the right
to apply as it may see fit, not being bound by the law of imputation,
and the Agent and any Lender shall be entitled to prove against the
estate of any Borrower or the Guarantor upon any insolvency or winding
up, in respect of the whole of said debts and liabilities; no loss of
or in respect of any guarantees or security received by the Agent or
any Lender from a Borrower or others shall in any way, limit, modify,
reduce, release or otherwise affect the liability of the Guarantor
hereunder; the Guarantor shall have no right to be subrogated in any of
the rights (whether contractual, under Applicable Laws or otherwise) of
the Agent or any Lender until the Agent and the Lenders shall have
indefeasibly received payment in full of their claims against the
Borrowers with interest and costs.
No settlement or discharge of the Obligations shall be effective if any
payment by any Credit Party in respect of the Obligations is avoided or
reduced by virtue of any provisions or enactments relating to
bankruptcy, insolvency, liquidation or similar laws of general
application from time to time, and if such payment is so avoided or
reduced, the Agent and the Lenders shall be entitled to recover the
amount of such payment as if such settlement or discharge had not
occurred.
9. VALUATION: If any circumstances arise necessitating the Agent or a
Lender to file its claim against the successors and assigns of a
Borrower or the Guarantor and to value its security, it will be
entitled to place such valuation as it may in its reasonable discretion
F-5
see fit, and the filing of such claim and the valuation of its security
shall in no way prejudice or restrict its rights against the Guarantor.
10. NO BENEFIT OF DISCUSSION OR DIVISION: When the Agent or any Lender is
pursuing its rights and remedies against the Guarantor under this
Guarantee or any other Operative Document to which the Guarantor is a
party, the Agent and any Lender may, but shall be under no obligation
to, pursue such rights and remedies as they may have against the
Borrowers, other guarantors or any other Person or against any
collateral security or guarantee they may hold before being entitled to
payment from the Guarantor of all and every of the debts and
liabilities hereby guaranteed and any refusal, negligence or failure by
the Agent or any Lender to pursue such other rights or remedies or to
collect any payments from a Borrower or any such other Person or to
realize upon any such collateral security or guarantee or to exercise
any right of set-off or compensation, or any release of a Borrower or
any such other Person or of any such collateral security, guarantee or
right of set-off or compensation, shall not relieve the Guarantor of
any liability under this Guarantee, and shall not impair or affect the
rights and remedies, whether express, implied or available as a matter
of law, of the Agent or any Lender against the Guarantor; the Guarantor
hereby waives all benefits of discussion and division.
11. GUARANTEE IS IN ADDITION TO OTHER GUARANTEES: The Guarantee of the
Guarantor is in addition to and not in substitution for any other
guarantee, by whomsoever given, at any time held by the Agent or any of
the Lenders and for any present and future obligation to the Agent or
to the Lenders or any of them incurred or arising otherwise than under
a guarantee, and is without prejudice to any other guarantees or
security by whomsoever given or held at any time by the Agent or the
Lenders or any of them.
12. PAYMENT ON DEMAND: The Guarantor shall make payment to the Agent of the
amount of its liability hereunder forthwith after demand therefor is
made in writing; the liability of the Guarantor shall bear interest
from the date of such demand at the applicable rates set forth in
Sections 4.7 and 12.1 of the Credit Agreement. The Guarantor agrees
that whenever, at any time, or from time to time, it shall make any
payment to the Agent or any Lender on account of the Obligations, it
will notify the Agent in writing that such payment is made for such
purpose under this Guarantee. The Guarantor hereby agrees that any
payments in respect of the Obligations pursuant to this Guarantee will
be paid to the Agent without set-off, compensation or counterclaim in
the same currency in which the Obligations are denominated. If the
Agent receives any payment from or for the account of the Guarantor in
any currency other than the currency in which the Obligations are
denominated, that payment shall constitute satisfaction of the
Obligations only to the extent of the amount of such currency that the
Agent, in accordance with its normal procedures, could purchase with
the amount of the other currency received by it from the Guarantor on
the first business day after the day of receipt.
13. SUBORDINATION AND POSTPONEMENT: All rights that the Guarantor may at
any time have against any Borrower, any other Credit Party or any
collateral for or in respect of the Obligations (including rights of
subrogation, exoneration, reimbursement and contribution and whether
arising under Applicable Law or otherwise), and all obligations that
F-6
any Borrower or any other Credit Party may at any time have to the
Guarantor (including, without limitation, all intercompany receivables
of the Guarantor from any Borrower or any other Credit Party), are
hereby expressly subordinated and postponed to the prior payment,
observance and performance in full of the Obligations, PROVIDED that
unless an Event of Default shall have occurred -------- and be
continuing or unless the Agent gives notice to the Guarantor of the
occurrence of a Default, the Guarantor may retain any amount paid to it
or recovered by it on account of any right or obligation subordinated
and postponed pursuant to this Section and may enforce any of its
rights and attempt to obtain payment or performance of any of the
obligations owed to it which are subordinated and postponed pursuant to
this Section.
14. SOLIDARY CODEBTOR: the Guarantor hereby binds itself with the Borrowers
as solidary codebtor for the repayment of the debts and liabilities
hereby guaranteed and this Guarantee shall be binding upon the
Guarantor and also upon the assigns and successors of the Guarantor and
will extend to and enure to the benefit of the successors and assigns
of the Agent and the Lenders and their respective assigns. The
Obligations of the Guarantor under this Guarantee are independent of
the obligations of the Borrowers and each of the other guarantors under
the Credit Agreement, and a separate action or actions may be brought
and prosecuted against the Guarantor separately or against the
Guarantor and any one or more of such other guarantors solidarily, or
against some separately and some solidarily, whether or not the
Borrowers be joined in any such action or actions. The Guarantor
waives, to the full extent permitted by law, the benefit of any
prescription (as such term is used in the CIVIL CODE OF QUEBEC) or
statute of limitations affecting its liability hereunder or the
enforcement thereof.
15. AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS: The Guarantor shall
remain obligated under this Guarantee notwithstanding that, without any
reservation of rights against the Guarantor and without notice to or
further assent by the Guarantor, any demand for payment of or reduction
in the principal amount of any of the Obligations made by the Agent or
any Lender may be rescinded by the Agent or such Lender, any of the
Obligations may be continued, the Obligations, or the liability of any
other party upon or for any part thereof, or any collateral security or
guarantee therefor or right of set-off or compensation with respect
thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, increased, modified, accelerated, compromised,
waived, surrendered or released by the Agent or any Lender, this
Guarantee or any of the other Operative Documents may be amended,
modified, supplemented or terminated, in whole or in part, as the Agent
or the Lenders may deem advisable from time to time, or any Lien,
collateral security, guarantee or right of set-off or compensation at
any time held by the Agent or any Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released.
Neither the Agent nor any Lender shall have any obligation to notify
the Guarantor in that regard and the Guarantee shall remain in force
and binding upon the Guarantor even if the Guarantor is not notified of
any of the foregoing.
16. TAXES: The Guarantor agrees to indemnify and hold the Agent and the
Lenders harmless for any Taxes which at any time may be assessed or is
F-7
otherwise required to be withheld or deducted from or is otherwise
payable by the Guarantor or the Borrower in connection with any payment
to the Agent under this Guarantee. The Guarantor shall make all
payments to the Lenders and the Agent pursuant to this Guarantee and
the other Operative Documents to which the Guarantor is a party without
set-off, compensation or counterclaim, free and clear of, and exempt
from, and without deduction for or on account of, any Tax.
Furthermore, the parties agree that Section 8.5 of the Credit Agreement
entitled "Manner of Payment and Taxes" is incorporated herein by
reference and applies MUTATIS MUTANDIS.
17. NOTICES: All notices provided for hereunder shall be given in
accordance with the provisions of the Credit Agreement as if the
Guarantor were a party thereto. The address and telecopier number of
the Guarantor are as set out hereafter:
INDUSTRIES CASCADES INC.
00 Xxxxx-Xxxxxxxx Xxxx.
Xxxxxxx, Xxxxxx
X0X 0X0
Attention of: The Corporate Controller
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Papers Ltd.
000 Xxxxxxxxxx Xx. Xxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: The Legal Counsel
Fax: (000) 000-0000
18. NO WAIVER, CUMULATIVE REMEDIES: No failure to exercise and no delay in
exercising, on the part of the Agent or the Lenders, any right, remedy,
power or privilege hereunder or under the other Operative Documents,
shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder or under
the other Operative Documents preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein and under the other
Operative Documents are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
19. ENTIRE AGREEMENT: This Guarantee, together with the Credit Agreement
and the other Operative Documents, constitutes the entire agreement
between the parties with respect to the subject matter hereof and
supersedes all prior negotiations, undertakings, representations and
understandings in respect thereof.
F-8
20. GOVERNING LAW: This Guarantee shall be construed in accordance with the
laws of the Province of Quebec and federal laws of Canada applicable
therein.
21. JUDGMENT CURRENCY: If for the purpose of obtaining judgment in any
court in any jurisdiction with respect to this Guarantee, it becomes
necessary to convert into the currency of such jurisdiction (herein
called the "JUDGMENT CURRENCY") any amount due under this Guarantee in
any currency other than the Judgment Currency, then conversion shall be
made at the rate of exchange prevailing on the business day preceding
(A) the date of actual payment of the amount due, in the case of
proceedings in the courts of any jurisdiction that will give effect to
such conversion being made on such day, or (B) the day on which the
judgment is given, in the case of proceedings in the courts of the
Province of Quebec or of any other jurisdiction (the applicable date as
of which such conversion is made pursuant to this Section being
hereinafter called the "JUDGMENT CONVERSION DATE"). For this purpose,
"RATE OF EXCHANGE" means the rate at which the Agent would be prepared
on the relevant date, to sell the currency of the amount due hereunder
in Xxxxxxxx xx Xxxxxxx, Xxxxxx against the Judgment Currency. In the
event that there is a change in the rate of exchange prevailing between
the Judgment Conversion Date and the date of payment of the amount due,
the Guarantor will, on the date of payment, pay such additional amounts
(if any) as may be necessary to ensure that the amount paid on such
date is the amount in the Judgment Currency which, when converted at
the rate of exchange prevailing on the date of payment, is the amount
then due under this Guarantee in US Dollars or Canadian Dollars, as the
case may be. Any additional amount due under this Section will be due
as a separate debt and shall not be affected by judgment being obtained
for any other sums due under or in respect of this Guarantee.
22. INVALIDITY: To the full extent permitted by applicable law, any
provision of this Guarantee which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability, without invalidating
the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
23. SUCCESSORS AND ASSIGNS: This Guarantee enures to the benefit of the
Agent and each Lender, and their respective successors and assigns and
is binding upon the Guarantor and its successors.
24. COUNTERPARTS: This Guarantee may be executed in any number of
counterparts, each of which when executed and delivered is an original
but all of which taken together constitute one and the same instrument;
any party may execute this Guarantee by signing any counterpart of it
and may communicate such signing by telecopier or otherwise.
25. LANGUAGE: The parties confirm that they have requested that this
Guarantee and all documents and notices contemplated thereby be drawn
up in the English Language. Les parties confirment avoir requis que
cette garantie et tous les documents et avis qui y sont envisages
soient rediges en langue anglaise.
F-9
26. CREDIT AGREEMENT: The Guarantor acknowledgeS that it has received and
read a copy of the Credit Agreement and the other Operative Documents
and is familiar with their terms and by executing this Guarantee the
Guarantor agrees to be bound by all representations and warranties,
covenants, obligations, acknowledgements and other terms and provisions
applicable to a "Credit Party" under the Credit Agreement to the same
extent and in the same manner as if the Guarantor were a direct party
thereto and the Guarantor agrees to perform all obligations required of
a "Credit Party" thereunder.
GIVEN AT _________, as of _________, _________
INDUSTRIES CASCADES INC.
Per:
-------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President
Per:
-------------------------------
Name: Xxxxxxx Xxxxxx
Title: Treasurer
ACCEPTED AT _________, as of _________, _________
ROYAL BANK OF CANADA, ACTING
FOR ITSELF AND AS AGENT
Per:
------------------------------------------
Name:
Title:
F-10
CANADIAN SUBSIDIARY GUARANTEE
(UNLIMITED GUARANTEE)
This Agreement is made on the date and at the place hereinafter mentioned.
BETWEEN: INDUSTRIES CASCADES INC., a corporation duly incorporated
pursuant to the laws of the Province of Quebec, having its
head office at Xxxxxxx Xxxxx, Xxxxxxxx xx Xxxxxx, Xxxxxx,
represented by Xxxxxxx Xxxxxxxx, its president, and Xxxxxxx
Xxxxxx, its treasurer, duly authorized for the purposes hereof
by and in virtue of a resolution enacted by its directors on
July 22, 1998
(the "GUARANTOR")
AND: ROYAL BANK OF CANADA, a Canadian chartered bank, having its
head office at Montreal, Province of Quebec, acting for itself
and in its capacity of Arranger and of Agent for the Lenders,
together with any successor agent which may be appointed from
time to time and its assigns
(the " AGENT")
RECITALS
WHEREAS Xxxxxxx Papers Ltd., Industries Cascades Inc. and Cascades Industries,
Inc. (collectively with the other Restricted Subsidiaries which may from time to
time become parties to the hereinafter mentioned credit agreement, the
"BORROWERS" and, individually, a "BORROWER"), as borrowers, the lenders from
time to time party thereto, together with their respective successors and
assigns (collectively the "LENDERS") and the Agent have entered or will be
entering into a credit agreement dated as of July 23, 1998 providing for credit
facilities aggregating US$145,000,000 to be made available thereunder by the
Lenders to the Borrowers, subject to the terms and conditions therein set forth
(said credit agreement as may be amended, restated, supplemented or otherwise
modified from time to time, including, without limitation, as the case may be,
for purposes of increasing the credit facilities to be made available thereunder
to the Borrowers, being herein referred to as the "CREDIT AGREEMENT"); all
capitalized words and expressions used herein shall have the same meaning as
ascribed thereto in the Credit Agreement unless otherwise defined herein or
unless the context otherwise requires;
AND WHEREAS it is a condition precedent to the disbursement of funds to the
Borrowers under the Credit Agreement that the Guarantor guarantees, INTER ALIA,
the fulfilment of the obligations of the Borrowers under the Credit Agreement
and the Operative Documents.
NOW, in consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
parties agree as follows:
F-11
1. GUARANTEE: The Guarantor hereby guarantees the performance of the
following obligations (hereinafter collectively referred to as the
"OBLIGATIONS"): (I) the prompt payment, as and when due and payable, of
all amounts now or hereafter owing by Cascades Industries, Inc. and
each Additional Borrower, if any, under the Credit Agreement (the
"GUARANTEED PARTIES") to the Lenders and the Agent under or in
connection with the Credit Agreement or any other Operative Document,
(II) the strict performance and observance by the Guaranteed Parties of
all agreements, warranties, representations, covenants, conditions and
obligations (whether actual or contingent, whether now existing or
hereafter arising, whether or not for the payment of money, and
including, without limitation, any obligation or liability to pay
damages) pursuant to or in connection with the Credit Agreement or any
other Operative Document and (III) the prompt payment of the legitimate
costs (including, without limitation, all reasonable fees, charges and
disbursements of counsel) that the Lenders and the Agent may incur to
recover the obligations described hereinabove. This Guarantee of the
Guarantor is unconditional and irrevocable.
2. REPRESENTATIONS; WARRANTIES; COVENANTS: The Guarantor hereby represents
and warrants that each representation, warranty and agreement made by
the Borrowers in the Credit Agreement inasmuch as applicable to the
Guarantor is hereby made by the Guarantor as if incorporated by
reference herein, and is hereby confirmed to be true and correct. The
Guarantor furthermore hereby agrees to be bound by all such
representations and warranties, covenants, obligations,
acknowledgements and other terms and conditions applicable under the
Credit Agreement to a Credit Party to the same extent as if it were a
direct party thereto.
3. GUARANTEE NOT AFFECTED: The Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and
notice of or proof of reliance by the Agent and the Lenders upon this
Guarantee or acceptance of this Guarantee; the Operative Documents, and
any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in
reliance upon this Guarantee; and all dealings between the Guarantor or
the Borrowers, on the one hand, and the Agent and the Lenders, on the
other, shall likewise be conclusively presumed to have been had or
consummated in reliance upon this Guarantee. The Guarantor waives
diligence, presentment, protest, demand for payment and notice of
default or non payment to or upon the Guarantor or the Borrowers. This
Guarantee shall not be affected by the loss or diminution of capacity
of any Borrower or the Guarantor or by any change in the name of any
Borrower, or by the acquisition of the business of any Borrower by
another corporation, firm or Person, or by any change whatsoever in the
objects, capital structure or constitution of any Borrower, or by any
Borrower or the business of any Borrower being amalgamated with a
corporation but shall, notwithstanding the occurrence of any such
event, continue to exist and apply to the full extent as if such event
had not happened.
4. STATUS OF PARTIES: All moneys, advances, renewals and credits in fact
borrowed or obtained and all debts and liabilities of the Guaranteed
Parties or any of them under the Credit Agreement and the other
Operative Documents shall be deemed valid and to form part of the debts
and liabilities hereby guaranteed, notwithstanding any lack or
limitation of status or of power, incapacity or disability of the
F-12
Guaranteed Parties or any of them or of the directors, partners or
agents thereof, or that the Guaranteed Parties or any of them may not
be a legal or suable entity, or any irregularity, defect or informality
in the execution of the Credit Agreement, this Guarantee and the other
Operative Documents, the whole whether known to the Agent or not; and
any sum which may not be recoverable from the Guarantor pursuant to
this Guarantee shall be recoverable from the Guarantor as solidary
codebtor in respect thereof and shall be paid to the Agent on demand
with interest and accessories as herein provided.
5. STATUS OF AGENT AND LENDERS: This Guarantee shall continue and be
enforceable notwithstanding any amalgamation of the Agent or of any of
the Lenders with any other bank(s), financial institution(s) or other
corporation(s) or Person(s).
6. CONTINUING GUARANTEE: This Guarantee shall be a continuing, absolute
and unconditional guarantee, and it shall bind the Guarantor until all
debts and liabilities of the Borrower intended to be guaranteed hereby,
have been fully and indefeasibly paid and satisfied; and the Guarantor
hereby irrevocably renounces every right it may acquire to be released
from its guarantee pursuant to Article 2366 of the CIVIL CODE OF
QUEBEC. The Guarantor also irrevocably renounces any rights it may
acquire to be released from this Guarantee pursuant to Article 2362 of
the CIVIL CODE OF QUEBEC. Within 30 days of the request of the Agent,
made at any time, the Guarantor shall renew its guarantee hereunder by
executing such documents for this purpose as may be requested by the
Agent or the Lenders, acting reasonably.
7. GUARANTEE NOT AFFECTED BY RELEASES: Without in any way limiting or
lessening the liability of the Guarantor hereunder, the Agent and any
of the Lenders may grant time, renewals, extensions, indulgences,
releases and discharges to, may take security from, and give up or
release any or part of the guarantees obtained from other parties or of
security held, may abstain from taking, perfecting, registering or
renewing guarantees or security or from realizing on guarantees or
security, may accept compositions and otherwise deal with any Borrower
and with any other person or persons, including the Guarantor or other
guarantors, and dispose of any guarantees or security held by the Agent
or any Lender as it may see fit, and all dividends, compositions and
monies received by the Agent or any Lender from a Borrower or from any
other Person or estate, capable of being applied in reduction of the
debts and liabilities hereby guaranteed, shall be considered for all
purposes as payment which the Agent or any Lender shall have the right
to apply as it may see fit, not being bound by the law of imputation,
and the Agent and any Lender shall be entitled to prove against the
estate of any Borrower or the Guarantor upon any insolvency or winding
up, in respect of the whole of said debts and liabilities; no loss of
or in respect of any guarantees or security received by the Agent or
any Lender from a Borrower or others shall in any way, limit, modify,
reduce, release or otherwise affect the liability of the Guarantor
hereunder; the Guarantor shall have no right to be subrogated in any of
the rights (whether contractual, under Applicable Laws or otherwise) of
the Agent or any Lender until the Agent and the Lenders shall have
indefeasibly received payment in full of their claims against the
Borrowers with interest and costs.
F-13
No settlement or discharge of the Obligations shall be effective if any
payment by any Credit Party in respect of the Obligations is avoided or
reduced by virtue of any provisions or enactments relating to
bankruptcy, insolvency, liquidation or similar laws of general
application from time to time, and if such payment is so avoided or
reduced, the Agent and the Lenders shall be entitled to recover the
amount of such payment as if such settlement or discharge had not
occurred.
8. VALUATION: If any circumstances arise necessitating the Agent or a
Lender to file its claim against the successors and assigns of a
Borrower or the Guarantor and to value its security, it will be
entitled to place such valuation as it may in its reasonable discretion
see fit, and the filing of such claim and the valuation of its security
shall in no way prejudice or restrict its rights against the Guarantor.
9. NO BENEFIT OF DISCUSSION OR DIVISION: When the Agent or any Lender is
pursuing its rights and remedies against the Guarantor under this
Guarantee or any other Operative Document to which the Guarantor is a
party, the Agent and any Lender may, but shall be under no obligation
to, pursue such rights and remedies as they may have against the
Borrowers, other guarantors or any other Person or against any
collateral security or guarantee they may hold before being entitled to
payment from the Guarantor of all and every of the debts and
liabilities hereby guaranteed and any refusal, negligence or failure by
the Agent or any Lender to pursue such other rights or remedies or to
collect any payments from a Borrower or any such other Person or to
realize upon any such collateral security or guarantee or to exercise
any right of set-off or compensation, or any release of a Borrower or
any such other Person or of any such collateral security, guarantee or
right of set-off or compensation, shall not relieve the Guarantor of
any liability under this Guarantee, and shall not impair or affect the
rights and remedies, whether express, implied or available as a matter
of law, of the Agent or any Lender against the Guarantor; the Guarantor
hereby waives all benefits of discussion and division.
10. GUARANTEE IS IN ADDITION TO OTHER GUARANTEES: The Guarantee of the
Guarantor is in addition to and not in substitution for any other
guarantee, by whomsoever given, at any time held by the Agent or any of
the Lenders and for any present and future obligation to the Agent or
to the Lenders or any of them incurred or arising otherwise than under
a guarantee, and is without prejudice to any other guarantees or
security by whomsoever given or held at any time by the Agent or the
Lenders or any of them.
11. PAYMENT ON DEMAND: The Guarantor shall make payment to the Agent of the
amount of its liability hereunder forthwith after demand therefor is
made in writing; the liability of the Guarantor shall bear interest
from the date of such demand at the applicable rates set forth in
Sections 4.7 and 12.1 of the Credit Agreement. The Guarantor agrees
that whenever, at any time, or from time to time, it shall make any
payment to the Agent or any Lender on account of the Obligations, it
will notify the Agent in writing that such payment is made for such
purpose under this Guarantee. The Guarantor hereby agrees that any
payments in respect of the Obligations pursuant to this Guarantee will
be paid to the Agent without set-off, compensation or counterclaim in
the same currency in which the Obligations are denominated. If the
Agent receives any payment from or for the account of the Guarantor in
F-14
any currency other than the currency in which the Obligations are
denominated, that payment shall constitute satisfaction of the
Obligations only to the extent of the amount of such currency that the
Agent, in accordance with its normal procedures, could purchase with
the amount of the other currency received by it from the Guarantor on
the first business day after the day of receipt.
12. SUBORDINATION AND POSTPONEMENT: All rights that the Guarantor may at
any time have against any Borrower, any other Credit Party or any
collateral for or in respect of the Obligations (including rights of
subrogation, exoneration, reimbursement and contribution and whether
arising under Applicable Law or otherwise), and all obligations that
any Borrower or any other Credit Party may at any time have to the
Guarantor (including, without limitation, all intercompany receivables
of the Guarantor from any Borrower or any other Credit Party), are
hereby expressly subordinated and postponed to the prior payment,
observance and performance in full of the Obligations, PROVIDED that
unless an Event of Default shall have occurred and be continuing or
unless the Agent gives notice to the Guarantor of the occurrence of a
Default, the Guarantor may retain any amount paid to it or recovered by
it on account of any right or obligation subordinated and postponed
pursuant to this Section and may enforce any of its rights and attempt
to obtain payment or performance of any of the obligations owed to it
which are subordinated and postponed pursuant to this Section.
13. SOLIDARY CODEBTOR: the Guarantor hereby binds itself with the Borrowers
as solidary codebtor for the repayment of the debts and liabilities
hereby guaranteed and this Guarantee shall be binding upon the
Guarantor and also upon the assigns and successors of the Guarantor and
will extend to and enure to the benefit of the successors and assigns
of the Agent and the Lenders and their respective assigns. The
Obligations of the Guarantor under this Guarantee are independent of
the obligations of the Borrowers and each of the other guarantors under
the Credit Agreement, and a separate action or actions may be brought
and prosecuted against the Guarantor separately or against the
Guarantor and any one or more of such other guarantors solidarily, or
against some separately and some solidarily, whether or not the
Borrowers be joined in any such action or actions. The Guarantor
waives, to the full extent permitted by law, the benefit of any
prescription (as such term is used in the CIVIL CODE OF QUEBEC) or
statute of limitations affecting its liability hereunder or the
enforcement thereof.
14. AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS: The Guarantor shall
remain obligated under this Guarantee notwithstanding that, without any
reservation of rights against the Guarantor and without notice to or
further assent by the Guarantor, any demand for payment of or reduction
in the principal amount of any of the Obligations made by the Agent or
any Lender may be rescinded by the Agent or such Lender, any of the
Obligations may be continued, the Obligations, or the liability of any
other party upon or for any part thereof, or any collateral security or
guarantee therefor or right of set-off or compensation with respect
thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, increased, modified, accelerated, compromised,
waived, surrendered or released by the Agent or any Lender, this
Guarantee or any of the other Operative Documents may be amended,
modified, supplemented or terminated, in whole or in part, as the Agent
F-15
or the Lenders may deem advisable from time to time, or any Lien,
collateral security, guarantee or right of set-off or compensation at
any time held by the Agent or any Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released.
Neither the Agent nor any Lender shall have any obligation to notify
the Guarantor in that regard and the Guarantee shall remain in force
and binding upon the Guarantor even if the Guarantor is not notified of
any of the foregoing.
15. TAXES: The Guarantor agrees to indemnify and hold the Agent and the
Lenders harmless for any Taxes which at any time may be assessed or is
otherwise required to be withheld or deducted from or is otherwise
payable by the Guarantor or the Borrower in connection with any payment
to the Agent under this Guarantee. The Guarantor shall make all
payments to the Lenders and the Agent pursuant to this Guarantee and
the other Operative Documents to which the Guarantor is a party without
set-off, compensation or counterclaim, free and clear of, and exempt
from, and without deduction for or on account of, any Tax.
Furthermore, the parties agree that Section 8.5 of the Credit Agreement
entitled "Manner of Payment and Taxes" is incorporated herein by
reference and applies MUTATIS MUTANDIS.
16. NOTICES: All notices provided for hereunder shall be given in
accordance with the provisions of the Credit Agreement as if the
Guarantor were a party thereto. The address and telecopier number of
the Guarantor are as set out hereafter:
INDUSTRIES CASCADES INC.
00 Xxxxx-Xxxxxxxx Xxxx.
Xxxxxxx, Xxxxxx
X0X 0X0
Attention of: The Corporate Controller
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Papers Ltd.
000 Xxxxxxxxxx Xx. Xxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: The Legal Counsel
Fax: (000) 000-0000
17. NO WAIVER, CUMULATIVE REMEDIES: No failure to exercise and no delay in
exercising, on the part of the Agent or the Lenders, any right, remedy,
power or privilege hereunder or under the other Operative Documents,
shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder or under
the other Operative Documents preclude any other or further exercise
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thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein and under the other
Operative Documents are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
18. ENTIRE AGREEMENT: This Guarantee, together with the Credit Agreement
and the other Operative Documents, constitutes the entire agreement
between the parties with respect to the subject matter hereof and
supersedes all prior negotiations, undertakings, representations and
understandings in respect thereof.
19. GOVERNING LAW: This Guarantee shall be construed in accordance with the
laws of the Province of Quebec and federal laws of Canada applicable
therein.
20. JUDGMENT CURRENCY: If for the purpose of obtaining judgment in any
court in any jurisdiction with respect to this Guarantee, it becomes
necessary to convert into the currency of such jurisdiction (herein
called the "JUDGMENT CURRENCY") any amount due under this Guarantee in
any currency other than the Judgment Currency, then conversion shall be
made at the rate of exchange prevailing on the business day preceding
(A) the date of actual payment of the amount due, in the case of
proceedings in the courts of any jurisdiction that will give effect to
such conversion being made on such day, or (B) the day on which the
judgment is given, in the case of proceedings in the courts of the
Province of Quebec or of any other jurisdiction (the applicable date as
of which such conversion is made pursuant to this Section being
hereinafter called the "JUDGMENT CONVERSION DATE"). For this purpose,
"RATE OF EXCHANGE" means the rate at which the Agent would be prepared
on the relevant date, to sell the currency of the amount due hereunder
in Xxxxxxxx xx Xxxxxxx, Xxxxxx against the Judgment Currency. In the
event that there is a change in the rate of exchange prevailing between
the Judgment Conversion Date and the date of payment of the amount due,
the Guarantor will, on the date of payment, pay such additional amounts
(if any) as may be necessary to ensure that the amount paid on such
date is the amount in the Judgment Currency which, when converted at
the rate of exchange prevailing on the date of payment, is the amount
then due under this Guarantee in US Dollars or Canadian Dollars, as the
case may be. Any additional amount due under this Section will be due
as a separate debt and shall not be affected by judgment being obtained
for any other sums due under or in respect of this Guarantee.
21. INVALIDITY: To the full extent permitted by applicable law, any
provision of this Guarantee which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability, without invalidating
the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
22. SUCCESSORS AND ASSIGNS: This Guarantee enures to the benefit of the
Agent and each Lender, and their respective successors and assigns and
is binding upon the Guarantor and its successors.
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23. COUNTERPARTS: This Guarantee may be executed in any number of
counterparts, each of which when executed and delivered is an original
but all of which taken together constitute one and the same instrument;
any party may execute this Guarantee by signing any counterpart of it
and may communicate such signing by telecopier or otherwise.
24. LANGUAGE: The parties confirm that they have requested that this
Guarantee and all documents and notices contemplated thereby be drawn
up in the English Language. Les parties confirment avoir requis que
cette garantie et tous les documents et avis qui y sont envisages
soient rediges en langue anglaise.
25. CREDIT AGREEMENT: The Guarantor acknowledgeS that it has received and
read a copy of the Credit Agreement and the other Operative Documents
and is familiar with their terms and by executing this Guarantee the
Guarantor agrees to be bound by all representations and warranties,
covenants, obligations, acknowledgements and other terms and provisions
applicable to a "Credit Party" under the Credit Agreement to the same
extent and in the same manner as if the Guarantor were a direct party
thereto and the Guarantor agrees to perform all obligations required of
a "Credit Party" thereunder.
GIVEN AT _________, as of _________, _________
INDUSTRIES CASCADES INC.
Per:
-----------------------------
Name: Xxxxxxx Xxxxxxxx
Title:President
Per:
-----------------------------
Name: Xxxxxxx Xxxxxx
Title:Treasurer
ACCEPTED AT _________, as of _________, _________
ROYAL BANK OF CANADA, ACTING
FOR ITSELF AND AS AGENT
Per:
------------------------------------------
Name:
Title:
F-18
US SUBSIDIARY GUARANTY
THIS UNCONDITIONAL GUARANTY AGREEMENT (as amended, restated,
supplemented or otherwise modified, this "GUARANTY"), dated as of July 23, 1998
is made by CASCADES INDUSTRIES, INC., a North Carolina corporation, ("CII" or
the "GUARANTOR"), in favor of ROYAL BANK OF CANADA, a Canadian chartered bank ,
as Arranger and Agent (the "AGENT") for the ratable benefit of itself and the
financial institutions (the "LENDERS") who are, or may become party to the
Credit Agreement referred to below.
STATEMENT OF PURPOSE
Pursuant to the terms of the Credit Agreement of even date herewith (as
amended, restated, supplemented or otherwise modified, the "CREDIT AGREEMENT"),
by and among Xxxxxxx Papers, Ltd., a corporation organized under the laws of
Canada ("XXXXXXX") and Industries Cascades Inc., a corporation organized under
the laws of the Province of Quebec, CII and any other Restricted Subsidiaries
from time to time party thereto, as Borrowers, the Lenders, and the Agent, the
Lenders will provide certain credit facilities to the Borrowers as more
specifically described in the Credit Agreement.
The Guarantor and the other Borrowers comprise one integrated financial
enterprise, and all extensions of credit to the other Borrowers will inure,
directly or indirectly, to the benefit of the Guarantor.
In connection with the transactions contemplated by the Credit
Agreement and as a condition precedent thereto, the Lenders have requested that
the Guarantor execute and deliver this Guaranty, and the Guarantor has agreed to
do so pursuant to the terms hereof.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, and to induce the Agent and the Lenders to enter
into and to make available extensions of credit pursuant to the Credit
Agreement, the Guarantor hereby agrees with the Agent for the ratable benefit of
the Agent and Lenders as follows:
SECTION 1. DEFINITIONS. Capitalized terms used and not otherwise
defined in this Guaranty including the preambles and recitals hereof shall have
the meanings ascribed to them in the Credit Agreement. In the event of a
conflict between capitalized terms defined herein and in the Credit Agreement,
the Credit Agreement shall control.
SECTION 2. GUARANTY OF OBLIGATIONS OF OTHER BORROWERS. The Guarantor
hereby unconditionally guarantees to the Agent for the ratable benefit of itself
and the Lenders, and their respective permitted successors, endorsees,
transferees and assigns, the prompt payment and performance of all obligations
of the Borrowers (other than CII) under the Credit Agreement and the other
Operative Documents (collectively, the "OBLIGATIONS"), whether primary or
secondary (whether by way of endorsement or otherwise), whether now existing or
hereafter arising, whether or not from time to time reduced or extinguished
(except by payment thereof) or hereafter increased or incurred, whether
enforceable or unenforceable as against such Borrowers, whether or not
F-19
discharged, stayed or otherwise affected by any bankruptcy, insolvency or other
similar law or proceeding, whether created directly with the Agent or any Lender
or acquired by the Agent or any Lender through assignment or endorsement,
whether matured or unmatured, whether joint or several, as and when the same
become due and payable (whether at maturity or earlier, by reason of
acceleration, mandatory repayment or otherwise), in accordance with the terms of
any such instruments evidencing any such obligations, including all renewals,
extensions or modifications thereof (all Obligations of such Borrowers to the
Agent or any Lender, including all of the foregoing, being hereinafter
collectively referred to as the "GUARANTEED OBLIGATIONS"); PROVIDED, that
notwithstanding anything to the contrary contained herein, it is the intention
of the Guarantor and the Lenders that, to the extent permitted by applicable
law, in any proceeding involving the bankruptcy, reorganization, arrangement,
adjustment of debts, relief of debtors, dissolution or insolvency or any similar
proceeding with respect to the Guarantor or its assets, the amount of the
Guarantor's obligations with respect to the Guaranteed Obligations shall be in,
but not in excess of, the maximum amount thereof not subject to avoidance or
recovery by operation of applicable law governing bankruptcy, reorganization,
arrangement, adjustment of debts, relief of debtors, dissolution, insolvency,
fraudulent transfers or conveyances or other similar laws (including, without
limitation, 11 U.S.C. ss.547, ss.548, ss.550 and other "avoidance" provisions of
Title 11 of the United States Code) applicable in any such proceeding to the
Guarantor and this Guaranty (collectively, "APPLICABLE INSOLVENCY LAWS"). To
that end and to the extent permitted by applicable law, in the event and to the
extent that the Guarantor's obligations with respect to the Guaranteed
Obligations or any payment made pursuant to the Guaranteed Obligations would,
but for the operation of the foregoing proviso, be subject to avoidance or
recovery in any such proceeding under Applicable Insolvency Laws, the amount of
the Guarantor's obligations with respect to the Guaranteed Obligations shall be
limited to the largest amount which, after giving effect thereto, would not,
under Applicable Insolvency Laws, render the Guarantor's obligations with
respect to such Guaranteed Obligations unenforceable or avoidable or otherwise
subject to recovery under Applicable Insolvency Laws. To the extent any payment
actually made pursuant to the Guaranteed Obligations exceeds the limitation of
the foregoing proviso and is otherwise subject to avoidance and recovery in any
such proceeding under Applicable Insolvency Laws, the amount subject to
avoidance shall, to the extent permitted by applicable law, be limited to the
amount by which such actual payment exceeds such limitation and the Guaranteed
Obligations as limited by the foregoing proviso shall in all events remain in
full force and effect and be fully enforceable against the Guarantor. The
foregoing proviso is intended solely to preserve the rights of the Agent
hereunder against the Guarantor in such proceeding to the maximum extent
permitted by Applicable Insolvency Laws.
SECTION 3. NATURE OF GUARANTY. The Guarantor agrees that this Guaranty
is a continuing, unconditional guaranty of payment and performance and not of
collection, and that its obligations under this Guaranty shall be primary,
absolute and unconditional, irrespective of, and unaffected by:
(a) the genuineness, validity, regularity, enforceability or
any future amendment of, or change in, the Credit Agreement or any
other Operative Document or any other agreement, document or instrument
to which any Borrower or Restricted Subsidiary thereof is or may become
a party;
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(b) the absence of any action to enforce this Guaranty, the
Credit Agreement or any other Operative Document or the waiver or
consent by the Agent or any Lender with respect to any of the
provisions of this Guaranty, the Credit Agreement or any other
Operative Document;
(c) the existence, value or condition of, or failure to
perfect its Lien against, any security for or other guaranty of the
Guaranteed Obligations or any action, or the absence of any action, by
the Agent or any Lender in respect of such security or guaranty
(including, without limitation, the release of any such security or
guaranty); or
(d) any other action or circumstances which might
otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor;
it being agreed by the Guarantor that, subject to the proviso in SECTION 2
hereof, its obligations under this Guaranty shall not be discharged until the
final indefeasible payment and performance, in full, of the Guaranteed
Obligations and the termination of the Commitments. To the extent permitted by
law, the Guarantor expressly waives all rights it may now or in the future have
under any statute (including without limitation North Carolina General Statutes
Section 26-7, ET SEQ. or similar law), or at law or in equity, or otherwise, to
compel the Agent or any Lender to proceed in respect of the Guaranteed
Obligations against the other Borrowers or any other party or against any
security for or other guaranty of the payment and performance of the Guaranteed
Obligations before proceeding against, or as a condition to proceeding against,
the Guarantor. To the extent permitted by law, the Guarantor further expressly
waives and agrees not to assert or take advantage of any defense based upon the
failure of the Agent or any Lender to commence an action in respect of the
Guaranteed Obligations against the other Borrowers, the Guarantor, any other
guarantor or any other party or any security for the payment and performance of
the Guaranteed Obligations. The Guarantor agrees that any notice or directive
given at any time to the Agent or any Lender which is inconsistent with the
waivers in the preceding two sentences shall be null and void and may be ignored
by the Agent or such Lender, and, in addition, may not be pleaded or introduced
as evidence in any litigation relating to this Guaranty for the reason that such
pleading or introduction would be at variance with the written terms of this
Guaranty, unless the Agent and the Lenders have specifically agreed otherwise in
writing. The foregoing waivers are of the essence of the transaction
contemplated by the Operative Documents and, but for this Guaranty and such
waivers, the Agent and Lenders would decline to enter into the Credit Agreement.
SECTION 4. DEMAND BY THE AGENT. In addition to the terms set forth in
SECTION 3, and in no manner imposing any limitation on such terms, if all or any
portion of the then outstanding Guaranteed Obligations under the Credit
Agreement are declared to be immediately due and payable in accordance
therewith, then the Guarantor shall, upon demand in writing therefor by the
Agent to the Guarantor, pay all or such portion of the outstanding Guaranteed
Obligations then declared due and payable. Payment by the Guarantor shall be
made to the Agent, to be credited and applied upon the Guaranteed Obligations,
in immediately available funds in the same currency in which the Obligations are
F-21
denominated, to the Agent's Account for Payments or at such other account or
address that may be specified in writing from time to time by the Agent.
SECTION 5. WAIVERS. In addition to the waivers contained in SECTION 3,
the Guarantor, to the extent permitted by law, waives and agrees that it shall
not at any time insist upon, plead or in any manner whatever claim or take the
benefit or advantage of, any appraisal, valuation, stay, extension, marshalling
of assets or redemption laws, or exemption, whether now or at any time hereafter
in force, which may delay, prevent or otherwise affect the performance by the
Guarantor of its obligations under, or the enforcement by the Agent or the
Lenders of, this Guaranty. The Guarantor further hereby waives, to the extent
permitted by Applicable Laws, diligence, presentment, demand, protest and notice
(except as specifically required herein) of whatever kind or nature with respect
to any of the Guaranteed Obligations and waives, to the extent permitted by
Applicable Laws, the benefit of all provisions of law which are or might be in
conflict with the terms of this Guaranty. The Guarantor represents, warrants and
agrees that its obligations under this Guaranty are not and shall not be subject
to any counterclaims, offsets or defenses of any kind against the Agent, the
Lenders or the other Borrowers whether now existing or which may arise in the
future.
SECTION 6. BENEFITS OF GUARANTY. The provisions of this Guaranty are
for the benefit of the Agent and the Lenders and their respective permitted
successors, transferees, endorsees and assigns, and nothing herein contained
shall impair, as between the Borrowers, the Agent and the Lenders, the
obligations of the Borrowers under the Loan Documents. In the event all or any
part of the Guaranteed Obligations are transferred, endorsed or assigned by the
Agent or any Lender to any Person or Persons as permitted under the Credit
Agreement, any reference to an "Agent", or "Lender" herein shall be deemed to
refer equally to such Person or Persons.
SECTION 7. MODIFICATION OF OPERATIVE DOCUMENTS ETC. If the Agent or the
Lenders shall at any time or from time to time, with or without the consent of,
or notice to, the Guarantor:
(a) change or extend the manner, place or terms of payment of,
or renew or alter all or any portion of, the Guaranteed Obligations;
(b) take any action under or in respect of the Operative
Documents in the exercise of any remedy, power or privilege contained
therein or available to it at law, in equity or otherwise, or waive or
refrain from exercising any such remedies, powers or privileges;
(c) amend or modify, in any manner whatsoever, the Operative
Documents including, without limitation, amendments or modifications to
increase the amount of the Credit Facilities or any of the Credit
Facilities ;
(d) extend or waive the time for performance by the Guarantor,
any other guarantor, the Borrowers or any other Person of, or
compliance with, any term, covenant or agreement on its part to be
F-22
performed or observed under an Operative Document, or waive such
performance or compliance or consent to a failure of, or departure
from, such performance or compliance;
(e) take and hold security or collateral for the payment of
the Guaranteed Obligations or sell, exchange, release, dispose of, or
otherwise deal with, any property pledged, mortgaged or conveyed, or in
which the Agent or the Lenders have been granted a Lien, to secure any
Indebtedness of the Guarantor, any other guarantor or the other
Borrowers to the Agent or the Lenders;
(f) release anyone who may be liable in any manner for the
payment of any amounts owed by the Guarantor, any other guarantor
or the other Borrowers to the Agent or any Lender;
(g) modify or terminate the terms of any intercreditor or
subordination agreement pursuant to which claims of other creditors of
the Guarantor, any other guarantor or the other Borrowers are
subordinated to the claims of the Agent or any Lender; or
(h) apply any sums by whomever paid or however realized to any
Guaranteed Obligations owing by the Guarantor, any other guarantor or
the other Borrowers to the Agent or any Lender in such manner as the
Agent or any Lender shall determine in its reasonable discretion;
then neither the Agent nor any Lender shall incur any liability to the Guarantor
as a result thereof, and no such action shall impair or release the obligations
of the Guarantor under this Guaranty.
SECTION 8. REINSTATEMENT. The Guarantor agrees that, if any payment
made by the other Borrowers or any other Person applied to the Obligations is at
any time annulled, set aside, rescinded, invalidated, declared to be fraudulent
or preferential or otherwise required to be refunded or repaid or the proceeds
of any collateral are required to be refunded by the Agent or any Lender to the
other Borrowers, its estate, trustee, receiver or any other party, including,
without limitation, the Guarantor, under any Applicable Law or equitable cause,
then, to the extent of such payment or repayment, the Guarantor's liability
hereunder (and any Lien securing such liability) shall be and remain in full
force and effect, as fully as if such payment had never been made, and, if prior
thereto, this Guaranty shall have been cancelled or surrendered (and if any Lien
or collateral securing the Guarantor's liability hereunder shall have been
released or terminated by virtue of such cancellation or surrender), this
Guaranty (and such Lien) shall be reinstated in full force and effect, and such
prior cancellation or surrender shall not diminish, release, discharge, impair
or otherwise affect the obligations of the Guarantor in respect of the amount of
such payment (or any Lien securing such obligation).
SECTION 9. REPRESENTATIONS AND WARRANTIES. To induce the Lenders to
make any Loans, the Guarantor hereby confirms that the representations and
warranties set forth in the Credit Agreement, inasmuch as applicable to the
Guarantor, are hereby made as if incorporated by reference herein and are
further confirmed to be true and correct, and in addition, the Guarantor further
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represents and warrants that as of the date hereof, the Guarantor (I) has
capital sufficient to carry on its business and transactions and all business
and transactions in which it engages and is able to pay its debts as they
mature, and (II) owns property having a value, both at fair valuation and at
present fair saleable value, greater than the amount required to pay its
probable liabilities (including contingencies).
SECTION 10. REMEDIES. Upon the occurrence and during the continuance of
any Event of Default, with the consent of the Majority Lenders, the Agent may,
or upon the request of the Majority Lenders, the Agent shall, enforce against
the Guarantor their respective obligations and liabilities hereunder and
exercise such other rights and remedies as may be available to the Agent
hereunder, under the Operative Documents or otherwise.
SECTION 11. NO SUBROGATION. Notwithstanding any payment or payments by
the Guarantor hereunder, or any set-off or application of funds of the Guarantor
by the Agent r any Lender, or the receipt of any amounts by the Agent or any
Lender with respect to any of the Guaranteed Obligations, the Guarantor shall
not be entitled to be subrogated to any of the rights of the Agent or any Lender
against the other Borrowers or any other guarantor or against any collateral
security held by the Agent or any Lender for the payment of the Guaranteed
Obligations nor shall the Guarantor seek any reimbursement from the other
Borrowers or any other guarantor in respect of payments made by the Guarantor in
connection with the Guaranteed Obligations, until all amounts owing to the Agent
and the Lenders on account of the Guaranteed Obligations are paid in full and
the Commitments are terminated. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all of the Guaranteed
Obligations shall not have been paid in full, such amount shall be held by the
Guarantor in trust for the Agent, segregated from other funds of the Guarantor,
and shall, forthwith upon receipt by the Guarantor, be turned over to the Agent
in the exact form received by the Guarantor (duly endorsed by the Guarantor to
the Agent, if required) to be applied against the Guaranteed Obligations,
whether matured or unmatured, in such order as set forth in the Credit
Agreement.
SECTION 12. SUBORDINATION AND POSTPONEMENT: All rights that the
Guarantor may at any time have against any other Borrower, any other Credit
Party or any collateral for or in respect of the Obligations (including rights
of subrogation, exoneration, reimbursement and contribution and whether arising
under Applicable Law or otherwise), and all obligations that any other Borrower
or any other Credit Party may at any time have to the Guarantor (including,
without limitation, all intercompany receivables of the Guarantor from any other
Borrower or any other Credit Party), are hereby expressly subordinated and
postponed to the prior payment, observance and performance in full of the
Obligations, PROVIDED that unless an Event of Default shall have occurred and be
continuing or unless the Agent gives notice to the Guarantor of the occurrence
of a Default, the Guarantor may retain any amount paid to it or recovered by it
on account of any right or obligation subordinated and postponed pursuant to
this Section and may enforce any of its rights and attempt to obtain payment or
performance of any of the obligations owed to it which are subordinated and
postponed pursuant to this Section.
SECTION 13. TAXES: The Guarantor agrees to indemnify and hold the Agent
and the Lenders harmless for any Taxes which at any time may be assessed or is
F-24
otherwise required to be withheld or deducted from or is otherwise payable by
the Guarantor or the Borrower in connection with any payment to the Agent under
this Guaranty. The Guarantor shall make all payments to the Lenders and the
Agent pursuant to this Guaranty and the other Operative Documents to which the
Guarantor is a party without set-off, compensation or counterclaim, free and
clear of, and exempt from, and without deduction for or on account of, any Tax.
Furthermore, the parties agree that Section 8.5 of the Credit Agreement entitled
"Manner of Payment and Taxes" is incorporated herein by reference and applies
MUTATIS MUTANDIS.
SECTION 14. EXPENSES. All costs and expenses (including reasonable
attorneys' fees, legal expenses and court costs) incurred by the Agent or any
Lender in enforcing or protecting their rights or remedies hereunder shall be
payable by the Guarantor on demand and shall bear interest (after as well as
before judgment) until paid at the Applicable Rate then applicable to Base Rate
Loans under the Credit Agreement and shall be additional Guaranteed Obligations
hereunder.
SECTION 15. NOTICES. All notices and communications hereunder shall be
given to the addresses and otherwise made in accordance with Article XXII of the
Credit Agreement, and in the case of notices to the Guarantor, WITH A COPY TO:
Xxxxxxx Papers Ltd.
000 Xxxxxxxxxx Xx. Xxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: The Legal Counsel
Telecopieur: (000) 000-0000
SECTION 16. SUCCESSORS AND ASSIGNS. This Agreement is for the benefit
of the Agent and the Lenders and their permitted successors and assigns, and in
the event of an assignment of all or any of the Obligations, the rights
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Agreement shall be binding on the
Guarantor and its successors and assigns; PROVIDED THAT the Guarantor may not
assign any of its rights or obligations hereunder without the prior written
consent of the Agent and the Lenders.
SECTION 17. AMENDMENTS, WAIVERS AND CONSENTS. No term, covenant,
agreement or condition of this Agreement may be amended or waived, nor may any
consent be given, except in the manner set forth in Section 17.12.1 of the
Credit Agreement.
SECTION 18. POWERS COUPLED WITH AN INTEREST. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
SECTION 19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
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CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES
THEREOF.
SECTION 20. CONSENT TO JURISDICTION. The Guarantor hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located in
Mecklenburg County, North Carolina, in any action, claim or other proceeding
arising out of or any dispute in connection with this Agreement, any rights or
obligations hereunder, or the performance of such rights and obligations. The
Guarantor hereby irrevocably consents to the service of a summons and complaint
and other process in any action, claim or proceeding brought by the Agent or any
Lender in connection with this Agreement, any rights or obligations hereunder,
or the performance of such rights and obligations, on behalf of itself or its
property, in the manner provided in Article XXII of the Credit Agreement.
Nothing in this SECTION 20 shall affect the right of the Agent or any Lender to
serve legal process in any other manner permitted by Applicable Law or affect
the right of the Agent or such Lender to bring any action or proceeding against
the Guarantor or its properties in the courts of any other jurisdictions.
SECTION 21. BINDING ARBITRATION; WAIVER OF JURY TRIAL.
(I) Upon demand of any party, whether made before or after
institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to the Credit
Agreement or any other Operative Document ("DISPUTES"), between or
among parties to the Credit Agreement or any other Operative Document
shall be resolved by binding arbitration conducted under and governed
by the Commercial Financial Disputes Arbitration Rules (the
"ARBITRATION RULES") of the American Arbitration Association (the
"AAA") and the Federal Arbitration Act. Disputes may include, without
limitation, tort claims, counterclaims, disputes as to whether a matter
is subject to arbitration, claims brought as class actions, or claims
arising from documents executed in the future. A judgment upon the
award may be entered in any court having jurisdiction. Notwithstanding
the foregoing, this arbitration provision does not apply to disputes
under or related to swap agreements.
All arbitration hearings shall be conducted, at the discretion
of the Agent, either in New York, New York or in Charlotte, North
Carolina. A hearing shall begin within ninety (90) days of the demand
for arbitration and all hearings shall be concluded within one hundred
twenty (120) days of demand for arbitration. These time limitations may
not be extended unless a party shows cause for extension and then for
no more than a total of sixty (60) days. The expedited procedures set
forth in Rule 51, ET SEQ. of the Arbitration Rules shall be applicable
to claims of less than $1,000,000. Arbitrators shall be licensed
attorneys selected from the Commercial Financial Dispute Arbitration
Panel of the AAA. The parties do not waive Federal or state substantive
law except and provided herein.
Notwithstanding the preceding binding arbitration provisions,
the parties agree to preserve, without diminution, certain remedies
that any party may exercise before or after any arbitration proceeding
is brought. The parties shall have the right to proceed in any court of
proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable: (I) all rights to foreclose against
F-26
any real or personal property or other security by exercising a power
of sale under applicable law by judicial foreclosure including a
proceeding to confirm the sale; (II) all rights of self-help including
peaceful occupation of real property and collection of rents, set-off,
and peaceful possession of personal property; (III) obtaining
provisions/or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and
filing an involuntary bankruptcy proceeding; and (IV) when applicable,
a judgment by confession of judgment. Any claim or controversy with
regard to any party's entitlement to such remedies is a dispute.
Each party agrees that it shall not have a remedy of punitive
exemplary damages against the other in any Dispute and hereby waives
any right or claim to punitive or exemplary damages they have now or
which may arise in the future in connection with any Dispute, whether
the Dispute is resolved by arbitration or judicially. The parties
acknowledge that by agreeing to binding arbitration they have
irrevocably waived any right they may have to a jury trial with regard
to a Dispute.
(J) WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY LAW, THE
AGENT, EACH LENDER, AND THE GUARANTOR, BY ITS ACCEPTANCE OF THIS
AGREEMENT OR THE BENEFITS HEREOF, HEREBY IRREVOCABLY WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR
OTHER PROCEEDING ARISING OUT OF OR ANY DISPUTE IN CONNECTION WITH THIS
AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER, OR THE PERFORMANCE OF
SUCH RIGHTS AND OBLIGATIONS.
(K) PRESERVATION OF CERTAIN REMEDIES. Notwithstanding the
preceding binding arbitration provisions, the parties hereto and the
other Operative Documents preserve, without diminution, certain
remedies that such Person may employ or exercise freely, either alone,
in conjunction with or during a Dispute. Each such Person shall have
and hereby reserves the right to proceed in any court of proper
jurisdiction or by self help to exercise or prosecute the following
remedies: (I) all rights to foreclose against any real or personal
property or other security by exercising a power of sale granted in the
Operative Documents or under applicable law or by judicial foreclosure
and sale, (II) all rights of self help including peaceful occupation of
property and collection of rents, set off, and peaceful possession of
property, (III) obtaining provisional or ancillary remedies including
injunctive relief, sequestration, garnishment, attachment, appointment
of receiver and in filing an involuntary bankruptcy proceeding, and
(IV) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an
arbitrator to grant similar remedies that may be requested by a party
in a Dispute.
SECTION 22. JUDGMENT CURRENCY: If for the purpose of obtaining a
judgment or an award in any court or arbitration tribunal in any jurisdiction
with respect to this Guaranty, it becomes necessary to convert into the
currency of such jurisdiction (herein called the "JUDGMENT CURRENCY") any
amount due under this Guaranty in any currency other than the Judgment
Currency, then conversion shall be made at the rate of exchange prevailing on
the business day preceding (A) the date of actual payment of the amount due,
F-27
in the case of proceedings in the courts or arbitration tribunal of any
jurisdiction that will give effect to such conversion being made on such day,
or (B) the day on which the judgment or award is given, in the case of
proceedings in the courts of the Province of Quebec or of any other
jurisdiction (the applicable date as of which such conversion is made pursuant
to this Section being hereinafter called the "JUDGMENT CONVERSION DATE"). For
this purpose, "RATE OF EXCHANGE" means the rate at which the Agent would be
prepared on the relevant date, to sell the currency of the amount due
hereunder in accordance with its normal practices against the Judgment
Currency. In the event that there is a change in the rate of exchange
prevailing between the Judgment Conversion Date and the date of payment of the
amount due, the Guarantor will, on the date of payment, pay such additional
amounts (if any) as may be necessary to ensure that the amount paid on such
date is the amount in the Judgment Currency which, when converted at the rate
of exchange prevailing on the date of payment, is the amount then due under
this Guaranty in US Dollars or Canadian Dollars, as the case may be. Any
additional amount due under this Section will be due as a separate debt and
shall not be affected by judgment being obtained for any other sums due under
or in respect of this Guaranty.
SECTION 23. SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(A) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Agent and the
Lenders in order to carry out the intentions of the parties hereto as nearly as
may be possible; and (B) the invalidity or unenforceability of any provisions
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
SECTION 24. HEADINGS. The various headings of this Agreement are
inserted for convenience only and shall not affect the meaning or interpretation
of this Agreement or any provisions hereof.
SECTION 25. COUNTERPARTS. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the Guarantor has executed and delivered this
Guaranty under seal as of the date first above written.
[CORPORATE SEAL] CASCADES INDUSTRIES, INC.
By:
-----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President
By:
-----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Treasurer
F-28
SCHEDULE "G" to the Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd. and Industries Cascades Inc. and Cascades Industries, Inc. and the
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
and the financial institutions named on the signature pages thereof, as Lenders,
with Royal Bank of Canada, as Arranger and as Agent
LIST OF CREDIT PARTIES AND SUBSIDIARIES
AND PLACES OF BUSINESS
(Sections 2.1.2 and 2.1.12)
XXXXXXX PAPERS LTD./LES PAPIERS XXXXXXX LTEE
Incorporated under the CANADA BUSINESS CORPORATIONS ACT
OUTSTANDING CAPITAL STOCK: Cascades Inc. holds 31,587,651 common
shares, representing 73.16% of the issued
and outstanding common shares
SUBSIDIARIES: Industries Cascades Inc.
Cascades Industries, Inc.
REGISTERED OFFICE: 00, xxxx. Xxxxx-Xxxxxxxx
Xxxxxxx, Xxxxxxxx xx Xxxxxx, Xxxxxx X0X 0X0
OTHER PLACES OF BUSINESS: Division Candiac
00, xxxx. Xxxxx-Xxxxxxxx
Xxxxxxx, Xxxxxxxx xx Xxxxxx, Xxxxxx X0X 0X0
Division Lachute
000, xxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxx xx Xxxxxx, Xxxxxx X0X 0X0
Division Laval
0000, Xxxxxxxxx xxx Xxxxxxxxxxx
Xxxxx, Xxxxxxxx xx Xxxxxx, Xxxxxx X0X 0X0
X-0
XXXXXXXXXX XXXXXXXX INC.
Incorporated under the COMPANIES ACT (Quebec)
OUTSTANDING CAPITAL STOCK: 3,014,000 common shares held by Xxxxxxx
7,000 Class "A" preferred shares held by Xxxxxxx
SUBSIDIARIES: None
HEAD OFFICE: 467, rue. Xxxxx-Xxxxxxxx
Xxxxxxx Xxxxx, Xxxxxxxx xx Xxxxxx, Xxxxxx X0X 0X0
OTHER PLACES OF BUSINESS: None
CASCADES INDUSTRIES, INC.
Incorporated under the laws of the State of North Carolina, U.S.A.
OUTSTANDING CAPITAL STOCK: 200,000 common shares held by Xxxxxxx
3,038,683 preferred shares held by Xxxxxxx
SUBSIDIARIES: None
REGISTERED OFFICE, EXECUTIVE
OFFICE AND PRINCIPAL PLACE 805 Midway Road
OF BUSINESS: Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000, X.X.X.
OTHER PLACES OF BUSINESS: None
G-2
SCHEDULE "H" to the Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd. and Industries Cascades Inc. and Cascades Industries, Inc. and the
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
and the financial institutions named on the signature pages thereof, as Lenders,
with Royal Bank of Canada, as Arranger and as Agent
ENVIRONMENTAL MATTERS
(Section 2.1.21)
THE PROPERTY OF XXXXXXX LOCATED AT LACHUTE
A spill of furnace oil occurred in the past at the Lachute property of Xxxxxxx,
while it was owned by Abitibi Price Inc. Since then, environmental
characterization and cleanup were performed.
On December 22, 1997, the MINISTERE DE L'ENVIRONNEMENT ET DE LA FAUNE DU QUEBEC
("MEF") sent a letter to Xxxxxxx requiring the finalization of the cleanup of
the Lachute soil contaminated by hydrocarbon, following the results of sampling
conducted in the fall of 1997. Under the purchase agreement of February 17, 1994
pursuant to which Xxxxxxx acquired the contaminated property from Abitibi Price
Inc. (now Abitibi-Consolidated Inc.), the latter has full responsibility for the
cleanup of the Lachute property and has agreed to indemnify Xxxxxxx in this
respect, including all costs and liability for this supplemental cleanup
required by the MEF pursuant to its certificate of approval of October 28, 1994.
H-1
SCHEDULE "I" to the Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd. and Industries Cascades Inc. and Cascades Industries, Inc. and the
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
and the financial institutions named on the signature pages thereof, as Lenders,
with Royal Bank of Canada, as Arranger and as Agent
COMPETITION AND ANTI-TRUST LAWS
CERTAIN PROCEEDINGS
(Section 2.1.23)
Cascades Industries, Inc. which operates in the United States of America, is a
defendant with numerous other manufacturers of tissue paper in a number of
American anti-trust civil actions in different States. The prosecutors argue
that the price of the tissue paper should have decreased during the period 1993
to 1995 due to a decline in the price of pulp. Because the prices of tissue
paper have increased during such period, the prosecutors have come to the
conclusion that there must have been some collusion amongst the manufacturers.
Cascades Industries, Inc. does not use pulp in the manufacturing of its tissue
paper; rather, it recycles used paper, and during that period, the price of the
used paper has increased. Furthermore, its production of tissue represents not
more than 0.25% of the total production of the industry.
Consequently, the management of Cascade Industries, Inc. believes that these
claims are groundless and that they will not have a Material Adverse Effect.
I-1
SCHEDULE "J" to the Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd. and Industries Cascades Inc. and Cascades Industries, Inc. and the
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
and the financial institutions named on the signature pages thereof, as Lenders,
with Royal Bank of Canada, as Arranger and as Agent
FORM OF DESIGNATION OF ADDITIONAL BORROWER
(Section 3.2.1)
Date:____________________
ROYAL BANK OF CANADA (as Agent)
000 Xxx Xxxxxx, Xxxxx Tower
Royal Bank Plaza
Toronto, Ontario
M5J 2J5
Attention: Senior Manager, Global Syndications, Canada
Fax: (000) 000-0000
Dear Sirs:
XXXXXXX PAPERS LTD.
DESIGNATION OF ADDITIONAL BORROWER
We refer to the credit agreement dated as of July 23, 1998, among
Xxxxxxx Papers Ltd., Industries Cascades Inc., Cascades Industries, Inc. and
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
Royal Bank of Canada, as Agent, and the Lenders referred to therein (the "CREDIT
AGREEMENT"). The words and expressions defined in the Credit Agreement have the
same respective meanings when used herein.
We hereby irrevocably notify you, in accordance with Section 3.2.1 of
the Credit Agreement, that we hereby designate the following Additional
Borrower, the particulars of which are as follows:
- name of Additional Borrower:
---------------------------------------------
- jurisdiction of incorporation:
-------------------------------------------
- head/registered office:
--------------------------------------------------
- principal place of business and operations:
------------------------------
- the said Additional Borrower will be a
----------------------------------
(Canadian Lender/US Lender)
J-1
- proposed effective date of designation of the Additional Borrower:
-------
-------------------------------------------------------------------------
We are also delivering to you herewith the Adopting Instrument of such
new Additional Borrower, together with the other documents required by Section
3.2.1 of the Credit Agreement.
We confirm that both before and after the designation of such
Additional Borrower, no Default or Event of Default has occurred and is
continuing under the Credit Agreement and all representations and warranties
made by us in the Credit Agreement are true and correct in all respects.
The undersigned also confirms that the guarantee of the undersigned set
forth in Section 9.1 of the Credit Agreement unconditionally applies to all
Borrowings and liabilities of the aforesaid Additional Borrower under the Credit
Agreement.
XXXXXXX PAPERS LTD.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
J-2
SCHEDULE "K" to the Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd. and Industries Cascades Inc. and Cascades Industries, Inc. and the
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
and the financial institutions named on the signature pages thereof, as Lenders,
with Royal Bank of Canada, as Arranger and as Agent
CONFIRMATION OF BORROWING
(ADVANCE, CONVERSION OR CONTINUATION)
(Section 3.7, 3.11, 5.1.2 or 7.2.5)
Date: _______________________
ROYAL BANK OF CANADA (as Agent)
[ADDRESS] 000 Xxx Xxxxxx, Xxxxx Tower
Royal Bank Plaza
Toronto, Ontario
M5J 2J5
Attention: Senior Manager, Global Syndications, Canada
Fax: (000) 000-0000
Dear Sirs:
XXXXXXX PAPERS LTD.
CONFIRMATION OF BORROWING
We refer to the credit agreement dated as of July 23, 1998, among
Xxxxxxx Papers Ltd., Industries Cascades Inc., Cascades Industries, Inc. and
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
Royal Bank of Canada, as Agent, and the Lenders referred to therein (the "CREDIT
AGREEMENT"). The words and expressions defined in the Credit Agreement have the
same respective meaning when used herein.
We hereby irrevocably confirm our telephone notice, in accordance with
Section [3.7/3.11/5.1.2/7.2.5] of the Credit Agreement, of the following
Borrowing:
1. THE MATURING BORROWING (IF APPLICABLE):
Form _____________________________________________________________
(Prime Rate Loan, US Base Rate Loan, Base Rate Loan,
Libor Loan, Borrowing by way of Bankers' Acceptances)
Currency/Amount ______________________________
Revolving Facility /Term Facility
------------------------
K-1
Libor Interest Period/Term of Bankers' Acceptances:1
------------------------
2. THE BUSINESS DAY OF THE PROPOSED BORROWING IS: ___/_____/____
Day/Month/Year
3. PROPOSED BORROWING(S):
Advance Conversion Continuation
|_| |_| |_|
Form _______________________________________________________
(Prime Rate Loan, US Base Rate Loan, Base Rate Loan,
Libor Loan, Borrowing by way of Bankers' Acceptances)
Currency/Amount _____________________________
Revolving Facility/Term Facility
---------------------------------
Libor Interest Period/Term of Bankers' Acceptances:2 _____________
4. REMIT FUNDS TO: __________________________________________________
------------------------------------------------------------------
We hereby confirm that: (A) the Borrowing requested hereby complies
with the requirements of Section 3.7, 3.11, 5.1.2 or 7.2.5 of the Credit
Agreement, as the case may be, (B) no Default or Event of Default has occurred
and is continuing under the Credit Agreement or would result from the making of
the Borrowing contemplated hereby and (C) all representations and warranties
made by us in the Credit Agreement are true and correct in all respects.
[NAME OF BORROWER]
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
1 In the case of conversion or continuation of Libor Loans or Borrowings
by way of Bankers' Acceptances, include the duration of and last day of
the applicable Libor Interest Period or term of such Bankers'
Acceptances to be converted or continued.
2 In the case of Libor Loans or Borrowings by way of Bankers'
Acceptances, include the duration of and last day of the applicab le
Libor Interest Period or term of such Bankers' Acceptances.
K-2
SCHEDULE "L" to the Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd. and Industries Cascades Inc. and Cascades Industries, Inc. and the
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
and the financial institutions named on the signature pages thereof, as Lenders,
with Royal Bank of Canada, as Arranger and as Agent
NOTICE OF BORROWING
BY WAY OF LETTER OF CREDIT
(Sections 3.7 and 6.2)
Date: _______________________
[NAME AND ADDRESS OF OVERDRAFT AND L/C LENDER]
Dear Sirs:
[NAME OF BORROWER]
NOTICE OF BORROWING
BY WAY OF LETTER OF CREDIT
We refer to the Credit Agreement dated as of 23, 1998 among Xxxxxxx
Papers Ltd., Industries Cascades Inc., Cascades Industries, Inc. and other
Restricted Subsidiaries parties thereto from time to time, as Borrowers, Royal
Bank of Canada, as Agent and the Lenders referred to therein (the "CREDIT
AGREEMENT"). The words and expressions defined in the Credit Agreement shall
have the same meaning when used herein as that assigned thereto in the Credit
Agreement.
We hereby confirm our arrangements for the issuance of a Letter of
Credit under the Credit Agreement and, pursuant to Section 3.7 of the Credit
Agreement, we hereby irrevocably notify you of the proposed issuance of the
following instrument under the Overdraft and L/C Facility:
1. Name of issuing Lender:
-----------------------------------------
(Royal/Comerica Bank)
2. Anticipated date of issuance: _____/_____/_____
Day Month Year
3. Type:
-----------------------------------------------------------
(letter of credit/letter of guarantee)
4. Amount and currency:
--------------------------------------------
5. Expiry Date:
----------------------------------------------------
L-1
6. Beneficiary:
----------------------------------------------------
7. Summary of terms and conditions:
--------------------------------
8. To be delivered as follows:
-------------------------------------
The undersigned declares that (A) no Default or Event of Default has
occurred and is continuing under the Credit Agreement or would result from the
making of the Borrowing contemplated hereby and (B) all representations and
warranties made by us in the Credit Agreement are true and correct in all
respects.
[NAME OF BORROWER]
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
L-2
SCHEDULE "M" to the Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd. and Industries Cascades Inc. and Cascades Industries, Inc. and the
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
and the financial institutions named on the signature pages thereof, as Lenders,
with Royal Bank of Canada, as Arranger and as Agent
NOTICE OF REPAYMENT OR PREPAYMENT
(Section 3.9)
Date: ________________________
ROYAL BANK OF CANADA (as Agent)
[ADDRESS] 000 Xxx Xxxxxx, Xxxxx Tower
Royal Bank Plaza
Toronto, Ontario
M5J 2J5
Attention: Senior Manager, Global Syndications, Canada
Fax: (000) 000-0000
Dear Sirs:
XXXXXXX PAPERS LTD.
NOTICE OF REPAYMENT, PREPAYMENT OR CANCELLATION
We refer to the credit agreement dated as of July 23, 1998, among
Xxxxxxx Papers Ltd., Industries Cascades Inc., Cascades Industries, Inc. and
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
Royal Bank of Canada, as Agent, and the Lenders referred to therein (the "CREDIT
AGREEMENT"). The words and expressions defined in the Credit Agreement have the
same respective meaning when used herein.
We hereby irrevocably confirm our telephone notice that, in accordance
with Section 3.9 of the Credit Agreement, we shall repay certain Borrowings or
make certain cancellations as follows:
1. DATE OF REPAYMENT: ___/_____/____
Day/Month/Year
(date must coincide with maturity of Libor Loans or Borrowings by way
of Bankers' Acceptances, to the extent applicable)
2. REPAYMENT OR CANCELLATION UNDER OPERATING/TERM FACILITY: _______________
________________________________________________________________________
M-1
3. AMOUNT OF REPAYMENT OR CANCELLATION:
(a) In respect of Prime Rate Loans: CDN$_____________
(b) In respect of US Base Rate Loans: US$_____________
(c) In respect of Base Rate Loans: US$_____________
(d) In respect of Libor Loans: US$_____________
(e) In respect of Borrowings by way of
Bankers' Acceptances: CDN$_____________
4. LAST DAY OF LIBOR INTEREST PERIOD OR TERM OF BANKERS' ACCEPTANCES:
(in the case of repayment of Libor Loans and Borrowings by way of
Bankers' Acceptances): ____/____/____,
Day/Month/Year
We hereby represent and warrant that the repayment made hereunder or
the cancellation requested hereby complies with the requirements of Section 3.9
of the Credit Agreement.
[NAME OF RELEVANT BORROWER]
By:
-------------------------------------------
Name:
Title:
By:
-------------------------------------------
Name:
Title:
[XXXXXXX MUST SIGN IN ALL CASES OF CANCELLATION]
XXXXXXX PAPERS LTD.
By:
-------------------------------------------
Name:
Title:
By:
-------------------------------------------
Name:
Title:
M-2
SCHEDULE "N" to the Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd. and Industries Cascades Inc. and Cascades Industries, Inc. and the
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
and the financial institutions named on the signature pages thereof, as Lenders,
with Royal Bank of Canada, as Arranger and as Agent
CERTIFICATE OF COMPLIANCE
(Sections 10.1.1.8 and 11.1.7(d))
Date:______________________
ROYAL BANK OF CANADA (as Agent)
[ADDRESS] 000 Xxx Xxxxxx, Xxxxx Tower
Royal Bank Plaza
Toronto, Ontario
M5J 2J5
Attention: Senior Manager, Global Syndications, Canada
Fax: (000) 000-0000
Dear Sirs:
CERTIFICATE OF COMPLIANCE
I, , the undersigned, in my capacity as
---------------------------------
[_____________________] of [___________________], do hereby certify that:
1. This certificate is delivered pursuant to Section [10.1.1.8 OR
11.1.7(D)] of a credit agreement dated as of July 23, 1998 among
Xxxxxxx Papers Ltd., Industries Cascades Inc., Cascades Industries,
Inc. and other Restricted Subsidiaries parties thereto from time to
time, as Borrowers, Royal Bank of Canada, as Agent, and the Lenders
referred to therein (the "CREDIT AGREEMENT"). The words and expressions
defined in the Credit Agreement have the same respective meaning when
used herein.
2. I am familiar with and have examined the provisions of the Credit
Agreement (including, without limitation, the financial covenants and
ratios set forth in Section 11.1.32 of the Credit Agreement) and I have
made all appropriate investigations of the records of each of the
Credit Parties and have asked all questions to the other executives and
officers of each of the Credit Parties as I have deemed necessary or
useful to allow me to give this certificate knowledgeably.
[PARAGRAPHS 3, 4 AND 5 ARE TO BE INCLUDED
ONLY IN XXXXXXX' CERTIFICATE OF
COMPLIANCE]
N-1
3. Based on the foregoing, I hereby certify that the financial and other
information contained in the financial statements attached hereto for
the [QUARTER/YEAR] ended [DATE] have been prepared in accordance with
the Credit Agreement and the calculations set forth below are true and
correct and have been prepared on a modified Consolidated basis (i.e.
Xxxxxxx and the Restricted Subsidiaries) in accordance with the Credit
Agreement.
4. The period to which the following calculations relate commenced on
[DATE] and ended on [DATE] (herein called the ["QUARTER"/"YEAR"]). The
only Restricted Subsidiaries during the [QUARTER/YEAR] were ICI and CII
[ADD OTHER RESTRICTED SUBSIDIARIES].
(A) INTEREST COVERAGE RATIO
The provisions of Section 11.1.32 (a) require that the
Interest Coverage Ratio shall not be less than 3.00 to 1.00 at
the end of the [QUARTER/YEAR].
The Interest Coverage Ratio (being the amount in Line (ix)
divided by the amount in Line (x)) for the last four quarters
was to 1.00, on the basis of the following:
(I) NET INCOME: DN$__________
(II) UNUSUAL GAINS OR LOSSES: DN$__________
(III) LINE (I) - LINE (II): DN$__________
(IV) PROVISION FOR INCOME TAXES: DN$__________
(V) INTEREST EXPENSE: DN$__________
(VI) DEPRECIATION AND AMORTIZATION: DN$__________
(VII) LINE (III) + LINE (IV) + LINE (V)
+ LINE (VI) = EBITDA: CDN$________
(VIII) CAPEX (MAINTENANCE): CDN$________
(IX) LINE (VII) - LINE (VIII): CDN$________
(X) INTEREST EXPENSE IN ACCORDANCE WITH GAAP: CDN$________
(XI) CAPITALIZED INTEREST CDN$________
(XII) AMORTIZATION OF DEFERRED FINANCING COSTS CDN$________
(XIII) INTEREST INCOME CDN$________
(XIV) LINE (X) + LINE (XI) - LINE (XII) - LINE (XIII)
= INTEREST EXPENSE CDN$________
N-2
(XV) LINE (IX) / LINE (XIV)
= INTEREST COVERAGE RATIO: _______ TO 1.00
(B) RATIO OF NET FUNDED DEBT TO TOTAL CAPITALIZATION
The provisions of Section 11.1.32(b) require that the ratio of
Net Funded Debt to Total Capitalization shall not be more than
0.50 to 1.00.
The ratio of Net Funded Debt to Total Capitalization at the
end of the [QUARTER/YEAR] was _____ to 1.00, on the basis of
the following:
(I) SHORT TERM BORROWINGS: CDN$______
(II) CURRENT PORTION OF LONG-TERM DEBT: CDN$______
(III) LONG-TERM DEBT: CDN$______
(IV) CAPITAL LEASES: CDN$______
(V) GUARANTEES: CDN$______
(VI) OTHER CONTINGENT LIABILITIES: CDN$______
(VII) DEFERRED PURCHASE PRICE OF PROPERTY: CDN$______
(VIII) TOTAL OF LINES (I) TO (VII): CDN$______
(IX) CASH CDN$______
(X) LINE (VIII) - LINE (IX) = NET FUNDED DEBT: CDN$______
(XI) CAPITAL STOCK: CDN$______
(XII) CAPITAL SURPLUS OR RETAINED EARNINGS (OR
MINUS DEFICIT): CDN$______
(XIII) CUMULATIVE TRANSLATION ADJUSTMENTS: CDN$______
(XIV) TOTAL OF LINES (XI) TO (XIII): CDN$______
(XV) INTANGIBLE ASSETS: CDN$______
(XVI) INVESTMENTS IN UNRESTRICTED SUBSIDIARIES: CDN$______
(XVII) LINES (XV) + LINE (XVI): CDN$______
(XVIII)LINE (XIV) - LINE (XVII)
= TANGIBLE NET WORTH: CDN$______
N-3
(XIX) LINE (X) + LINE (XVIII)
= TOTAL CAPITALIZATION: CDN$______
(XX) LINE (X) / LINE (XIX) = NET FUNDED DEBT
TO TOTAL CAPITALIZATION: _____ TO 1.00
5. I certify that the actual amount of Capex of Cdn$__________ incurred
during the Year is no less than the amount required to be spent to
maintain the assets of Xxxxxxx and the Restricted Subsidiaries at the
existing level of operational efficiency, [TO BE INSERTED ONLY ANNUALLY
AT THE END OF THE YEAR].
[3./5./6.] I certify that each Credit Party is actively keeping under review its
Computer Systems and taking all necessary measures to ensure that all
such Computer Systems will be Millennium Compliant before September 30,
1999; [THIS PARAGRAPH WILL NOT BE REQUIRED TO BE INCLUDED AFTER THE
FIRST FISCAL QUARTER OF 2000].
[4./6./7.] I certify that I have no knowledge of any Material Adverse Change
which has not been cured or waived in writing by or on behalf of the
Lenders [EXCEPT...].
[5./7./8.] I certify that I have no knowledge of any Default or Event of Default
under the Credit Agreement [EXCEPT FOR THOSE SET FORTH IN THE SCHEDULE
HERETO, IN WHICH CASE SUCH SCHEDULE ALSO SETS FORTH THE DATE OF
COMMENCEMENT THEREOF AND THE MEASURES BEING TAKEN IN RESPECT THEREOF].
[6./8./9.] I certify, for the purposes of the Subsidiary Guarantee of ICI, that,
in accordance with Section 123.66 of the COMPANIES ACT (Quebec), as at
_____, 19__(when expressed is US Dollars);
(a) the book value of the assets of ICI is: US$
-----------
(b) the realization value of the assets of ICI is: US$
-----------
(c) the liabilities of ICI is: US$
-----------
(d) the paid-up share capital account of ICI is: US$
-----------
(e) the greater of line (a) and line (b) LESS the
sum of line (c) and line (d) is:
US$
-----------
and that ICI is able to discharge its liabilities when due.
[THIS PARAGRAPH IS ONLY REQUIRED TO BE INCLUDED IN THE ANNUAL CERTIFICATE
OF ICI]
N-4
Signed at , this day of 19 .
---------------- -------- --------------------- -----
[NAME OF BORROWER]
By:
----------------------------------------
Name:
Title:
N-5
SCHEDULE "O" to the Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd. and Industries Cascades Inc. and Cascades Industries, Inc. and the
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
and the financial institutions named on the signature pages thereof, as Lenders,
with Royal Bank of Canada, as Arranger and as Agent
CERTAIN PERMITTED SALES OF ASSETS
(Section 11.2.2(c))
- Sale to Cascades Energie inc. or any of its Affiliates for the price of
Cdn$5.00 per square meter, up to an amount not expected to exceed
Cdn$10,000, of vacant parcels of land located at Kingsey Falls,
Province of Quebec.
O-1
SCHEDULE "P" to the Credit Agreement dated as of July 23, 1998 among Xxxxxxx
Papers Ltd. and Industries Cascades Inc. and Cascades Industries, Inc. and the
other Restricted Subsidiaries parties thereto from time to time, as Borrowers,
and the financial institutions named on the signature pages thereof, as Lenders,
with Royal Bank of Canada, as Arranger and as Agent
TRANSFER UNDERTAKING
(Section 18.3)
To: ROYAL BANK OF CANADA
(the " AGENT")
[LENDER]
[LENDER]
[LENDER]
(the "LENDERS")
- and -
XXXXXXX PAPERS LTD.
INDUSTRIES CASCADES INC.
CASCADES INDUSTRIES, INC.
[OTHER BORROWERS]
(the "BORROWERS")
WHEREAS the Borrowers did enter into a Credit Agreement dated
as of July 23, 1998 (the "CREDIT AGREEMENT"), with the Agent and the Lenders,
pursuant to which the Lenders, as defined in the Credit Agreement, subject to
the terms and conditions of the Credit Agreement, have agreed to make certain
credit facilities available to the Borrowers for an aggregate amount of up to
US$145,000,000 or the Equivalent Amount in Canadian Dollars or any combination
thereof;
WHEREAS pursuant to and in accordance with Section 18.3 of the
Credit Agreement, a Lender may assign or transfer all or any of its rights,
benefits and obligations under the Credit Agreement by notifying the Agent, the
Borrowers and the other Credit Parties and by causing the assignee or transferee
to complete, execute and deliver this Transfer Undertaking;
WHEREAS, ________________________________________ (the
"TRANSFEROR") wishes to assign and transfer to
___________________________________ (the "PURCHASER") the rights, benefits and
obligations of the Transferor under the Credit Agreement specified herein;
P-1
WHEREAS the Transferor has notified the Agent, the Borrowers
and the other Credit Parties of the assignment and transfer contemplated herein;
[AND WHEREAS THE RELATED US LENDER/RELATED CANADIAN LENDER OF
THE TRANSFEROR IS ALSO CONCURRENTLY ASSIGNING AND TRANSFERRING ITS OWN RIGHTS,
BENEFITS AND OBLIGATIONS UNDER THE CREDIT AGREEMENT.]
NOTE: THIS FORM OF TRANSFER UNDERTAKING MAY
REQUIRE TO BE ADJUSTED IF PAIRED LENDERS
DEEM IT APPROPRIATE TO JOINTLY ASSIGN THEIR
SHARED COMMITMENT USING A SINGLE FORM OF
TRANSFER UNDERTAKING.
NOW THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the signatories hereto agree as follows:
1. In this Agreement, and the introductory paragraphs, words and expressions
defined in the Credit Agreement have the same respective meaning when used
herein.
2. The Transferor assigns and transfers (the "TRANSFER") to the Purchaser,
and the Purchaser irrevocably purchases, takes and assumes from the Transferor,
and without recourse to the Transferor, effective on _______________ (the
"TRANSFER EFFECTIVE DATE") [THE ENTIRE/A PORTION OF THE] Commitment of the
Transferor in respect of the Credit Agreement consisting of [A REVOLVING
COMMITMENT OF US$____________, A TERM COMMITMENT OF US$____________/AN OVERDRAFT
AND L/C COMMITMENT OF US$____________], including, without limitation, all of
the related rights, benefits and obligations under the Credit Agreement and all
instruments, documents and collateral security, if any, pertaining thereto (the
"TRANSFERRED RIGHTS", the "TRANSFERRED BENEFITS", the "TRANSFERRED OBLIGATIONS",
as applicable, and collectively, the "TRANSFERRED RIGHTS, BENEFITS AND
OBLIGATIONS").
3. The Purchaser and the Transferor acknowledge that arrangements have been
made between them as to the portion, if any, of fees received or to be received
by the Transferor pursuant to the Credit Agreement and to be paid by the
Transferor to the Purchaser.
4. The Purchaser accepts the Transfer, assumes the Transferred
Obligations (the "ASSUMPTION") and agrees that it will be bound by the Credit
Agreement with respect to the Transferred Rights, Benefits and Obligations as
fully as if it had been an original signatory to the Credit Agreement with
respect thereto, to the extent that such Transferred Rights, Benefits and
Obligations arise or accrue on or after the Transfer Effective Date.
NOTE: SECTION 5 TO BE USED ONLY IF LIBOR LOANS, L/C'S OR
BANKERS' ACCEPTANCES OF THE TRANSFEROR ARE TO REMAIN
OUTSTANDING, SUBJECT TO APPROPRIATE ADJUSTMENTS IF
NEEDED TO REFLECT THE ACTUAL AGREEMENT BETWEEN
TRANSFEROR AND PURCHASER
P-2
[5. (a) Included in the Transferred Rights, Benefits and Obligations
is the Purchaser's assumed portion of certain Libor Loans,
Letters of Credit previously issued by the Transferor and
which have not been fully drawn as at the Transfer Effective
Date and Bankers' Acceptances previously accepted by the
Transferor which mature after the Transfer Effective Date. The
Purchaser's assumed portion of such outstanding Libor Loans,
Letters of Credit and Bankers' Acceptances is identified on
ANNEX A hereto, and is referred to herein as the "PURCHASED
LIBOR LOANS, L/C'S AND BANKERS' ACCEPTANCES". The Purchaser
hereby requests that the Transferor maintain, and the
Transferor hereby agrees to maintain, its existing funding or
other arrangements in respect of such Purchased Libor Loans,
L/C's and Bankers' Acceptances on behalf of, and for the
account of, the Purchaser.
(b) In consideration for the Transferor's agreement to maintain
its existing funding or other arrangements in respect of the
Purchased Libor Loans, L/C's and Bankers' Acceptances on
behalf of the Purchaser, the Purchaser hereby agrees to pay to
the Transferor the principal amount of, and interest on
(including, without limitation, the Applicable Margin and any
default interest which may be payable thereon pursuant to
Section 4.7 of the Credit Agreement), the Purchased Libor
Loans, L/C's and Bankers' Acceptances as and when such amounts
are or become due and payable (as the result of scheduled
payment, voluntary or mandatory prepayment, acceleration or
otherwise) from the Borrowers under the terms of the Credit
Agreement (each such payment of principal and interest on the
Purchased Libor Loans, L/C's and Bankers' Acceptances being
referred to herein as a "PURCHASED PAYMENT").
(c) The Purchaser hereby directs the Borrowers to make each
Purchased Payment otherwise due to the Purchaser to the Agent
for the account of the Transferor at the time, in the manner
and at the Transferor's Branch of Account provided in the
Credit Agreement. Notwithstanding anything contained herein to
the contrary, neither the failure of a Borrower to make any
principal, interest, L/C Fee or Acceptance Fee payment
required under the Credit Agreement nor the failure of a
Borrower to forward any Purchased Payment to the Transferor
shall affect the obligation of the Purchaser to pay the amount
of each Purchased Payment to the Agent for the account of the
Transferor as and when due, which obligation shall be and
remain absolute and unconditional.
(d) Each Borrower hereby agrees to indemnify the Transferor for
any and all amounts to which the Transferor would be entitled
under the Credit Agreement with respect to the Purchased Libor
Loans, L/C's and Bankers' Acceptances as if the Purchased
Libor Loans, L/C's and Bankers' Acceptances remained Libor
Loans, L/C's and Bankers' Acceptances of the Transferor
thereunder (including, without limitation, amounts payable by
the Borrower under Articles VIII, XII and XIII of the Credit
Agreement). Nothing contained herein shall limit or modify all
obligations of the Borrowers to the Agent, the Purchaser and
to all other Lenders in accordance with the terms of the
Credit Agreement including, without limitation, all
P-3
obligations of the Borrowers under Articles VIII, XII and XIII
of the Credit Agreement for the benefit of the Purchaser.
Nothing herein contained shall be construed or interpreted as
requiring a Borrower, once it has paid (I) to the Agent for
the account of the Transferor any amount referred to above to
pay the same amount to the Purchaser and/or (II) either to the
Agent for the account of the Transferor or the Purchaser the
face amount of any Purchased Libor Loans, L/C's and Bankers'
Acceptances, to pay the same amount to the other.
(e) Notwithstanding anything contained herein to the contrary,
upon the termination of the term of the Purchased Libor Loans
and Bankers' Acceptances (whether at their stated maturity or
otherwise), and the full drawing of the outstanding amount
under all Purchased L/C's, the Transferor shall have no
obligation to the Borrower or to the Purchaser to accept,
make, fund or maintain any Libor Loans, L/C's or Bankers'
Acceptances with respect to the Transferred Obligations. In
the event that a Borrower fails to indemnify the Transferor
pursuant to subparagraph 5(d) above, the Purchaser agrees to
pay to the Transferor, in immediately available funds, an
amount equal to the amount the said Borrower is so obligated
to pay. No such payment of any such amounts by the Purchaser
shall relieve a Borrower from its obligations hereunder and
under the Credit Agreement with respect to such Purchased
Libor Loans, L/C's and Bankers' Acceptances.]
[5/6]. The Transfer and the Assumption are governed by and subject to
Section 18.3 of the Credit Agreement and is made without novation.
[6/7]. The Purchaser acknowledges and confirms that it is satisfied
with the form and substance of the Credit Agreement and that it has not relied
upon and that the Transferor and/or the Agent has/have not made any
representation or warranty whatsoever as to the due execution, legality,
effectiveness, validity or enforceability of the Credit Agreement or any other
documentation or information delivered by the Transferor and/or the Agent to the
Purchaser in connection therewith or for the performance thereof by any party
thereto or for the financial condition of any Borrower. All representations,
warranties and conditions expressed or implied by law or otherwise are hereby
excluded.
[7/8]. The Purchaser represents and warrants [THAT IT IS NOT A
NON-RESIDENT WITHIN THE MEANING OF THE INCOME TAX ACT (CANADA), THAT ITS RELATED
US LENDER/RELATED CANADIAN LENDER IS _______________ AND] that it has itself
been, and will continue to be, solely responsible for making its own independent
appraisal of and investigation into the financial condition, creditworthiness,
affairs, status and nature of the Borrowers and has not relied and will not
hereafter rely on the Transferor and/or any of the Agents to appraise or keep
under review on its behalf the financial condition, creditworthiness, affairs,
status or nature of the Borrowers.
[8/9]. Each of the Transferor and the Purchaser represents and
warrants to the other, and to each of the Agents, the Lenders and the Borrowers
that it has the capacity and power to enter into the Transfer and the Assumption
in accordance with the terms hereof and to perform its obligations arising
therefrom, and all action required to authorize the execution and delivery
hereof and the performance of such obligations has been duly taken.
P-4
[9/10]. As a condition precedent to the effectiveness of the Transfer
and Assumption contemplated hereby, a processing and recordation fee in the
amount of US$3,500 shall be paid by the [TRANSFEROR/PURCHASER] to the Agent.
[10/11]. This Transfer Undertaking may be executed in two or more
counterparts, each of which may be communicated by telecopier or otherwise and
shall be considered an original and all of which together shall constitute one
and the same instrument.
[11/12]. This Transfer Undertaking shall be governed by and construed
in accordance with the laws of the Province of Quebec, Canada.
The parties confirm having requested that this Transfer
Undertaking and all related documents be drawn up in the English language./LES
PARTIES CONFIRMENT AVOIR REQUIS QUE CET ENGAGEMENT DE TRANSFERT ET TOUS LES
DOCUMENTS S'Y RAPPORTANT SOIENT REDIGES EN LANGUE ANGLAISE.
DATED as of the day of 19 .
--------------------- -------------------- -----
[ TRANSFEROR ]
By:
--------------------------------------
Name:
Title:
[ PURCHASING INSTITUTION ]
By:
--------------------------------------
Name:
Title:
P-5
[SIGNATURES OF BORROWERS ARE ONLY NEEDED PRIOR TO AN EVENT OF DEFAULT]
CONSENTED TO AND ACKNOWLEDGED:
XXXXXXX PAPERS LTD.
By:
------------------------------------------
Name:
Title:
INDUSTRIES CASCADES INC.
By:
------------------------------------------
Name:
Title:
CASCADES INDUSTRIES, INC.
By:
------------------------------------------
Name:
Title:
[OTHER BORROWER]
By:
------------------------------------------
Name:
Title:
P-6
ANNEX A
TO TRANSFER UNDERTAKING
PURCHASED LIBOR LOANS
Libor Rate
PRINCIPAL AMOUNT (INCLUDING APPLICABLE MARGIN) EXPIRY OF LIBOR INTEREST PERIOD
---------------- ----------------------------- -------------------------------
PURCHASED L/C'S
AMOUNT OUTSTANDING AS AT TRANSFER
PRINCIPAL AMOUNT DATE OF ISSUE EFFECTIVE DATE
---------------- -------------- ----------------------------------
P-7
PURCHASED BANKERS' ACCEPTANCES
PRINCIPAL AMOUNT ACCEPTANCE FEE TERM OF BANKERS' ACCEPTANCES
---------------- -------------- ----------------------------
P-8
TRANSFER UNDERTAKING
(Section 3.1)
To: ROYAL BANK OF CANADA
(the "Agent")
- and -
XXXXXXX PAPERS LTD.
INDUSTRIES CASCADES, INC.
CASCADES INDUSTRIES, INC.
(the "BORROWERS")
WHEREAS the Borrowers did enter into a Credit Agreement dated as of
July 23, 1998 (the "Credit Agreement"), with the Agent and the Lenders, pursuant
to which the Lenders, as defined in the Credit Agreement, subject to the terms
and conditions of the Credit Agreement, have agreed to make certain credit
facilities available to the Borrowers for an aggregate amount of up to
US$145,000,000 or the Equivalent Amount in Canadian Dollars or any combination
thereof;
WHEREAS Comerica Bank-Canada has been duly incorporated by Letter
Patent under The Bank Act (Canada) and is now eligible as a Related Canadian
Lender under the Credit Agreement;
WHEREAS pursuant to and in accordance with Section 3.1 of the Credit
Agreement, Comerica Bank as a Lender may transfer certain of its rights,
benefits and obligations under the Credit Agreement to Comerica Bank-Canada so
that both shall become Paired Lenders for the purposes of the Credit Agreement
having shared Commitments in respect of the Revolving Facility and the Term
Facility;
WHEREAS by copy hereof Comerica Bank will notify the Agent and the
Borrowers of the transfer contemplated herein;
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the signatories hereto agree as follows:
1. In this Agreement, and the introductory paragraphs, words and expressions
defined in the Credit Agreement have the same respective meaning when used
herein.
2. Comerica Bank (the "Transferor") assigns and transfers (the "Transfer") to
Comerica Bank-Canada (the "Purchaser"), and the Purchaser irrevocably purchases,
takes and assumes from the Transferor, and without recourse to the Transferor,
effective on November 23, 1998 (the "Transfer Effective Date") a portion of the
Commitment of the Transferor in respect of the Credit Agreement consisting of
Borrowings by the Canadian Borrowers under a Revolving Commitment of
US$600,000.00 and a Term Commitment of US$12,400,000.00; including, without
limitation, all of the related rights, benefits and obligations under the Credit
Agreement and all instruments, documents and collateral security, if any,
pertaining thereto (the "Transferred Rights", the "Transferred Benefits", the
"Transferred Obligations", as applicable, and collectively, the "Transferred
Rights, Benefits and Obligations"), but specifically excluding the
US$5,000,000.00 US Overdraft Facility.
3. Transferor and Purchaser agree that they will be Paired Lenders for the
purposes of the Credit Agreement having shared Commitments in respect of the
Revolving Facility and the Term Facility. The Purchaser and the Transferor
acknowledge that arrangements have been made between them as to the portion, if
any, of fees received or to be received by the Transferor pursuant to the Credit
Agreement and to be paid by the Transferor to the Purchaser.
4. The Purchaser accepts the Transfer, assumes the Transferred Obligations (the
"Assumption") and agrees that it will be bound by the Credit Agreement with
respect to the Transferred Rights, Benefits and Obligations as fully as if it
had been an original signatory to the Credit Agreement with respect thereto, to
the extent that such Transferred Rights, Benefits and Obligations arise or
accrue on or after the Transfer Effective Date.
5. The Purchaser acknowledges and confirms that it is satisfied with the form
and substance of the Credit Agreement and that it has not relied upon and that
the Transferor and/or the Agent has/have not made any representation or warranty
whatsoever as to the due execution, legality, effectiveness, validity or
enforceability of the Credit Agreement or any other documentation or information
delivered by the Transferor and/or the Agent to the Purchaser in connection
therewith or for the performance thereof by any party thereto or for the
financial condition of any Borrower. All representations, warranties and
conditions expressed or implied by law or otherwise are hereby excluded.
6. The Purchaser represents and warrants that it is not a non-resident within
the meaning of the Income Tax Act (Canada), that it has itself been, and will
continue to be, solely responsible for making its own independent appraisal of
and investigation into the financial condition, creditworthiness, affairs,
status and nature of the Borrowers and has not relied and will not hereafter
rely on the Transferor and/or any of the Agents to appraise or keep under review
on its behalf the financial condition, creditworthiness, affairs, status or
nature of the Borrowers.
7. Each of the Transferor and the Purchaser represents and warrants to the
other, and to each of the Agents and the Borrowers that it has the capacity and
power to enter into the Transfer in accordance with the terms hereof and to
perform its obligations arising therefrom, and all action required to authorize
the execution and delivery hereof and the performance of such obligations has
been duly taken.
8. This Transfer Undertaking may be executed in two or more counterparts, each
of which may be communicated by telecopier or otherwise and shall be considered
an original and all of which together shall constitute one and the same
instrument.
9. This Transfer Undertaking shall be governed by and construed in accordance
with the laws of the Province of Quebec, Canada.
The parties confirm having requested that this Transfer Undertaking
and all related documents be drawn up in the English language./Les parties
confirment avoir requis que cet engagement de transfert and tous les documents
s'y rapportant soient rediges en langue anglaise.
DATED as of the 23rd day of November, 1998.
COMERICA BANK
By: /s/ XXXXXXX PERSONS
------------------------------------
Name: Xxxxxxx Persons
Title: Vice President
COMERICA BANK-CANADA
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director and CEO
ACKNOWLEDGED:
ROYAL BANK OF CANADA ("Agent")
By: /s/ M. E. GAMES
-----------------------------------
Name: M. E. Games
Title: Manager Agency
XXXXXXX PAPERS LTD.
By: /s/ XXXXXXX XXXXXXXXX
------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: President & CEO
INDUSTRIES CASCADE INC.
By: /s/ XXXXXXX XXXXXX
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Tresorier
CASCADES INDUSTRIES, INC.
By: /s/ XXXXXXX XXXXXX
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Tresorier
