Exhibit 10.4
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF JUNE 21, 2001
FIRSTSERVICE CORPORATION
AS CANADIAN BORROWER
AND
FIRSTSERVICE (USA), INC. AND
FIRSTSERVICE DELAWARE, LP
AS U.S. BORROWERS
AND
THE WHOLLY-OWNED SUBSIDIARIES
NAMED ON THE EXECUTION PAGES HEREOF
AS UNLIMITED GUARANTORS
AND
THE BANKS NAMED ON THE EXECUTION PAGES HEREOF
AS LENDERS
BANK ONE, NA
AS SYNDICATION AGENT
AND
THE TORONTO-DOMINION BANK
AS COLLATERAL AGENT
AND
THE TORONTO-DOMINION BANK
AS CANADIAN ADMINISTRATION AGENT
AND
TORONTO DOMINION (TEXAS) INC.
AS U.S. ADMINISTRATION AGENT
XXXXXXX XXXXXX LLP FOGLER XXXXXXXX LLP
LENDERS' COUNSEL BORROWERS' CANADIAN COUNSEL
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS............................................................................2
1.1 Definitions..........................................................2
1.2 References..........................................................19
1.3 Interpretation......................................................20
1.4 Headings and Table of Contents......................................20
1.5 Accounting Terms....................................................20
1.6 Recitals............................................................21
1.7 Precedence..........................................................21
ARTICLE II
FACILITIES ....................................................................21
2.1 The Credit Facilities...............................................21
2.2 Notice and Revolving Nature of Borrowings...........................21
2.3 Conversion..........................................................25
2.4 Making Borrowings...................................................25
2.5 Participation of Each Lender........................................26
2.6 Bankers' Acceptances................................................26
2.7 Acceptance Date Procedure...........................................28
2.8 Purchase of Bankers' Acceptances....................................29
2.9 Payment of Bankers' Acceptances.....................................29
2.10 Set-Off and Netting.................................................30
2.11 Letters of Credit...................................................30
ARTICLE III
REPAYMENT AND ACCOUNTS................................................................32
3.1 Repayment...........................................................32
3.2 Accounts kept by the Canadian Agent.................................32
3.3 Accounts kept by the Canadian Swingline Lender......................32
3.4 Accounts kept by the U.S. Swingline Lender..........................33
3.5 Accounts kept by the U.S. Agent.....................................33
3.6 Accounts kept by each Canadian Lender...............................33
3.7 Accounts kept by U.S. Lenders.......................................34
3.8 Promissory Notes....................................................34
3.9 Excess Resulting from Exchange Rate Change..........................34
3.10 Currency............................................................35
3.11 Extension of Final Maturity Date....................................35
ARTICLE IV
INTEREST, ACCEPTANCE FEE, LETTER OF CREDIT FEE AND COMMITMENT FEES....................36
4.1 Interest on Libor Loans.............................................36
4.2 Interest on U.S. Base Rate Loans....................................37
4.3 Interest on Prime Rate Loans........................................38
4.4 Interest on U.S. Prime Rate Loans...................................38
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4.5 Libor Interest Periods..............................................39
4.6 Interest on Overdue Amounts.........................................39
4.7 Acceptance Fee......................................................40
4.8 Commitment Fees.....................................................40
4.9 Letter of Credit Fronting Fee.......................................40
4.10 Effective Date for Changes in Applicable Margins....................41
ARTICLE V
CONDITIONS PRECEDENT..................................................................41
5.1 Conditions Precedent................................................41
5.2 Conditions Precedent to Borrowings to make Acquisitions.............43
5.3 Waiver..............................................................44
5.4 Hostile Takeover....................................................44
ARTICLE VI
PREPAYMENT, CANCELLATION, MANDATORY APPLICATION OF CASH PROCEEDS......................44
6.1 Prepayment and Cancellation.........................................44
6.2 Notice..............................................................45
6.3 Status of Lender....................................................45
6.4 Fees................................................................46
6.5 Mandatory Application of Cash Proceeds..............................46
ARTICLE VII
SPECIAL LIBOR AND INCREASED COST PROVISIONS...........................................46
7.1 Substitute Rate of Borrowing........................................46
7.2 Increased Cost......................................................47
7.3 Illegality..........................................................48
7.4 Indemnity...........................................................48
7.5 Other Increased Costs or Reductions in Return.......................48
7.6 Additional Cost in Respect of Tax...................................51
7.7 Claims under Section 7.6............................................51
7.8 Tax Receipts........................................................51
7.9 Internal Revenue Service Forms......................................52
ARTICLE VIII
REPRESENTATIONS, WARRANTIES & COVENANTS...............................................53
8.1 Representations and Warranties......................................53
8.2 Covenants...........................................................56
ARTICLE IX
EVENTS OF DEFAULT.....................................................................66
9.1 Events of Default...................................................66
9.2 Security............................................................69
9.3 Remedies Not Exclusive..............................................69
9.4 Set-Off.............................................................69
ARTICLE X
PAYMENTS..............................................................................70
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10.1 Payments to Agents/Swingline Lenders................................70
10.2 Payments by Lenders to Agents.......................................71
10.3 Payments by Agents to Borrowers.....................................71
10.4 Distribution to Lenders and Application of Payments.................71
10.5 No Set-Off or Counterclaim..........................................71
10.6 Non-Receipt By Agents...............................................72
10.7 When Due Date Not Specified.........................................72
10.8 Agents' Authority to Debit..........................................72
ARTICLE XI
EXPENSES..............................................................................72
11.1 Payment of Expenses.................................................72
11.2 Survival............................................................73
11.3 Environmental Indemnity.............................................73
ARTICLE XII
FEES..................................................................................75
12.1 Agency Fee..........................................................75
12.2 Miscellaneous.......................................................75
ARTICLE XIII
THE AGENTS............................................................................75
13.1 Agents..............................................................75
13.2 Agents' Responsibility..............................................76
13.3 Agents' Duties......................................................77
13.4 Protection of Agents................................................77
13.5 Indemnification of Agents...........................................78
13.6 Termination or Resignation of Agent.................................79
13.7 Rights of an Agent as Lender........................................79
13.8 Authorized Waivers, Variations and Omissions........................79
13.9 Financial Information Concerning the Borrowers or Guarantors........80
13.10 Knowledge of Financial Situation of Borrowers.......................80
13.11 Legal Proceedings...................................................80
13.12 Capacity as Agent...................................................80
13.13 Deposits or Loans Respecting the Borrowers..........................81
ARTICLE XIV
ASSIGNMENTS AND TRANSFERS.............................................................81
14.1 Benefit of Agreement................................................81
14.2 Assignments and Transfers by a Borrower or an Unlimited Guarantor...81
14.3 Assignments and Transfers by a Lender...............................81
14.4 Transfer Certificate................................................82
14.5 Notice..............................................................83
14.6 Sub-Participations..................................................83
14.7 Disclosure..........................................................84
14.8 Assignment to Federal Reserve Bank..................................84
ARTICLE XV
GOVERNING LAW, COURTS AND JUDGMENT CURRENCY...........................................84
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15.1 Governing Law.......................................................84
15.2 Courts..............................................................84
15.3 Judgment Currency...................................................85
ARTICLE XVI
GUARANTORS' OBLIGATIONS...............................................................85
16.1 Guarantee...........................................................85
ARTICLE XVII
MISCELLANEOUS.........................................................................87
17.1 Equal Ranking of Lenders............................................87
17.2 Sharing of Information..............................................87
17.3 Severability........................................................88
17.4 Remedies and Waivers................................................88
17.5 Direct Obligation...................................................88
17.6 Notices.............................................................88
17.7 Counterparts........................................................89
17.8 Limit on Rate of Interest...........................................89
17.9 No Merger or Novation...............................................90
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SCHEDULES
"A" Call Price Formulae
"B" Net Proceeds of Bankers' Acceptances
"C" Security
"D" Shareholders' Agreements
"E" Form of Transfer Certificate
"F" Form of Undertaking
"G" Form of Conversion Notice
"H" Form of Drawdown Notice
"I" Details of Issue
"J" Form of Compliance Certificate
"K" Intentionally Deleted
"L" Commitments
"M" Intentionally Deleted
"N" Form of Officer's Certificate Re: Acquisition Facility
"O" Intentionally Deleted
"P" Permitted Encumbrances
"Q" Form of Promissory Note
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF JUNE 21, 2001
AMONG:
FIRSTSERVICE CORPORATION, a corporation duly organized and
existing under the laws of Ontario,
AND:
FIRSTSERVICE (USA), INC., a corporation duly organized and
existing under the laws of the State of Delaware and
FIRSTSERVICE DELAWARE, LP, a limited partnership duly
organized and existing under the laws of the State of
Delaware,
AND:
THE WHOLLY-OWNED SUBSIDIARIES NAMED ON THE EXECUTION PAGES
HEREOF
AND:
THE BANKS NAMED ON THE EXECUTION PAGES HEREOF, as lenders
AND:
BANK ONE, NA, as syndication agent
AND:
THE TORONTO-DOMINION BANK, as collateral agent,
AND:
THE TORONTO-DOMINION BANK, as Canadian administration agent
AND:
TORONTO DOMINION (TEXAS) INC. as U.S. administration agent
WHEREAS, the Canadian Borrower, the Unlimited Guarantors, Dresdner Bank
Canada, The Toronto-Dominion Bank, First Chicago NBD Bank Canada and Dresdner
Bank Canada as Agent entered into a Credit Agreement dated as of December 16,
1996 (the "Original Credit Agreement");
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AND WHEREAS, the Original Credit Agreement was amended as of August 7,
1997, September 30, 1997, January 8, 1998, January 12, 1998 and May 13, 1998;
AND WHEREAS the Original Credit Agreement so amended was amended and
restated by way of an amended and restated credit agreement dated as of June 1,
1998 (the "First Amended and Restated Credit Agreement");
AND WHEREAS the First Amended and Restated Credit Agreement was amended
and restated by way of a second amended and restated credit agreement dated as
of April 1, 1999 (the "Second Amended and Restated Credit Agreement");
AND WHEREAS, the parties hereto desire to amend and restate the terms
of the Second Amended and Restated Credit Agreement;
AND WHEREAS the Borrowers have requested that:
(a) the Canadian Lenders make available to the Canadian Borrower
the Canadian Revolving Facility to finance acquisitions,
working capital needs, capital expenditures and for general
corporate purposes of the Canadian Borrower and its
Subsidiaries; and
(b) the U.S. Lenders make available to the U.S. Borrowers the U.S.
Revolving Facility to finance acquisitions, working capital
needs, capital expenditures and for general corporate purposes
of Subsidiaries of the Canadian Borrower located in the United
States.
AND WHEREAS, the Canadian Borrower has requested that the Canadian
Swingline Lender make the Canadian Swingline Facility available to the Canadian
Borrower and the U.S. Borrowers have requested that the U.S. Swingline Lender
make the U.S. Swingline Facility available to the U.S. Borrowers;
AND WHEREAS the Lenders are willing to grant the Facilities upon and
subject to the following terms and conditions;
NOW THEREFORE in consideration of the respective covenants of the
parties contained herein and other good and valuable consideration (the receipt
and sufficiency of which is hereby acknowledged) the parties amend and restate
with effect as and from the Effective Date the terms of the Second Amended and
Restated Credit Agreement and the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS
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In this Agreement, unless the context otherwise requires, the terms
defined in the introduction of the parties and the recitals shall have, as
herein used, the same meanings and:
"ACCEPTANCE DATE" means any Business Day on which a Bankers' Acceptance is or is
requested to be issued hereunder.
"ACCEPTANCE FEE" means in respect of any Bankers' Acceptance outstanding at any
time on or after the Effective Date the Acceptance Fees described in the
definition of Applicable Margin.
"ACCOMMODATION" has the meaning attributed thereto in Section 7.5 (a).
"ACCOUNTS" means the accounts kept by the Canadian Agent, the Canadian Swingline
Lender, the U.S. Agent or the U.S. Swingline Lender, as the case may be,
pursuant to Section 3.2, 3.3, 3.4 and 3.5 to record the Borrowers' liabilities
to the Agents and each Lender under this Agreement.
"ACQUISITION ENTITY" means an Eligible Business acquired by the Canadian
Borrower or a Subsidiary thereof as permitted under this Agreement.
"ADDITIONAL COMPENSATION" has the meaning attributed thereto in Section 7.2.
"ADDITIONAL OTHER COMPENSATION" has the meaning attributed thereto in Section
7.5.
"ADVANCE" means an advance of money under the Facilities.
"AFFECTED SUBSIDIARY" means any Subsidiary other than the Wholly-Owned
Subsidiaries.
"AFFILIATE" means, in respect of any Person (the "first Person"), any Person
which, directly or indirectly, controls or is controlled by or is under common
control with the first Person; and for the purpose of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with") means the power to direct, or cause to be directed, the
management and policies of a Person whether through the ownership of voting
shares or by contract or otherwise.
"AGENTS" means collectively the Canadian Agent, the Collateral Agent and the
U.S. Agent and "Agent" means any one of the Canadian Agent, the Collateral Agent
or the U.S. Agent.
"AGREEMENT" means this Third Amended and Restated Credit Agreement dated as of
June 21, 2001 and any future amendments or supplements to it.
"AMOUNT" has the meaning attributed thereto in Section 9.1(n)(ii)(B).
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"APPLICABLE MARGIN" means the following fees, rates and margins per annum:
Total Debt/Consolidated Total Debt/Consolidated Total Debt/Consolidated
EBITDA EBITDA EBITDA
Ratio of < 2.5:1 Ratio of > =2.5:1 but < 3.0:1 Ratio of > =3.0:1
Acceptance Fee 1.50% 2.25% 3.00%
U.S. Base Rate Margin 0.50% 1.25% 2.00%
Letter of Credit Fee 1.50% 2.25% 3.00%
Libor Margin 1.50% 2.25% 3.00%
Prime Rate Margin .50% 1.25% 2.00%
Commitment Fee .375% .50% .75%
Changes in the Applicable Margins become effective in accordance with Section
4.10.
"AUTHORIZED SIGNATORY" in relation to a Borrower and any communication to be
made or document to be executed or certified by it, means at any time a Person
who is at such time duly appointed as such by such Borrower in a manner
acceptable to the Canadian Agent or the U.S. Agent, as the case may be, acting
reasonably.
"AVAILABLE PROCEEDS" has the meaning ascribed to it in Section 2.7 (b) (iv).
"B/A MATURITY DATE", in respect of a Bankers' Acceptance, means the date on
which such Bankers' Acceptance matures.
"BA DISCOUNT RATE" means, in relation to any Bankers' Acceptance, the average
rate (calculated on the basis of 365 days and rounded upwards to the nearest one
hundredth of one percent (0.01%), if such average is not a multiple) for
Canadian Dollar bankers' acceptances having a comparable term that appears on
the Reuters Screen CDOR Page (or such other page as is a replacement page for
such bankers' acceptances) at 10:00 a.m. (Toronto, Ontario time) for bankers'
acceptances to be accepted by Schedule I Canadian Banks (the "CDOR Rate") and in
the case of Bankers Acceptances to be accepted by Canadian Lenders which are
Schedule II Canadian Banks the lesser of (a) the bid rate quoted by such Lender
for its own bankers' acceptances of a like term with effect as at or about 10
a.m. on the applicable Drawdown Date or Conversion Date; and (b) the CDOR Rate
plus 10 basis points. If the CDOR Rate is not available at such time, the rate
otherwise determined by the Canadian Agent at or about 10:00 a.m. on the date of
acceptance of such Bankers' Acceptance as the discount rate (rounded upwards to
the nearest one-one hundredth of one percent (0.01%) based on a year of 365 days
applicable to bankers' acceptances with terms equivalent to the term of such
Bankers' Acceptances;
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"BANKERS' ACCEPTANCE" means a xxxx of exchange or a depository note, duly
completed and accepted by a Canadian Lender under the Canadian Revolving
Facility pursuant to this Agreement.
"BORROWERS" means the Canadian Borrower and the U.S. Borrowers and "Borrower"
means either the Canadian Borrower or either of the U.S. Borrowers.
"BORROWERS' CANADIAN COUNSEL" means Fogler, Xxxxxxxx or any other firm of
solicitors selected by the Borrowers and acceptable to the Canadian Agent,
acting reasonably.
"BORROWERS' U.S. COUNSEL" means Shearman & Sterling or Xxxxxxxx & Associates or
any one or more firms of attorneys selected by the Borrowers and acceptable to
the U.S. Agent, acting reasonably.
"BORROWING" means a utilization of a Facility by way of Loans, by the issue of
Bankers' Acceptances or by the issue of Letters of Credit.
"BUSINESS DAY" means
(a) in respect of Borrowings available to a Borrower by way of Libor Loans
and payments in connection therewith, a day (other than Saturday or
Sunday) which is a day for trading by and between banks in U.S. Dollar
deposits in the London interbank market which is also a day on which
banks are generally open for business in New York City and Toronto;
(b) in respect of Borrowings available to a Borrower by way of U.S. Base
Rate Loans or Letters of Credit denominated in U.S.$, a day (other than
Saturday or Sunday) on which banks are generally open for business in
New York City and Toronto; and
(c) for all other purposes of this Agreement, a day (other than Saturday or
Sunday) on which banks are generally open for business in Toronto.
"CALL OPTION TRIGGERING EVENT" means, in respect of any Affected Subsidiary:
(a) the 61st day following the commencement of any actions or proceedings
against such Subsidiary or against any of the property thereof before
any court, governmental agency or arbitrator which, if determined
adversely, may have a material adverse effect on the financial
condition or operations of such Subsidiary unless the Canadian Borrower
shall have satisfied the Majority Lenders that such Subsidiary shall
not be materially and adversely affected by such action or proceeding
or the consequences arising therefrom; or
(b) the 31st day following the receipt by such Subsidiary of any Violation
Notice which, if same were enforced, may have a material adverse effect
on the financial condition or operations of such Subsidiary, unless the
Canadian Borrower shall have satisfied
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the Majority Lenders that such Subsidiary shall not be materially
and adversely affected by such Violation Notice or the consequences
arising therefrom; or
(c) the EBITDA of such Subsidiary for any period of 4 consecutive Quarters
ended (the "Relevant 4 Quarter Period") is at least 50% less than such
Subsidiary's EBITDA for the period of 4 consecutive Quarters ending
immediately prior to the commencement of the Relevant 4 Quarter Period
(an "Earnings Call Option Triggering Event").
"CALL OPTION TRIGGERING EVENT NOTICE" means a written notice from the Canadian
Agent, if the Canadian Agent is so directed by the Majority Lenders, to the
Canadian Borrower requiring the Canadian Borrower to cause an Affected
Subsidiary in respect of which a Call Option Triggering Event shall have
occurred to become a Direct Guarantor; provided that, Majority Lenders shall not
be entitled to direct the Canadian Agent to issue a Call Option Triggering Event
Notice following the occurrence of an Earnings Call Option Triggering Event
unless the Canadian Borrower has a Total Debt to Consolidated EBITDA Ratio equal
to or greater than 3.25 to 1.
"CALL PRICE FORMULAE" means the call price formulae described on Schedule "A".
"CANADIAN AGENT" means The Toronto-Dominion Bank and its successors and assigns
duly appointed in accordance with Section 13.6.
"CANADIAN ASSIGNEE" has the meaning ascribed to it in Section 14.3(a).
"CANADIAN BORROWER" means FirstService Corporation.
"CANADIAN DOLLARS" means the lawful money of Canada and "CDN $" has a
corresponding meaning.
"CANADIAN FACILITIES" means the Canadian Revolving Facility and the Canadian
Swingline.
"CANADIAN LENDERS" means the Lenders identified as Canadian Lenders on the
execution pages hereof having a Commitment to lend or when such Commitment shall
have terminated, having Borrowings outstanding to the Canadian Borrower under
the Canadian Facilities.
"CANADIAN REVOLVING FACILITY" means the Commitments of the Canadian Lenders to
make Advances to the Canadian Borrower in accordance with Section 2.2(a) and
such Advances so made.
"CANADIAN REVOLVING FACILITY COMMITMENT" means the Commitments of the Canadian
Lenders to make Advances to the Canadian Borrower up to the Cdn.$ Equivalent
Amount of US$36,000,000; provided that the aggregate outstanding Borrowings
under the Canadian Facilities shall not exceed the Total Canadian Commitments at
any time.
"CANADIAN SWINGLINE FACILITY" means the Commitment of the Canadian Swingline
Lender to make Advances to the Canadian Borrower in accordance with Section
2.2(b) and such Advances so made.
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"CANADIAN SWINGLINE COMMITMENT" means the Commitment of the Canadian Swingline
Lender to make Advances to the Canadian Borrower of up to the Cdn$ Equivalent
Amount of US$4,000,000 which Commitment constitutes a subcommitment of the Total
Canadian Commitments of The Toronto-Dominion Bank; provided that the aggregate
outstanding Borrowings under the Canadian Facilities shall not exceed the Total
Canadian Commitments at any time.
"CANADIAN SWINGLINE LENDER" means The Toronto-Dominion Bank and its successors
and assigns.
"CAPITAL EXPENDITURES" means capital expenditures of the Canadian Borrower and
its Subsidiaries (other than in respect of acquisitions of Acquisition
Entities), determined in accordance with GAAP on a consolidated basis.
"CASH AMOUNT" means, for the purposes of Schedule "O" referred to in Subsection
5.2(i)(D) hereof, that portion of the consideration payable in cash in respect
of any purchase of shares by the Canadian Borrower or a Subsidiary in the
capital stock of any Subsidiary pursuant to the exercise of any call option
right in favour of the Canadian Borrower or Subsidiary, as the case may be,
under the terms of any Shareholders Agreement in respect of such Subsidiary.
"CODE" means the Internal Revenue Code (U.S.) of 1986, as amended or any
successor statute.
"COLLATERAL AGENT" means The Toronto-Dominion Bank and its successors and
assigns acting in the capacity of collateral agent for the Lenders hereunder
with respect to the Security.
"COMMITMENT" means, except as otherwise provided herein, the amount set opposite
each Lender's name on Schedule "L" hereof as its Commitment to each of the
Facilities.
"CONSOLIDATED DEPRECIATION AND AMORTIZATION EXPENSE" means, for any period
depreciation, amortization and depletion charged to the income statement of the
Canadian Borrower and its Subsidiaries for such period, determined in accordance
with GAAP on a consolidated basis.
"CONSOLIDATED EARNINGS" means, for any period, Consolidated Net Income, but
excluding in each case for such period: (i) any gain or loss recorded in income
arising from the sale of capital assets, as determined in accordance with GAAP;
(ii) any gain or loss recorded in income arising from any write-up or write-down
of assets, as determined in accordance with GAAP; (iii) any gain or loss
recorded in income arising from the acquisition of any securities of the
Canadian Borrower or any of its Subsidiaries, as determined in accordance with
GAAP; (iv) any non-cash gain or loss recorded in income from discontinued
operations from and after the date of sale or discontinuance of such operations,
as determined in accordance with GAAP; or (v) any other non-cash gain or loss
arising from items that do or do not have all the characteristics of
extraordinary items but which result from transactions or events that
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are not expected to occur frequently over several years or do not typify normal
business activities of the Canadian Borrower and its Subsidiaries, as determined
in accordance with GAAP, to the extent that any such gain or loss has been
recorded in income and has been disclosed separately in the income statement for
the Canadian Borrower and its Subsidiaries or the notes thereto.
"CONSOLIDATED EBITDA" means for any period, Consolidated Earnings, increased by
the sum of: (i) Consolidated Interest Charges; (ii) Consolidated Income Tax
Expense; (iii) Consolidated Depreciation and Amortization Expense and (iii) the
minority interest share of Earnings as stated on the consolidated financial
statements of the Canadian Borrower, in each case for such period.
"CONSOLIDATED INCOME TAX EXPENSE" means, for any period, the aggregate of all
Taxes (including deferred Taxes) based on the income of the Canadian Borrower
and its Subsidiaries for such period, determined in accordance with GAAP on a
consolidated basis.
"CONSOLIDATED INTEREST CHARGES" means, for any period, the total of all items
properly classified as interest expense for the Canadian Borrower and its
Subsidiaries for such period, determined in accordance with GAAP on a
consolidated basis.
"CONSOLIDATED NET INCOME" means, for any period, the Net Income (loss) after
taxes of the Canadian Borrower and its Subsidiaries for such period, determined
in accordance with GAAP on a consolidated basis.
"CONSOLIDATED TOTAL ASSETS" means, for any period, the Total Assets of the
Canadian Borrower and its Subsidiaries for such period, determined in accordance
with GAAP.
"CONVERSION" means the conversion of a Borrowing or any portion thereof in
accordance with Section 2.3.
"CONVERSION DATE" means the date a Borrower has notified the Canadian Agent or
the U.S. Agent, as the case may be, to be the date on which it has elected to
convert a Borrowing or a portion thereof pursuant to Section 2.3.
"DEFAULT" means an event with which notice or lapse of time or both will become
an Event of Default.
"DEPRECIATION AND AMORTIZATION EXPENSE" means, for any period, depreciation,
amortization and depletion charged to the income statement of a Person for such
Person, determined in accordance with GAAP.
"DIRECT GUARANTOR" means each Subsidiary of the Canadian Borrower, of which the
Canadian Borrower shall at any time directly or indirectly own and control 100%
of the issued and outstanding shares, equity or other ownership interests which
shall have executed and delivered to the Collateral Agent the Direct Security.
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"DIRECT SECURITY" means the Security designated as Direct Security in Schedule
"C".
"DISPOSITION" has the meaning attributed to it in Section 8.2(c)(ii).
"DRAWDOWN" means a drawdown of a Borrowing by a Borrower.
"DRAWDOWN DATE" means any Business Day when a Borrower makes a Drawdown or a
Conversion Date with respect to any Borrowing or portion thereof.
"EARNINGS" means, for any Person for any period, Net Income for such Person, but
excluding in each case for such Person for such period: (i) any gain or loss
recorded in income arising from the sale of capital assets, as determined in
accordance with GAAP; (ii) any gain or loss recorded in income arising from any
write-up or write-down of assets, as determined in accordance with GAAP; (iii)
any gain or loss recorded in income arising for the acquisition of any
securities of such Person, as determined in accordance with GAAP; or (iv) any
non-cash gain or loss recorded in income from discontinued operations from and
after the date of sale or discontinuance of such operations, as determined in
accordance with GAAP; or (v) any other non-cash gain or loss arising from items
that do or do not have all the characteristics of extraordinary items but which
results from transactions or events that are not expected to occur frequently
over several years or do not typify normal business activities of such Person,
as determined in accordance with GAAP, to the extent that any such gain or loss
has been recorded in income and has been disclosed separately in the income
statement for such Person or the notes thereto.
"EARNINGS CALL OPTION TRIGGERING EVENT" has the meaning ascribed to it in
paragraph (c) in the definition of "Call Option Triggering Event".
"EBITDA" means, for any Person for any period, Earnings of such Person,
increased by the sum of: (i) Interest Charges; (ii) Income Tax Expense; and
(iii) Depreciation and Amortization Expenses and, (iv) the minority interest
share of Earnings as stated on any consolidated financial statements of any such
Person, in each case for such Person for such period.
"EFFECTIVE DATE" means June 29, 2001.
"ELIGIBLE BUSINESS" means, in respect of any business to be acquired by the
Canadian Borrower or its Subsidiaries, a business which:
(a) is substantially similar to the "core" businesses currently conducted
by the Canadian Borrower and its Subsidiaries, taken as a whole, in the
reasonable opinion of the Canadian Borrower; which "core" businesses of
the Canadian Borrower and its Subsidiaries are as follows:
(i) the security business,
(ii) the property management business,
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(iii) the property maintenance business,
(iv) the service franchise business,
(v) landscape, lawn-care and lawn maintenance business,
(vi) the interior or exterior pest control businesses,
(vii) business out-sourcing,
(viii) residential and commercial cleaning and/or maintenance
business; and
(ix) customer support and fulfillment.
(b) does not include (i) manufacturing, fabrication or similar processes or
(ii) retail business;
(c) does not include any business that carries on a material part of its
business outside of Canada or the United States of America; and
(d) as the result of completion of the acquisition of such business, no
Default or Event of Default will occur; including for greater
certainty, the Canadian Borrower will not be in default of its
covenants contained in Section 8.2(o).
"ENVIRONMENTAL LAWS" means all laws, statutes, codes, ordinances, orders,
decrees, rules, regulations, guidelines, standards, judgements, or instruments,
in each case having the force of law, of any authority having jurisdiction
relating in whole or in part to the environment or its protection.
"EQUIVALENT AMOUNT" means on any date, as the case may be, the amount of Cdn.
Dollars into which an amount of U.S. Dollars may be converted or the amount of
U.S. Dollars into which an amount of Cdn. Dollars may be converted at the
Canadian Agent's spot buying rate in Toronto as at approximately 12:00 noon, on
such date.
"ERISA" has the meaning ascribed to it in Section 8.1(n).
"EVENT" has the meaning attributed thereto in Section 7.5(b).
"EVENT OF DEFAULT" has the meaning ascribed to it in Section 9.1.
"EXTENSION DATE" has the meaning ascribed to it in Section 3.11(a).
"EXTENSION REQUEST" has the meaning ascribed to it in Section 3.11(a).
"FACILITIES" means, collectively, the Revolving Facilities and the Swingline
Facilities.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to (a) the weighted average of the
rates on overnight federal
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funds transactions with members of the Federal Reserve System 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 (b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the applicable U.S. Base Rate Reference Bank from three federal
funds brokers of recognized standing selected by it.
"FINAL MATURITY DATE" means June 25, 2004 unless extended in accordance with the
terms hereof.
"FINANCIAL CONTRACT OBLIGATIONS" means all obligations, present and future,
direct or indirect, contingent or absolute, of a Borrower and/or its
Subsidiaries in respect of, in each case determined on a "marked to market"
basis on the date of determining the amount of such obligations,:
(a) a currency or interest rate swap agreement;
(b) a swap, future, forward or other foreign exchange agreement;
(c) a forward rate agreement;
(d) any derivative, combination or option in respect of, or agreement
similar to, an agreement or contract referred to in paragraphs (a) to
(c);
(e) any master agreement in respect of any agreement or contract referred
to in paragraphs (a) to (c); or
(f) a guarantee of the liabilities under an agreement or contract referred
to in paragraphs (a) to (c).
"FIRST AMENDED AND RESTATED CREDIT AGREEMENT" has the meaning attributed thereto
in the recitals.
"FISCAL YEAR" means a fiscal year of the Canadian Borrower; currently the Fiscal
Year ends on March 31.
"FIXED CHARGE COVERAGE RATIO" means, in respect of any period, the quotient
obtained by dividing:
(a) Consolidated EBITDA less Capital Expenditures and less income taxes
paid in cash for such period; by
(b) the sum (as denominator) of (i) Consolidated Interest Charges for such
period, (ii) scheduled principal repayments and capital lease principal
payments for such period, and (iii) payments of any dividends
determined in accordance with GAAP on a consolidated basis.
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"FS (USA)" means FirstService (USA), Inc.
"FSLLC" means FirstService Delaware, LLC.
"FSLP" means FirstService Delaware, LP.
"GAAP" means generally accepted accounting principles applied in the United
States.
"GUARANTOR" means any Person, including an Unlimited Guarantor and a Direct
Guarantor, which shall have provided a guarantee of a Borrower's obligations
hereunder in favour of the Collateral Agent and/or the Lenders.
"GUARANTEED OBLIGATIONS" means the Canadian Borrower's Guaranteed Obligations,
(as such term is defined in Section 16.1(a)) and/or the Unlimited Guarantor's
Guaranteed Obligations (as such term is defined in Section 16.1(b)).
"HAZARDOUS MATERIAL" means any substance, waste, solid, liquid, or gaseous
matter, petroleum or petroleum derived substance, micro-organism, sound,
vibration, ray, heat, odour, radiation, energy vector, plasma, organic or
inorganic matter, whether animate or inanimate, transient reaction intermediate
or any combination of the foregoing deemed hazardous, hazardous waste, solid
waste, or pollutant, a deleterious substance, or a contaminant under any
Environmental Law.
"INCOME TAX EXPENSE" means, for any period, the aggregate of all Taxes
(including deferred Taxes) based on the income of a Person for such period,
determined in accordance with GAAP.
"INITIAL ADVANCE" means, in respect of a Facility, the Borrowing, or where more
than one Borrowing may be made thereunder, the first Borrowing, contemplated to
be made thereunder pursuant to this Agreement.
"INTERCREDITOR AGREEMENT" means an intercreditor agreement among the Lenders,
the Collateral Agent, the lenders under the Private Placement and the collateral
agent to the lenders under the Private Placement, in form and substance
satisfactory to the Lenders and Lenders' Counsel
"INTEREST CHARGES" means for any period, the total of all items properly
classified as interest expense for a Person for such period, determined in
accordance with GAAP.
"INTEREST COVERAGE RATIO" means, in respect of any period, the quotient obtained
by dividing (a) the amount (as numerator) obtained by subtracting (i) capital
expenditures (other than acquisition expenditures) for such period from (ii)
Consolidated EBITDA for such period by (b) the sum of Consolidated Interest
Charges for such period.
"INTEREST PAYMENT DATE" means (a) in respect of a Prime Loan, a U.S. Prime Rate
Loan or an U.S. Base Rate Loan and Article XII, the 1st Business Day of each
Quarter and (b) in respect of a Libor Loan, the last day of the applicable Libor
Interest Period and, where any
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Libor Interest Period is longer than 90 days, the 90th day or the last Business
Day of such Libor Interest Period.
"ISSUING BANK" means, in the case of Letters of Credit issued under the Canadian
Revolving Facility, a Canadian Lender which issues Letters of Credit hereunder
and, in the case of Letters of Credit issued under the U.S. Revolving Facility,
a U.S. Lender which issues Letters of Credit hereunder. As of the Effective
Date, the Issuing Bank for Letters of Credit issued under the Canadian Revolving
Facility is The Toronto-Dominion Bank and the Issuing Bank for Letters of Credit
issued under the U.S. Revolving Facility is Bank One, NA or Toronto Dominion
(Texas) Inc.
"LENDERS" means the Canadian Lenders and the U.S. Lenders and their respective
successors and assigns. "Lender" means any Canadian Lender or U.S. Lender, as
the case may be.
"LENDERS' COUNSEL" means Xxxxxxx Xxxxxx LLP or any other firm of solicitors
selected by the Majority Lenders.
"LETTER OF CREDIT" means a Standby Letter of Credit or a Trade Letter of Credit
issued by an Issuing Bank at the request of a Borrower in an amount not to
exceed the unused portion of the applicable Revolving Facility.
"LETTER OF CREDIT FEE" means a monthly fee based on the Applicable Margin for
Letter of Credit Fees and equivalent to annual returns on each Lender's
Participation in the average daily balance of the face amount of Letters of
Credit outstanding on or after the Effective Date and as set forth in the
definition of Applicable Margin.
"LIBOR" means, with respect to any Libor Interest Period, the interest rate per
annum appearing on Telerate Page 3750, or if such Telerate Page shall not be
available, any successor or similar services as may be selected by the Canadian
Agent) for a period equal to the number of days in the applicable Libor Interest
Period for deposits in U.S. Dollars of amounts comparable to the principal
amount of such Libor Loan to be outstanding during such Libor Interest Period,
at or about 11:00 a.m. (London, England time) on the date which is two (2)
Business Days prior to the first day of the proposed Libor Interest Period. If
neither the Telerate Page nor any successor or similar service is available,
"Libor" shall mean, with respect to any Libor Interest Period, the rate
determined by the Canadian Agent or the U.S. Agent as applicable, based on a
360-day year, rounded upwards, if necessary, to the nearest whole multiple of
one-sixteenth of one percent (0.0625%), at which the Canadian Agent, in
accordance with its normal practice, would be prepared to offer to leading banks
in the London inter-bank market for delivery by the Canadian Agent on the first
day of the applicable Libor Interest Period for a period equal to the number of
days in such Libor Interest Period, deposits in U.S. Dollars of amounts
comparable to the principal amount of such Libor Loans to be outstanding during
such Libor Interest Period, at or about 11:00 a.m. (London, England time) on the
date which is two (2) Business Days prior to the first day of the proposed Libor
Interest Period for such Libor Loan.
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"LIBOR DETERMINATION DATE" means any date on which the Canadian Agent or the
U.S. Agent, as the case may be, determines LIBOR for a Libor Interest Period.
"LIBOR INTEREST PERIOD" means with respect to any Borrowing by way of a Libor
Loan, the period of 30, 60, 90 or 180 days (as selected by the Canadian Borrower
and notified to the Canadian Agent or selected by a U.S. Borrower and notified
to the U.S. Agent, as the case may be, pursuant to Section 4.5 and subject to
availability) commencing with the applicable Drawdown Date.
"LIBOR LOAN" means a Loan made available by the U.S. Lenders to a U.S. Borrower
or by the Canadian Lenders to the Canadian Borrower, as the case may be,
outstanding from time to time and denominated in U.S. Dollars and on which
interest is to be paid in accordance with Section 4.1.
"LIBOR MARGIN" means in respect of a Libor Loan or portion thereof outstanding
on or after the Effective Date, the Libor Margin as set forth in the definition
of Applicable Margin.
"LIEN" means with respect to the property or assets of any Person, a mortgage,
pledge, hypothecation, encumbrance, lien (statutory or other), charge or other
security interest of any kind in or with respect to such property or assets
(including, without limitation, any conditional sale or other title retention
agreement, and any financing lease under which such Person is lessee having
substantially the same economic effect as any of the foregoing).
"LOANS" means collectively, that portion of any Borrowing outstanding from time
to time by way of Libor Loans, Bankers' Acceptances, Prime Rate Loans, U.S. Base
Rate Loans, U.S. Prime Rate Loans or, as the context may require, all Loans
outstanding at any time. "Loan" means, at any time, any Libor Loan, Prime Loan,
U.S. Base Rate Loan or U.S. Prime Rate Loan, as the case may be.
"MAJORITY LENDERS" means Lenders having at least 66-2/3% of the Total
Commitments or, if the Commitments have terminated, of total Borrowings
outstanding at such time.
"MATERIAL CONTINGENT OBLIGATION" means, in respect of the Canadian Borrower or
its Subsidiaries, a contingent obligation or liability of U.S.$5,000,000 (or the
Equivalent Amount thereof in Cdn.$) or more or which is otherwise required to be
disclosed to securities regulators or exchanges or the public.
"NET INCOME" means, for any Person for any period, the Net Income (loss) after
tax of such Person for such period, determined in accordance with GAAP.
"NET PROCEEDS", in respect of any Bankers' Acceptance, means the amount obtained
by applying the BA Discount Rate to the Principal Amount of such Bankers'
Acceptance in accordance with the formula set out in Schedule "B".
"NON-CONSENTING LENDER" has the meaning ascribed to it in Section 3.11(e).
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"NON-EXTENDING LENDERS CONVERSION DATE" has the meaning ascribed to it in
Section 3.11(e).
"NON-EXTENSION CONVERSION DATE" has the meaning ascribed to it in Section
3.11(d).
"NORMALIZING ADJUSTMENTS" has the meaning attributed to it in the definition of
"Total Debt Consolidated EBITDA Ratio".
"NOTE PURCHASE AGREEMENT" means the Note and Guarantee Agreement dated as of
June 21, 2001 of the Canadian Borrower and FSLP with respect to US$100,000,000
of 8.06% Guaranteed Senior Secured Notes due 2011.
"NSULC" means FirstService Nova Scotia Corp.
"ORIGINAL CREDIT AGREEMENT" has the meaning attributed thereto in the recitals.
"PARTICIPATION" of a Lender means that Lender's pro rata share of the
Commitments as indicated on Schedule "L".
"PERMITTED ENCUMBRANCES" has the meaning ascribed to it in Section 8.2(m).
"PERMITTED LOANS" has the meaning ascribed to it in Section 8.2(j)(ii).
"PERMITTED VTBS" has the meaning ascribed to it in Section 8.2(m).
"PERSON" means any individual, firm, company, corporation, entity, joint
venture, joint-stock company, trust, unincorporated organization, government or
state entity or any association or a partnership (whether or not having separate
legal personality) of two or more of the foregoing.
"PREPAID BANKERS' ACCEPTANCES" has the meaning attributed thereto in Section
7.5 (c).
"PRIME RATE" means, at any time, the greater of (a) the floating annual rate of
interest calculated from time to time by the Canadian Agent as the base rate,
calculated on the basis of a year of 365 days, which the Canadian Agent uses to
determine rates of interest on Canadian Dollar loans to customers in Canada and
designates as its prime rate and (b) the rate expressed as an annual percentage
equal to the sum of (x) 1% per annum and (y) the BA Discount Rate.
"PRIME RATE LOANS" means the Loans, or portion of them, made available by the
Canadian Lenders to the Canadian Borrower outstanding from time to time which
are drawn down in Canadian Dollars and in respect of which interest is payable
in accordance with Section 4.3.
"PRIME RATE MARGIN" means in respect of a Prime Rate Loan or portion thereof
outstanding on or after the Effective Date, the Prime Rate Margin set forth in
the definition of Applicable Margin.
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"PRINCIPAL AMOUNT" means (a) for a Bankers' Acceptance or a Letter of Credit,
the face amount thereof and (b) for a Loan, the principal amount thereof.
"PRIVATE PLACEMENT" means the private placement of U.S.$100,000,000 of debt
described in the Note Purchase Agreement and to be on terms and conditions
acceptable to the Lenders.
"QUARTER" means a fiscal quarter of any Fiscal Year.
"REPAYMENT DATE" means a day, other than the Final Maturity Date, on which a
Borrower repays all or part of a Loan pursuant to Section 2.2.
"REVOLVING FACILITIES" means, collectively, the Canadian Revolving Facility and
the U.S. Revolving Facility.
"SECURED HEDGING AGREEMENTS" means one or more interest rate and/or currency
hedge agreements entered into between the Canadian Borrower and a Canadian
Lender from time to time to a maximum aggregate notional amount of
U.S.$40,000,000 for all Canadian Lenders and between a U.S. Borrower and a U.S.
Lender from time to time to a maximum aggregate notional amount of
U.S.$100,000,000 for all U.S. Lenders.
"SECOND AMENDED AND RESTATED CREDIT AGREEMENT" has the meaning attributed
thereto in the recitals.
"SECURITY" means the security described in Schedule "C".
"SHAREHOLDERS' AGREEMENTS" means the shareholders' agreements described in
Schedule "D".
"SHAREHOLDERS' EQUITY" has the meaning attributed thereto under GAAP.
"STANDBY LETTER OF CREDIT" means a standby letter of credit issued by any
Issuing Bank pursuant to Section 2.11 or a letter of guarantee issued by an
Issuing Bank which is a Canadian Lender.
"SUBSIDIARY" of any Person means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or of others performing similar functions are
directly or indirectly owned or controlled by such Person.
"SWINGLINE FACILITIES" means, collectively, the Canadian Swingline Facility and
the U.S. Swingline.
"TAX" includes all present and future taxes, levies, imposts, stamp taxes,
duties, withholdings and all penalty, interest and other payments on or in
respect thereof.
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"TOTAL CANADIAN COMMITMENTS" means the Cdn.$ Equivalent Amount of US$40,000,000
and includes the Canadian Revolving Facility Commitment and the Canadian
Swingline Commitment.
"TOTAL COMMITMENTS" means the aggregate for all Facilities from time to time of
the Lenders' Commitments from time to time to a maximum aggregate amount of
U.S.$140,000,000.
"TOTAL U.S. COMMITMENTS" means US$100,000,000 and includes the U.S. Revolving
Facility Commitment and the U.S. Swingline Commitment.
"TOTAL DEBT" shall include the obligations under this Agreement, obligations in
respect of the Private Placement, Financial Contract Obligations, guaranteed
obligations, capital leases, vendor-take-back financing, subordinated debt and
any other interest bearing obligations of the Canadian Borrower and its
Subsidiaries on a consolidated basis determined in accordance with GAAP after
deduction of cash-on-hand plus the aggregate of all Cash Amounts.
"TOTAL DEBT/CONSOLIDATED EBITDA RATIO" means, at any time, the quotient obtained
by dividing (a) Total Debt (as numerator) by (b) Consolidated EBITDA (as
denominator), for the purpose of this ratio, calculated on the basis of the
immediately preceding four consecutive Quarters so as to include all Persons
that have become Subsidiaries during the relevant periods in a manner permitted
by the terms of this Agreement, with EBITDA from Acquisition Entities to be
included in the calculations by using the trailing 12 month EBITDA for the
Acquisition Entity or entities and so as to exclude the EBITDA of a former
Subsidiary that ceased being a Subsidiary during the previous four Quarters; In
addition, the Consolidated EBITDA may be adjusted to include a full year impact
of the cost savings in respect of any such Acquisition Entity which are readily
identifiable and can be immediately implemented, such as elimination of salaries
for redundant employees and elimination of various administrative functions
which will, in the reasonable opinion of the Canadian Borrower, become
unnecessary or otherwise performed more cost effectively (such cost savings
being collectively "Normalizing Adjustments"); provided that such adjustments
shall only be made if (i) the Canadian Borrower has provided to the Canadian
Agent details of such Normalizing Adjustments following the completion of the
acquisition of such Acquisition Entity, and (ii) the Canadian Agent has not
provided written notice to the Canadian Borrower within 15 Business Days of the
receipt by the Canadian Agent of such details that the Majority Lenders do not
so consent to the Normalizing Adjustments.
"TRADE LETTER OF CREDIT" means a trade letter of credit or letter of guarantee
acceptable to the Majority Lenders, acting reasonably, issued by an Issuing Bank
pursuant to Section 2.11.
"TRANSFER CERTIFICATE" means a certificate substantially in the form set out in
Schedule "E" signed by a Lender and a Transferee.
"TRANSFEREE" means a Canadian Assignee, a U.S. Assignee or any other transferee
to which a Lender seeks to assign or transfer all or part of such Lender's
rights and obligations hereunder in accordance with Article XIV.
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"TYPE" means, with respect to any Loan, a Prime Rate Loan, an U.S. Base Rate
Loan, a U.S. Prime Rate Loan or a LIBOR Loan and otherwise , with respect to any
Borrowing or portion thereof, Bankers' Acceptances or Letters of Credit.
"U.S. AGENT" means Toronto-Dominion (Texas), Inc. and its successors and
assigns duly appointed in accordance with Section 13.6.
"U.S. ASSIGNEE" has the meaning ascribed to it in Section 14.3(a).
"U.S. BASE RATE" means for any day and with respect to all U.S. Base Rate Loans,
a fluctuating interest rate per annum equal to the greater of the base rate most
recently announced by the Canadian Agent as its base rate for U.S. Dollar loans
in Canada.
"U.S. BASE RATE LOANS" mean Loans, or any portion thereof, made available by the
Canadian Lenders to the Canadian Borrower outstanding from time to time which
are drawdown in U.S. Dollars and in respect of which interest is payable in
accordance with Section 4.2.
"U.S. BASE RATE MARGIN" means, in respect of an U.S. Base Rate Loan, or portion
thereof outstanding on or after the Effective Date, the U.S. Base Rate Margin
described in the definition of Applicable Margin.
"U.S. BORROWERS" means, collectively, FS (USA) and FSLP and each of such U.S.
Borrowers being a "U.S. Borrower".
"U.S. DOLLARS" means the lawful money of the United States of America and "U.S.
$" has a corresponding meaning.
"U.S. FACILITIES" means the U.S. Revolving Facility and the U.S. Swingline
Facility.
"U.S. LENDERS" means the Lenders identified as U.S. Lenders on the execution
pages hereof having a Commitment to lend or when such Commitment shall have
terminated, having Borrowings outstanding to the U.S. Borrower under the U.S.
Facilities.
"U.S. PRIME RATE" means the floating rate of interest per annum publicly
announced from time to time by the U.S. Agent as its prime lending rate. This
rate of interest is determined from time to time by the U.S. Agent as a means of
pricing U.S. Dollar loans to customers in the U.S.
"U.S. PRIME RATE LOAN" means Loans, or any portion thereof, made available by
the U.S. Lenders to the U.S. Borrowers outstanding from time to time which are
drawndown in U.S. Dollars and in respect of which interest is payable in
accordance with Section 4.4.
"U.S. PRIME RATE MARGIN" means in respect of a U.S. Prime Rate Loan, or portion
thereof outstanding on or after the effective date, the U.S. Prime Rate Margin
described in the definition of Applicable Margin.
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"U.S. REVOLVING FACILITY" means Commitments of the U.S. Lenders to make Advances
to the U.S. Borrowers in accordance with Section 2.2(c) and such Advances so
made.
"U.S. REVOLVING FACILITY COMMITMENT" means Commitments of the U.S. Lenders to
make Advances to the U.S. Borrowers up to US$96,000,000; provided that the
aggregate outstanding Borrowings under the U.S. Facilities shall not exceed the
Total U.S. Commitments at any time.
"U.S. SWINGLINE COMMITMENT" means the Commitment of the U.S. Swingline Lender to
make Advances to the U.S. Borrowers up to US$4,000,000 which Commitment
constitutes a subcommitment of the Total U.S. Commitments of Bank One, NA;
provided that the aggregate outstanding Borrowings under the U.S. Facilities
shall not exceed the Total U.S. Commitments at any time.
"U.S. SWINGLINE FACILITY" means Commitments of the U.S. Swingline Lender to make
Advances to the U.S. Borrowers in accordance with Section 2.2(d) and such
Advances so made.
"U.S. SWINGLINE LENDER" means Bank One, NA and its successors and assigns.
"UNDERTAKING TO SECURE" means the Undertaking to be provided by Subsidiaries of
the Canadian Borrower, other than Subsidiaries that are Wholly-Owned
Subsidiaries as of the date of this Agreement, substantially in the form set out
in Schedule "F".
"UNLIMITED GUARANTOR" means each Wholly-Owned Subsidiary which is legally
entitled to give an unlimited guarantee of the obligations of the Borrowers.
"VIOLATION NOTICE" means any notice received by a Borrower or any of its
Subsidiaries from any governmental or regulatory body or agency under any
Environmental Law that such Borrower or any of its Subsidiaries is in
non-compliance with the requirements of any Environmental Law.
"WHOLLY-OWNED SUBSIDIARY" means any corporation or other entity of which 100% of
the securities or other ownership interests are owned directly or indirectly by
a Borrower.
1.2 REFERENCES
Any reference made in this Agreement to:
(a) Any of the "Canadian Agent", the "U.S. Agent", the "Collateral Agent",
the "Lenders" or a "Lender" shall so be construed as to include its or
their respective successors and permitted assigns.
(b) A time of day is, unless otherwise stated, a reference to Toronto time.
(c) Sections, Articles or Schedules is, unless otherwise indicated, to
Sections and Articles of this Agreement and to Schedules to this
Agreement, as the case may be. The
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provisions of each Schedule shall constitute provisions of this
Agreement as though repeated at length herein.
(d) A "month" is a reference to a period starting on one day in a calendar
month to but excluding the numerically corresponding day in the next
calendar month except that, where any such period would otherwise end
on a day other than a Business Day, it shall end on the next Business
Day, unless that day falls in the calendar month succeeding that in
which it would otherwise have ended, in which case it shall end on the
next preceding Business Day in a calendar month or if there is no
numerically corresponding day in the month in which that period ends,
that period shall end on the last Business Day in that later month (and
references to "months" (other than "calendar months") shall be
construed accordingly).
1.3 INTERPRETATION
In this Agreement:
(a) the singular includes the plural and vice-versa;
(b) "in writing" or "written" includes printing, typewriting, or any
electronic means of communication capable of being visibly reproduced
at the point of reception, including telex, telecopy and telegraph and,
as between an Agent and the Lenders (but only when so directed by an
Agent), Reuters screen or equivalent means of communication;
(c) a document, notice, note, xxxx of exchange or other instrument shall be
considered to have been validly signed or executed, if it has been
signed by either an original signature or a facsimile signature or
stamp affixed by an Authorized Signatory, provided that this Agreement,
all collateral documents contemplated hereby, any promissory notes
required by a Lender and the bills of exchange or depository notes to
be deposited pursuant to Section 2.6 shall be considered to be validly
signed or executed only if signed by an original signature of an
Authorized Signatory; and
(d) all calculations of interest under this Agreement are to be made on the
basis of the stated rates set out herein and not on the basis of the
effective yearly rates determined on any basis which gives effect to
the principle of deemed reinvestment.
1.4 HEADINGS AND TABLE OF CONTENTS
The headings, the table of contents, the Articles and the Sections are
inserted for convenience only and are to be ignored in construing this
Agreement.
1.5 ACCOUNTING TERMS
All accounting terms not defined in this Agreement shall be interpreted
in accordance with GAAP unless otherwise expressly indicated. Unless otherwise
indicated, references to
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accounting terms, ratios or financial tests applicable to the Canadian Borrower
hereunder shall be references to such terms, ratios or tests, calculated and
determined on a consolidated basis.
1.6 RECITALS
The recitals to this Agreement form part hereof.
1.7 PRECEDENCE
In the event that any provisions of the Security contradict or are
otherwise incapable of being construed in conjunction with the provisions of
this Agreement, the provisions of this Agreement shall take precedence over
those contained in the Security and, in particular, if any act of a Borrower or
a Guarantor is expressly permitted under this Agreement but is prohibited under
the Security, any such act shall be permitted under this Agreement and shall be
deemed to be permitted under the Security.
ARTICLE II
FACILITIES
2.1 THE CREDIT FACILITIES
(a) Subject to the terms of this Agreement, (i) the Canadian Lenders shall
extend credit to the Canadian Borrower by way of the Canadian Revolving
Facility; (ii) the Canadian Swingline Lender shall extend credit to the
Canadian Borrower by way of the Canadian Swingline, (iii) the U.S.
Lenders shall extend credit to the U.S. Borrowers by way of the U.S.
Revolving Facility; and (iv) the U.S. Swingline Lender shall extend
credit to the U.S. Borrower by way of the U.S. Swingline.
(b) The proceeds of Borrowings shall be used by the Borrowers for the
purposes set out in the recitals to this Agreement, subject to the
terms and conditions of this Agreement.
2.2 NOTICE AND REVOLVING NATURE OF BORROWINGS
(a) The Canadian Borrower may, subject to the terms of this Agreement, upon
giving the Canadian Agent prior written notice:
(i) by not later than 10:00 a.m. on the 3rd Business Day prior to
the Drawdown Date for each Advance which is a Libor Loan;
(ii) by not later than 10:00 a.m. on the 2nd Business Day prior to
the Drawdown Date or Repayment Date or Acceptance Date, as the
case may be, for any Borrowing or Conversion under the
Canadian Revolving Facility (other than a Libor Loan);
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borrow, repay and/or reborrow or convert in accordance with Section 2.3 under
the Canadian Revolving Facility, (A) in respect of Prime Rate Loans in minimum
tranches of Cdn. $300,000, and thereafter in multiples of Cdn. $100,000 and (B)
in respect of U.S. Base Rate Loans in minimum tranches of U.S.$300,000 and
thereafter in multiples of U.S.$100,000, (C) in respect of Bankers' Acceptances
in minimum amounts of Cdn. $1,000,000 and thereafter in multiples of Cdn.
$100,000, (D) in respect of Libor Loans in minimum amounts of U.S. $1,000,000
and thereafter in multiples of U.S. $100,000; provided that repayment of Libor
Loans shall be made on the last day of the applicable Libor Interest Period and
the Canadian Borrower will not be entitled to have more than an aggregate of 8
Loans outstanding by way of Bankers' Acceptances and Libor Loans at any time.
Notwithstanding the provisions of this Section 2.2(a), the Canadian
Agent shall use its best efforts to make Advances by way of Prime Rate Loans
under the Canadian Revolving Facility available to the Canadian Borrower on the
Business Day following the receipt by the Canadian Agent of a Drawdown Notice
for a Prime Loan.
(b)
(i) In order to facilitate the Canadian Borrower's cash management
requirements, the Canadian Swingline Lender in its capacity as
a Lender agrees to make available to the Canadian Borrower the
Canadian Swingline. The Canadian Swingline Facility shall be
used by the Canadian Borrower to fund amounts which would
otherwise be drawn down by the Canadian Borrower by way of
Prime Rate Loans or U.S. Base Rate Loans under the Canadian
Revolving Facility pursuant to Section 2.2(a) but for such
amounts not being, in the case of Prime Rate Loans, in a
minimum principal amount of Cdn.$300,000 and multiples of
Cdn.$100,000 thereafter and in the case of U.S. Base Rate
Loans in a minimum principal amount of U.S.$300,000 and
multiples of U.S.$100,000 thereafter. Notwithstanding any
other provision hereof, drawdowns under the Canadian Swingline
Facility are not subject to any minimum amount. Any Borrowings
under the Canadian Swingline Facility may be drawn down by the
Canadian Borrower without notice to the Canadian Swingline
Lender by way of presentment to the Canadian Swingline Lender
of cheques and other bills of exchange issued by the Canadian
Borrower.
(ii) At any time and from time to time in its discretion, the
Canadian Swingline Lender may notify each of the Canadian
Lenders to provide its Participation in the Canadian Revolving
Facility for Advances made under the Canadian Swingline, and
each Canadian Lender shall thereupon provide to the Canadian
Agent, for the account of the Canadian Swingline Lender, such
Canadian Lender's Participation under the Canadian Revolving
Facility; PROVIDED HOWEVER no such Participation shall cause
any such Canadian Lender to exceed its Commitment for the
Total Canadian Commitments. The amounts so provided by the
Canadian Lenders in respect of the Canadian Swingline Facility
shall be deemed to be Prime Rate Loans or U.S. Base Rate Loans
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denominated in Cdn$ or U.S.$, as the case may be, under the
Canadian Revolving Facility in accordance with the provisions
of this Agreement (and for such purposes any notice provisions
or minimum amounts of such Loans otherwise required under this
Agreement shall be disregarded except for the proviso of this
Section 2.2(ii)). The aggregate of the amounts paid by the
Canadian Lenders to the Canadian Agent in respect of the
Canadian Swingline Facility shall be applied by the Canadian
Swingline Lender to reduce the then outstanding Loans under
the Canadian Swingline.
(iii) Notwithstanding the foregoing (A) the Canadian Swingline
Lender may, at its sole option, put all outstanding Advances
under the Canadian Swingline Facility to the Canadian
Revolving Facility Lenders, (B) in such case, the Canadian
Swingline Lender will not make further Advances under the
Canadian Swingline Facility and the Canadian Swingline
Commitment shall be transferred to the Canadian Revolving
Facility Commitment, and (C) the Canadian Agent will adjust
amounts outstanding under the Canadian Revolving Facility pro
rata to the Total Canadian Commitments.
(iv)
(A) The Canadian Borrower shall pay interest payable on
Advances made under the Canadian Swingline Facility
directly to the Canadian Swingline Lender; and
(B) The Canadian Swingline Lender shall determine the
Prime Rate or the U.S. Base Rate, as the case may be,
for Advances made under the Canadian Swingline.
(c) The U.S. Borrowers may, subject to the terms of this Agreement, upon
giving the U.S. Agent prior written notice:
(i) by not later than 10:00 a.m. on the 3rd Business Day prior to
the Drawdown Date for each Advance which is a Libor Loan;
(ii) by not later than 10:00 a.m. on the 2nd Business Day prior to
the Drawdown Date or Repayment Date, as the case may be, for
any Borrowing or Conversion under the U.S. Revolving Facility
(other than a Libor Loan);
borrow, repay and/or reborrow or convert in accordance with Section 2.3, under
the U.S. Revolving Facility, (A) in respect of U.S. Prime Rate Loans in minimum
tranches of U.S. $300,000 and thereafter in multiples of U.S. $100,000 and (B)
in respect of Libor Loans in minimum tranches of U.S. $1,000,000 and thereafter
in multiples of U.S. $100,000; provided that repayment of Libor Loans shall be
made on the last day of the applicable Libor Interest Period and the U.S.
Borrowers shall not be entitled to have more than an aggregate of 8 Libor Loans
outstanding at any time.
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(d)
(i) In order to facilitate each U.S. Borrower's cash management
requirements, the U.S. Swingline Lender in its capacity as a
U.S. Lender agrees to make available to the U.S. Borrowers the
U.S. Swingline. The U.S. Swingline Facility shall be used by
the U.S. Borrowers to fund amounts which would otherwise be
drawn down by the U.S. Borrowers under the U.S. Revolving
Facility pursuant to Section 2.2(c) but for such amounts not
being, in a minimum principal amount of U.S.$300,000 and
multiples of U.S. $100,000 thereafter. Notwithstanding any
other provision hereof, Drawdowns under the U.S. Swingline
Facility are not subject to any minimum amount. Any Borrowings
under the U.S. Swingline Facility may be drawn down by way of
U.S. Prime Rate Loans by the U.S. Borrowers by providing
notice to the U.S. Swingline Lender before 3:00 p.m. on the
date of the request for drawdown.
(ii) At any time and from time to time in its discretion, the U.S.
Swingline Lender may notify the U.S. Agent that the U.S.
Swingline Lender wishes each of the U.S. Lenders to provide
its Participation in the U.S. Revolving Facility for Advances
made under the U.S. Swingline, in which case the U.S. Agent
shall forthwith notify each of the U.S. Lenders of such
Participation and each U.S. Lender shall thereupon provide to
the U.S. Agent, for the account of the U.S. Swingline Lender,
such U.S. Lender's Participation under the U.S. Revolving
Facility; PROVIDED HOWEVER, no such Participation shall cause
any such U.S. Lender to exceed its Total U.S. Commitment. The
amounts so provided by the U.S. Lenders in respect of the U.S.
Swingline shall be deemed to be U.S. Prime Rate Loans
denominated in U.S.$ under the U.S. Revolving Facility in
accordance with the provisions of this Agreement (and for such
purposes any notice provisions or minimum amounts of such
Loans otherwise required under this Agreement shall be
disregarded except for the proviso to this Section
2.2(d)(ii)). The aggregate of the amounts paid by the U.S.
Lenders to the U.S. Agent in respect of the U.S. Swingline
Facility shall be paid by the U.S. Agent to the U.S. Swingline
Lender and applied by the U.S. Swingline Lender to reduce the
then outstanding Loans under the U.S. Swingline.
(iii) Notwithstanding the foregoing (A) the U.S. Swingline Lender
may, at its sole option, put all outstanding Advances under
the U.S. Swingline Facility to the U.S. Revolving Facility
Lenders, (B) in such case, the U.S. Swingline Lender will not
make further Advances under the U.S. Swingline Facility and
the U.S. Swingline Commitment shall be transferred to the U.S.
Revolving Facility Commitment, and (C) the U.S. Agent will
adjust amounts outstanding under the U.S. Revolving Facility
pro rata to the Total U.S. Commitment.
(iv) The U.S. Borrowers shall pay interest on Advances made under
the U.S. Swingline Facility directly to the U.S. Swingline
Lender; provided, however, that to the extent any such
interest is due to U.S. Prime Rate Loans of U.S.
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Lenders made in accordance with clause (ii) preceding, the
U.S. Swingline Lender shall immediately upon receipt remit
such funds to the U.S. Agent which shall promptly pay such
interest to such U.S. Lenders in accordance with the terms
hereof for payments on U.S. Prime Rate Loans herein.; and
(v) The U.S. Swingline Lender shall determine the U.S. Prime Rate
for Advances made under the U.S. Swingline.
2.3 CONVERSION
A Borrower may, upon giving prior written notice to the Canadian Agent
and/or the U.S. Agent, as the case may be, in accordance with Section 2.2(a) or
(c), as the case may be, containing the information set out in Schedule "G"
effective on any Business Day during the term of this Agreement (a
"Conversion"), convert on the Conversion Date Advances outstanding from one Type
to another Type to the extent such Type is available hereunder, provided that:
(a) a Libor Loan may be converted to another Type only on the last day of
the Libor Interest Period applicable to that Libor Loan;
(b) Borrowings or any portion thereof comprising Bankers' Acceptances may
be converted to another Type only on the applicable B/A Maturity Date;
and
(c) the conditions precedent set out in Section 5.1 have been fulfilled.
The Conversion of any Advances shall not reduce any amount available under the
Total Commitments.
2.4 MAKING BORROWINGS
(a) If the Canadian Borrower gives prior written notice, in the form set
out in Schedule "H", to the Canadian Agent of its intention to draw
down a Borrowing under the Canadian Revolving Facility, including
Bankers' Acceptances, a Prime Rate Loan, a U.S. Base Rate Loan or Libor
Loan or a Conversion in accordance with Section 2.2(a) or 2.3, the
Canadian Agent shall on the same day it receives the notice notify each
Canadian Lender by telephone or in writing of the amount of the Prime
Loan, U.S. Base Rate Loan, Libor Loan or Bankers' Acceptance and such
Canadian Lender's portion thereof, and
(i) each Canadian Lender shall, not later than 12:00 noon. on the
Drawdown Date, make, or procure to be made, its Participation
in such Bankers' Acceptances, Prime Loan, Libor Loan or U.S.
Base Rate Loan, as the case may be, available to the Canadian
Agent in accordance with Article X; and
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(ii) the Canadian Agent shall on the Drawdown Date, make such
Bankers' Acceptances, Prime Loan, Libor Loan or U.S. Base Rate
Loan, as the case may be, available to the Canadian Borrower,
in accordance with Article X.
(b) If a U.S. Borrower gives prior written notice, in the form set out in
Schedule "H", to the U.S. Agent of its intention to draw down a
Borrowing under the U.S. Revolving Facility, including a U.S. Prime
Rate Loan or a Libor Loan, or a Conversion of a U.S. Prime Rate Loan
or a Libor Loan in accordance with Section 2.2(b) or 2.3, the U.S.
Agent shall on the same day it receives the notice notify each U.S.
Lender by telephone or in writing of the amount of the Libor Loan and
such U.S. Lender's portion thereof, and
(i) each U.S. Lender shall, not later than 12:00 noon. on the
Drawdown Date, make, or procure to be made, its Participation
in the U.S. Prime Rate Loan or Libor Loan, as the case may be,
available to the U.S. Agent in accordance with Article X; and
(ii) the U.S. Agent shall, on the Drawdown Date, make such U.S.
Prime Rate Loan or Libor Loan, as the case may be, available
to the U.S. Borrower, in accordance with Article X.
2.5 PARTICIPATION OF EACH LENDER
(a) The Canadian Agent is authorized by the Canadian Borrower and each
Canadian Lender to allocate amongst the Canadian Lenders the Bankers'
Acceptances to be issued and purchased in such manner and amounts as
the Canadian Agent may, in its sole and unfettered discretion consider
necessary and equitable, rounding up or down, so as to ensure that no
Canadian Lender is required to accept and purchase a Bankers'
Acceptance for a fraction of Cdn. $100,000; provided however the
Canadian Agent shall seek to allocate such Bankers' Acceptances in such
amounts and for such terms, over time, as to maintain the
Participations of all such Canadian Lenders in substantially the
relative amounts and percentages set out on Schedule "L". To the
extent, if any, necessary to maintain each such Participation as the
result of the foregoing, the Canadian Agent shall allocate a lesser or
greater amount of other Advances to each Canadian Lender.
(b) At the time of making any Loan, the Canadian Agent or the U.S. Agent,
as the case may be, shall, if appropriate, re-allocate amounts made
available to the Borrowers under any of the Loans to give effect to the
Participation of each Lender, determined immediately prior to the
making of a Loan.
2.6 BANKERS' ACCEPTANCES
(a) Each Banker's Acceptance tendered by the Canadian Borrower for
acceptance by a Canadian Lender under the Canadian Revolving Facility
shall be denominated in Canadian Dollars and be payable in Canada. The
Canadian Borrower acknowledges
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that the Canadian Lenders may require the delivery of drafts which are
in conformity with the rules and procedures of a clearing house (as
that term in defined in the DEPOSITORY BILLS AND NOTES ACT (Canada))
used by the Canadian Lenders for the delivery, transfer and collection
of bankers' acceptances and depository bills.
(b) The Borrower shall provide for each accepted draft at its maturity to
the Canadian Agent either by payment of the full principal amount
thereof or through utilization of the Canadian Revolving Facility in
accordance with this Agreement or through a combination thereof. The
Canadian Borrower may not at any time request that any Bankers'
Acceptance be issued if the face amount of such requested Bankers'
Acceptance together with the aggregate of the other outstanding Loans
under the Canadian Revolving Facility, would exceed the amount
available to be drawdown under the Canadian Revolving Facility at such
time. Any amount owing by the Canadian Borrower in respect of any
Bankers' Acceptance which is not paid or provided for in accordance
with the foregoing shall be deemed to be a Prime Rate Loan owing by the
Canadian Borrower to the Canadian Lenders and shall be subject to all
of the provisions of this Agreement applicable to a Prime Rate Loan.
The Canadian Borrower hereby authorizes the Canadian Lenders to debit
its account by the amount required to pay any such drafts made by it
and accepted as a Bankers' Acceptance hereunder which is not otherwise
paid.
(c) If an Event of Default shall have occurred and shall then be continuing
unremedied not waived by the Lenders (whether or not demand is made),
the Canadian Borrower shall forthwith pay to the Canadian Agent an
amount equal to the Canadian Lender's maximum potential liability under
all such outstanding Bankers' Acceptances. Such amount shall be held by
the Canadian Agent as general and continuing cash collateral for
payment of the indebtedness and liability of the Canadian Borrower to
the Canadian Lenders in respect of such Bankers' Acceptances and any
other obligations to the Canadian Lenders.
(d) To facilitate the acceptance of Bankers' Acceptances hereunder, the
Canadian Borrower hereby authorizes the Canadian Lenders and
irrevocably appoints the Canadian Lenders as its attorney:
(i) to complete and sign on the Canadian Borrower's behalf, either
manually or by facsimile or mechanical signature, the drafts
to create the Bankers' Acceptances (with, in the Canadian
Lender's discretion, the inscription "This is a depository
xxxx subject to the DEPOSITORY BILLS AND NOTES ACT (Canada));
(ii) after the acceptance thereof by the applicable Canadian
Lender, to endorse on the Canadian Borrower's behalf, either
manually or by facsimile or mechanical signature, such
Bankers' Acceptances in favour of the applicable purchaser or
endorsee thereof including, in the Canadian Lender's
discretion, the Canadian Lender or a clearing house (as
defined by the DEPOSITORY BILLS AND NOTES ACT (Canada));
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(iii) to deliver such Bankers' Acceptances to such purchaser or to
deposit such Bankers' Acceptances with such clearing house;
and
(iv) to comply with the procedures and requirements established
from time to time by the Canadian Lenders or such clearing
house in respect of the delivery, transfer and collection of
bankers' acceptances and depository bills.
All Bankers' Acceptances so completed, signed, endorsed, delivered or deposited
by a Canadian Lender on behalf of the Canadian Borrower shall be binding upon
the Canadian Borrower as if completed, signed, endorsed, delivered or deposited
by it. The records of the Canadian Lenders and such clearing house shall, in the
absence of manifest error, be conclusively binding on the Canadian Borrower. The
Lenders shall not be liable for any claim arising by reason of any loss or
improper use of such drafts or Bankers' Acceptances except for damages suffered
by the Canadian Borrower caused by the intentional misconduct or gross
negligence of a Canadian Lender.
(e) The Borrowers shall not claim any days of grace for the payment at
maturity of any drafts presented and accepted as Bankers' Acceptances
hereunder.
(f) When the Canadian Borrower wishes to make a Borrowing by way of
Bankers' Acceptances it shall give the Canadian Agent the notice
required pursuant to Section 2.2. Bankers' Acceptances shall have terms
of at least 1 month and not more than 6 months excluding days of grace
(and which shall, in no event, end on a date after the Final Maturity
Date).
(g) On the same day it receives such notice, the Canadian Agent shall
notify by telephone or in writing all the Canadian Lenders of the
details of the proposed issue, specifying, for each Canadian Lender:
(i) the Principal Amount of the Bankers' Acceptances to be
accepted and purchased by such Canadian Lender; and
(ii) the term of such Bankers' Acceptances.
2.7 ACCEPTANCE DATE PROCEDURE
On the Acceptance Date, the following provisions shall apply:
(a) At or about 10:00 a.m. on the Acceptance Date, the Canadian Agent
shall promptly determine the BA Discount Rate.
(b) Forthwith that same day, the Canadian Agent shall advise each
Canadian Lender of:
(i) the BA Discount Rate;
(ii) the amount of the Acceptance Fee applicable to those Bankers'
Acceptances to be accepted by such Canadian Lender on such
Acceptance Date, such
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Canadian Lender being authorized by the Canadian Borrower to
collect such Acceptance Fee out of the Net Proceeds of those
Bankers' Acceptances mentioned in subsection (iii);
(iii) the Net Proceeds of those Bankers' Acceptances to be accepted
and purchased by such Canadian Lender on such Acceptance Date;
and
(iv) the amount obtained (the "Available Proceeds") by subtracting
the Acceptance Fee mentioned in subsection (ii) from the Net
Proceeds mentioned in subsection (iii).
(c) Not later than 12:00 noon that same day, each Canadian Lender shall
make available to the Canadian Agent its Available Proceeds.
(d) That same day, the Canadian Agent shall transfer all such Available
Proceeds so made available to it to the Canadian Borrower in accordance
with Section 10.3 and shall notify the Canadian Borrower on such day
either by telex or telephone (to be confirmed subsequently by letter)
of the details of the issue, substantially in the form set out in
Schedule "I".
2.8 PURCHASE OF BANKERS' ACCEPTANCES
Before giving value to the Canadian Borrower, the Canadian Lenders
shall, on the Acceptance Date, accept the Bankers' Acceptances, by inserting the
appropriate Principal Amount, Acceptance Date and maturity date thereof in
accordance with the Canadian Borrower's notice relating thereto and affixing
their acceptance stamps thereto, and shall purchase same. The Principal Amount
so accepted and purchased by any such Canadian Lender shall not exceed such
Canadian Lender's unutilized Commitment.
2.9 PAYMENT OF BANKERS' ACCEPTANCES
The Bankers' Acceptances shall be payable in accordance with the
following provisions:
(a) The Canadian Borrower shall pay to the Canadian Agent for the account
of the Canadian Lenders an amount equal to the Principal Amount of the
Bankers' Acceptances on their respective B/A Maturity Dates.
(b) In the event the Canadian Borrower fails to notify the Canadian Agent,
in writing, not later than 10:00 a.m. (such notice, if verbal, to be
confirmed to the Canadian Agent in writing later the same day, but not
necessarily by 10:00 a.m.), 2 Business Days prior to any B/A Maturity
Dates of a Bankers' Acceptance, that the Canadian Borrower intends to
pay with its own funds the Principal Amount of the Bankers' Acceptances
due on such B/A Maturity Dates, the Canadian Borrower shall be deemed,
for all purposes, to have given the Canadian Agent notice to convert the
Principal Amount of
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such Bankers' Acceptances into a Prime Loan denominated in Cdn.$ and the
provisions of Section 2.3 shall apply mutatis mutandis save that:
(i) such B/A Maturity Date shall be considered to be the Drawdown
Date of such Prime Loan;
(ii) the proceeds of such Prime Loan shall be used to pay the
Principal Amount of the Bankers' Acceptances due on such B/A
Maturity Date; and
(iii) on such B/A Maturity Date, each Canadian Lender, instead of
making its Participation in such Prime Loan available to the
Canadian Agent, shall first directly apply its Participation
in such Prime Loan in payment of its Participation in the
Principal Amount of the Bankers' Acceptances accepted,
purchased and issued by such Canadian Lender and due on such
B/A Maturity Date.
2.10 SET-OFF AND NETTING
On any Acceptance Date, Drawdown Date or Repayment Date, the Canadian
Agent or the U.S. Agent, as the case may be, shall be entitled to set-off and
net amounts payable on such date by the Canadian Agent or the U.S. Agent, as the
case may be, to a Lender for the account of any Borrower against amounts payable
on such date by such Lender to the Canadian Agent or the U.S. Agent, as the case
may be, in connection with transactions conducted in the same basis of
borrowing, for the account of such Borrower. Similarly, on any Acceptance Date,
Drawdown Date or Repayment Date, each Lender shall be entitled to set-off and to
net amounts payable on such date by such Lender to a Borrower (by payment to the
Canadian Agent or the U.S. Agent, as the case may be), against amounts payable
on such date by such Borrower to such Lender, in accordance with the Canadian
Agent's or the U.S. Agent's, as the case may be, calculations.
2.11 LETTERS OF CREDIT
(a) Subject to the notice provisions of Sections 2.2 and 2.3 and upon the
terms and subject to the conditions hereof, the applicable Issuing Bank
shall, at the request of a Borrower, issue under the applicable
Revolving Facility one or more irrevocable Letters of Credit in such
Issuing Bank's usual form (or such other form as may be required by such
Borrower and is acceptable to the Issuing Bank acting reasonably),
expiring no later than, in the case of Standby Letters of Credit, 365
days from the date of issuance and, in the case of Trade Letters of
Credit, 270 days from the date of issuance and in no case later than 3
Business Days before the Final Maturity Date, provided that the maximum
amount payable under all Letters of Credit shall not, at the time of
issue of each Letter of Credit, exceed U.S.$10,000,000 or the Equivalent
Amount thereof in Canadian Dollars.
(b) In the event that an Issuing Bank is called upon by a beneficiary to
honour a Letter of Credit issued by such Issuing Bank, such Issuing Bank
shall forthwith give notice
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thereof to the applicable Borrower. Unless such Borrower has made other
arrangements with the Issuing Bank with respect to payment to the
Issuing Bank of an amount sufficient to permit the Issuing Bank to
discharge its obligations under the Letter of Credit plus that amount
equal to any and all charges and expenses which the Issuing Bank may pay
or incur relative to such Letter of Credit, any such payment so payable
in Canadian Dollars with respect to the Canadian Revolving Facility
shall be deemed to be a Drawdown of a Prime Rate Loan under the Canadian
Revolving Facility and any amount so payable in U.S. Dollars with
respect to a Letter of Credit issued on behalf of the Canadian Borrower
shall be deemed to be a Drawdown by way of an U.S. Base Rate Loan under
the Canadian Revolving Facility, and any such amount so payable with
respect to a Letter of Credit issued on behalf of a U.S. Borrower shall
be deemed to be a Drawdown by way of an U.S. Prime Rate Loan under the
U.S. Revolving Facility provided that the provisions of Section 2.2
regarding notices shall not apply to such Loans.
(c) Any Issuing Bank shall notify the Canadian Agent or the U.S. Agent, as
the case may be, of each issuance or amendment of any Letter of Credit
on the day upon which such issuance or amendment occurs and the Issuing
Bank shall provide the Canadian Agent or the U.S. Agent, as the case may
be, with monthly reports setting out the face amount of Letters of
Credit outstanding on each day of the preceding month. Each of the
Lenders, other than an Issuing Bank, shall be deemed to have purchased
from such Issuing Bank its Participation of the face amount of each
Letter of Credit issued by such Issuing Bank. Each of the Canadian
Lenders agrees to indemnify the Issuing Bank issuing Letters of Credit
under the Canadian Facilities and each of the U.S. Lenders agrees to
indemnify the Issuing Bank issuing Letters of Credit under the U.S.
Facilities, in each case as to such Lender's Participation of any amount
paid by the Issuing Bank under any Letter of Credit plus that amount
equal to any and all payments, losses, costs, charges and expenses which
such Issuing Bank may pay or incur relative to such Letter of Credit,
except to the extent due to the gross negligence or wilful misconduct of
such Issuing Bank in the issuance or performance of such Letter of
Credit.
(d) The Borrowers shall indemnify the Issuing Banks against any and all
actions, proceedings, costs, damages, expenses, taxes (other than taxes
on overall net income, assets or capital), claims and demands which the
Issuing Banks may incur or sustain by reason of or arising in any way
whatsoever in connection with the opening, establishing or paying of
the amounts payable under Letters of Credit issued at the request of a
Borrower or arising in connection with any amounts payable by any
Issuing Bank or any Lender thereunder.
(e) Each Borrower for which a Letter of Credit has been issued on its
behalf shall pay to the Canadian Agent or U.S. Agent, as the case may
be, for the account of the Canadian Lenders or the U.S. Lenders, as the
case may be, each month that Letters of Credit issued on behalf of such
Borrower are outstanding, the applicable Letter of
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Credit Fee and the applicable Agent shall promptly pay such fees to such
Lenders in accordance with the terms hereof.
(f) Each Borrower for which a Letter of Credit has been issued on its
behalf shall pay to the applicable Issuing Bank, sundry charges and
out-of-pocket expenses payable in respect of Letters of Credit which
the Issuing Bank issues pursuant to a request of such Borrower.
ARTICLE III
REPAYMENT AND ACCOUNTS
3.1 REPAYMENT
The Principal Amount of all Borrowings outstanding under all of the
Facilities shall be repaid in full by the Borrowers on the Final Maturity Date
and the Commitments in respect of such Facilities shall terminate on such date.
3.2 ACCOUNTS KEPT BY THE CANADIAN AGENT
The Canadian Agent shall keep in its books Accounts for the Letters of
Credit, the Prime Rate Loans, U.S. Base Rate Loans, Libor Loans, Bankers'
Acceptances and other amounts payable by the Canadian Borrower under the
Canadian Revolving Facility (including for greater certainty, any Loans made
under the Canadian Swingline Facility which become Loans under the Canadian
Revolving Facility). The Canadian Agent shall make appropriate entries showing,
as debits, the amount of the indebtedness of the Canadian Borrower in respect of
the Letters of Credit, the Prime Rate Loans, U.S. Base Rate Loans, Libor Loans,
and Bankers' Acceptances, as the case may be, the amount of all accrued
interest, and any other amount due to the Canadian Lenders or the Agents
pursuant hereto, according to the respective Participation of each Lender in the
Canadian Revolving Facility, and showing, as credits, each payment or repayment
of principal and interest made in respect of such indebtedness, as well as any
other amount paid to the Canadian Lenders or the Agents pursuant hereto,
according to the respective Participation of each. Such Accounts shall
constitute (in the absence of manifest error) prima facie evidence of their
content against the Canadian Borrower and the Canadian Lenders. The Canadian
Agent shall supply any Canadian Lender and the Canadian Borrower, upon request,
with statements of such Accounts.
3.3 ACCOUNTS KEPT BY THE CANADIAN SWINGLINE LENDER
The Canadian Swingline Lender shall keep in its books Accounts for the
Prime Rate Loans and U.S. Base Rate Loans and other amounts payable by the
Canadian Borrower under the Canadian Swingline. The Canadian Swingline Lender
shall make appropriate entries, showing as debits, the amount of indebtedness of
the Canadian Borrower in respect of the Prime Rate Loans and U.S. Base Rate
Loans, as the case may be, the amount of all accrued interest and any other
amount due to the Canadian Swingline Lender and showing as
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credits, each payment or repayment of principal and interest made in respect of
such indebtedness. Such Accounts shall constitute (in the absence of manifest
error) prima facie evidence of their content against the Canadian Borrower. The
Canadian Swingline Lender shall supply any Canadian Lender or the Canadian
Borrower, upon request, with statements of such Accounts.
3.4 ACCOUNTS KEPT BY THE U.S. SWINGLINE LENDER
The U.S. Swingline Lender shall keep in its books Accounts for U.S.
Prime Rate Loans and other amounts payable by the U.S. Borrower under the U.S.
Swingline. The U.S. Swingline Lender shall make appropriate entries, showing as
debits, the amount of indebtedness of the U.S. Borrower in respect of the U.S.
Prime Rate Loans, the amount of all accrued interest and any other amount due to
the U.S. Swingline Lender and showing as credits, each payment or repayment of
principal and interest made in respect of such indebtedness. Such Accounts shall
constitute (in the absence of manifest error) prima facie evidence of their
content against the U.S. Borrower. The U.S. Swingline Lender shall supply any
U.S. Lender or U.S. Borrower, upon request, with statements of such Accounts.
3.5 ACCOUNTS KEPT BY THE U.S. AGENT
The U.S. Agent shall keep in its books Accounts for the Letters of
Credit, the U.S. Prime Rate Loans and Libor Loans and other amounts payable by
the U.S. Borrowers under the U.S. Revolving Facility (including for greater
certainty, any Loans made under the U.S. Swingline Facility which have become
Loans under the U.S. Revolving Facility). The U.S. Agent shall make appropriate
entries showing, as debits, the amount of the indebtedness of the U.S. Borrowers
in respect of the U.S. Prime Rate Loans and Libor Loans, as the case may be, the
amount of all accrued interest, and any other amount due to the U.S. Lenders or
the Agents pursuant hereto, according to the respective Participation of each
Lender, and showing, as credits, each payment or repayment of principal and
interest made in respect of such indebtedness, as well as any other amount paid
to the U.S. Lenders or the Agents pursuant hereto, according to the respective
Participation of each. Such Accounts shall constitute (in the absence of
manifest error) prima facie evidence of their content against the U.S. Borrowers
and the U.S. Lenders. The U.S. Agent shall supply any U.S. Lender and either
U.S. Borrower, upon request, with statements of such Accounts.
3.6 ACCOUNTS KEPT BY EACH CANADIAN LENDER
Each Canadian Lender shall keep in its books, in respect of its
Participation, accounts for the Letters of Credit, the Prime Rate Loans, U.S.
Base Rate Loans, Libor Loans, Bankers' Acceptances and other amounts payable by
the Canadian Borrower under this Agreement. Each Canadian Lender shall make
appropriate entries showing, as debits, the amount of the indebtedness of the
Canadian Borrower towards it in respect of the Letters of Credit, the Prime Rate
Loans, U.S. Base Rate Loans, Libor Loans, and Bankers' Acceptances, as the case
may be, the amount of all accrued interest and any other amount due to such
Lender pursuant hereto and, as credits, each payment or repayment of principal
and interest made in respect of such indebtedness as well as any other amount
paid to such Lender pursuant
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hereto. These accounts shall constitute (in the absence of manifest error or of
contradictory entries in the Accounts), prima facie evidence of their content
against the Canadian Borrower.
3.7 ACCOUNTS KEPT BY U.S. LENDERS
Each U.S. Lender shall keep in its books, in respect of its
Participation, accounts for the Letters of Credit, U.S. Prime Rate Loans, Libor
Loans, and other amounts payable by the U.S. Borrowers under this Agreement.
Each U.S. Lender shall make appropriate entries showing, as debits, the amount
of the indebtedness of the U.S. Borrower towards it in respect of the Letters of
Credit, U.S. Prime Rate Loans, Libor Loans, as the case may be, the amount of
all accrued interest and any other amount due to such Lender pursuant hereto
and, as credits, each payment or repayment of principal and interest made in
respect of such indebtedness as well as any other amount paid to such Lender
pursuant hereto. These accounts shall constitute (in the absence of manifest
error or of contradictory entries in the Accounts), prima facie evidence of
their content against the U.S. Borrowers.
3.8 PROMISSORY NOTES
At the request of any Lender, each Borrower under the Facilities
applicable to such Lender shall execute and deliver to such Lender a promissory
note substantially in the form attached hereto as Schedule "Q".
3.9 EXCESS RESULTING FROM EXCHANGE RATE CHANGE
Any time that, following one or more fluctuations in the exchange rate
of the Cdn. Dollar against the U.S. Dollar, the sum of:
(a) the Borrowings in Cdn. Dollars under the Canadian Facilities; and
(b) the Equivalent Amount in Canadian Dollars of the Borrowings in
U.S. Dollars under the Canadian Facilities;
exceeds the Total Commitments under the Canadian Facilities then in
effect, the Canadian Borrower shall, within 10 days thereafter, either:
(c) make the necessary payments or repayments to the Canadian Agent or
Canadian Swingline Lender, as the case may be, to reduce such sum to an
amount equal to or less than the Total Commitments under the Canadian
Facilities in effect on the date of such payment or repayment; or
(d) maintain or cause to be maintained with the Canadian Agent deposits of
U.S. Dollars in an amount equal to or greater than the amount by which
such sum exceeds the Total Commitments under the Canadian Facilities in
effect on the date such deposits are provided to the Canadian Agent,
such deposits to be maintained in such form and upon such terms as are
acceptable to the Canadian Agent. Until such time as such
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sum shall no longer exceed the Total Commitments under the Canadian
Facilities, the Canadian Agent shall invest the deposits, in such manner
and form of investment as shall be mutually acceptable to the Canadian
Borrower and the Canadian Agent, and income earned thereon shall be
received by the Canadian Agent for the Canadian Borrower's account and
paid to the Canadian Borrower. Without in any way limiting the foregoing
provisions, the Canadian Agent shall, on each Acceptance Date, Drawdown
Date, Interest Payment Date and B/A Maturity Date make the necessary
exchange rate calculations to determine whether any such excess exists
on such date and, if there is an excess, it shall so notify the Canadian
Borrower.
3.10 CURRENCY
Borrowings and payments in respect thereof are payable in the currency
in which they are denominated.
3.11 EXTENSION OF FINAL MATURITY DATE
(a) June 28, 2002 or, if the Facility is extended as a 364 day facility for
a further 364 days such subsequent extension date, shall in each case
be an "Extension Date". Subject to the terms of this Agreement, not
earlier than 90 days but not later than 60 days prior to the next
pending Extension Date, the Borrowers collectively may request, in
writing to the Canadian Agent and the U.S. Agent, an extension of the
Final Maturity Date for all but not less than all Facilities to a date
which is one year after the Final Maturity Date then in effect (an
"Extension Request").
(b) Upon receipt of an Extension Request, the Canadian Agent shall advise
the Canadian Lenders and the U.S. Agent shall advise the U.S. Lenders
of such Extension Request and each Lender shall advise their respective
Agent within 30 days of receipt thereof whether such Lender consents to
the Extension Request.
(c) Unless the Majority Lenders agree to any Extension Request extending
the facility as a 364 day revolving facility, the Final Maturity Date
shall not be extended by any Lender.
(d) In the event that either the Majority Lenders have not agreed to an
Extension Request or the Borrowers do not provide the Canadian Agent
and the U.S. Agent with an Extension Request as provided in Section
3.11(a), the next pending Extension Date shall become a "Non-Extension
Conversion Date" and the Lenders' Commitments under the Facilities will
convert to two-year reducing non-revolving term facilities in the
principal amounts of the Advances outstanding on the Non-Extension
Conversion Date and the Facilities shall be reduced and/or repaid, as
follows:
(i) on or before the first anniversary of the Non-Extension
Conversion Date in an amount at least equal to 10% of Total
Commitments on the Non-Extension Conversion Date; and
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(ii) on or before the second anniversary of the Non-Extension
Conversion Date, the amount necessary to fully and finally
repay all amounts outstanding to the Lenders and the Lenders'
Commitments with respect to the Facilities shall be cancelled.
(e) If the Majority Lenders have consented to an Extension Request but one
or more Lenders (each a "Non-Consenting Lender") do not consent to the
Extension Request, the Canadian Agent shall so advise the Canadian
Borrower with respect to a Non-Consenting Lender which is a Canadian
Lender, or the U.S. Borrowers with respect to a Non-Consenting Lender
which is a U.S. Lender, as the case may be, and the Lenders consenting
to the Extension Request may (i) elect to have one or more of such
consenting Lenders assume all or a ratable portion of the Commitments of
such Non-Consenting Lender, or (ii) prepay the portion of Facilities
outstanding to Non-Consenting Lenders and accordingly the Commitments of
such Non-Consenting Lenders shall be cancelled or (iii) the Extension
Date shall become a "Non-Extending Lenders Conversion Date", and the
Non-Extending Lenders' Commitments under the Facilities shall convert to
two-year reducing non-revolving term facilities in the principal amount
of the Advances outstanding to the Non-Extending Lenders on the
Non-Extending Lenders Conversion Date and the Non-Extending Lenders'
Commitments shall be reduced and/or repaid as follows:
(i) on or before the first anniversary of the Non-Extending
Lenders Conversion Date, the amount necessary to repay at
least 10% of the Non-Extending Lender's pro rata share of the
principal amount outstanding on the Extension Date; and
(ii) on or before the second anniversary of the Non-Extending
Lenders Conversion Date, the amount necessary to fully repay
all amounts outstanding to the Non-Extending Lenders and the
Non-Extending Lenders Commitments with respect to the
Facilities shall be cancelled.
ARTICLE IV
INTEREST, ACCEPTANCE FEE,
LETTER OF CREDIT FEE AND COMMITMENT FEES
4.1 INTEREST ON LIBOR LOANS
(a) The U.S. Borrowers shall pay, on each applicable Interest Payment Date,
to the U.S. Agent for the account of the U.S. Lenders interest on each
Libor Loan in U.S. Dollars drawn down by the U.S. Borrowers for each
Libor Interest Period at that rate per annum determined by the U.S.
Agent to be equal to the sum of the applicable Libor Margin plus LIBOR.
Each determination by the U.S. Agent of the rate of interest applicable
to a Libor Interest Period shall, in the absence of manifest error, be
final, conclusive and binding upon the U.S. Borrowers and the U.S.
Lenders. Upon determination of the rate of interest applicable on the
Libor Determination Date, the
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U.S. Agent shall notify the U.S. Borrowers and the U.S. Lenders of such
rate. Such interest shall be calculated daily on the basis of the actual
number of days elapsed divided by 360.
(b) The Canadian Borrowers shall pay, on each applicable Interest Payment
Date, to the Canadian Agent for the account of the Canadian Lenders
interest on each Libor Loan in U.S. Dollars drawn down by the Canadian
Borrowers for each Libor Interest Period at that rate per annum
determined by the Canadian Agent to be equal to the sum of the
applicable Libor Margin plus LIBOR. Each determination by the Canadian
Agent of the rate of interest applicable to a Libor Interest Period
shall, in the absence of manifest error, be final, conclusive and
binding upon the Canadian Borrowers and the Canadian Lenders. Upon
determination of the rate of interest applicable on the Libor
Determination Date, the Canadian Agent shall notify the Canadian
Borrowers and the Canadian Lenders of such rate. Such interest shall be
calculated daily on the basis of the actual number of days elapsed
divided by 360.
(c) The yearly rate of interest to which the rate determined in accordance
with the foregoing provisions of this Section 4.1 is equivalent, is the
rate so determined multiplied by the actual number of days in that year
and divided by 360.
4.2 INTEREST ON U.S. BASE RATE LOANS
(a) The Canadian Borrower shall pay to the Canadian Agent for the account
of the Canadian Lenders in U.S. Dollars, interest on each U.S. Base
Rate Loan made under the Canadian Revolving Facility as evidenced by
the Accounts of the Canadian Agent at a rate per annum equal to the sum
of:
(i) the U.S. Base Rate Margin; and
(ii) the U.S. Base Rate.
(b) The Canadian Borrower shall pay to the Canadian Swingline Lender in
U.S. Dollars, interest on each U.S. Base Rate Loan made under the
Canadian Swingline Facility as evidenced by the Accounts of the
Canadian Swingline Lender at a rate per annum equal to the sum of:
(i) the U.S. Base Rate Margin; and
(ii) the U.S. Base Rate.
(c) Each change in the fluctuating rate for U.S. Base Rate Loan will take
place simultaneously with a corresponding change in the U.S. Base Rate.
(d) The yearly rate of interest to which the rate determined in accordance
with the foregoing provisions of this Section 4.2 is equivalent, is the
rate so determined multiplied by the actual number of days in that year
and divided by 360.
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(e) This interest is payable quarterly in arrears on each Interest Payment
Date for the period up to and including the last day of the previous
Quarter and shall be calculated daily on the basis of the number of
days elapsed divided by 360.
4.3 INTEREST ON PRIME RATE LOANS
(a) The Canadian Borrower shall pay the Canadian Agent for the account of
the Canadian Lenders in Canadian Dollars interest on each Prime Loan
made under the Canadian Revolving Facility as evidenced by the Accounts
at a rate per annum equal to the sum of:
(i) the Prime Rate Margin; and
(ii) the Prime Rate.
(b) The Canadian Borrower shall pay to the Canadian Swingline Lender in
Canadian Dollars, interest on each Prime Loan made under the Canadian
Swingline Facility as evidenced by the Accounts of the Canadian
Swingline Lender at a rate per annum equal to the sum of:
(i) the Prime Rate Margin; and
(ii) the Prime Rate.
(c) Each change in the fluctuating interest rate for a Prime Rate Loan will
take place simultaneously with the corresponding change in the Prime
Rate.
(d) This interest is payable quarterly in arrears on each Interest Payment
Date for the period up to and including the last day of the previous
Quarter and shall be calculated daily on the basis of the actual number
of days elapsed in a year of 365 or 366 days, as the case may be.
4.4 INTEREST ON U.S. PRIME RATE LOANS
(a) The U.S. Borrowers shall pay to the U.S. Agent for the account of the
U.S. Lenders in U.S. Dollars, interest on each U.S. Prime Rate Loan as
evidenced by the Accounts at a rate per annum equal to the sum of:
(i) the U.S. Prime Rate Margin; and
(ii) the U.S. Prime Rate.
(b) The U.S. Borrowers shall pay to the U.S. Swingline Lender in U.S.
Dollars interest on each U.S. Prime Rate Loan as evidenced by the
Accounts of the U.S. Swingline Lender at a rate per annum equal to the
sum of:
(i) the U.S. Prime Rate Margin; and
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(ii) the U.S. Prime Rate.
(c) Each change in the fluctuating rate for a U.S. Prime Rate Loan will
take place simultaneously with a corresponding change in the U.S. Prime
Rate.
(d) The yearly rate of interest to which the rate determined in accordance
with the foregoing provisions of this Section 4.4 is equivalent, is the
rate so determined multiplied by the actual number of days in that year
and divided by 360.
(e) This interest is payable quarterly in arrears on each Interest Payment
Date for the period up to and including the last day of the previous
Quarter and shall be calculated daily on the basis of the number of
days elapsed divided by 360.
4.5 LIBOR INTEREST PERIODS
If a U.S. Borrower or the Canadian Borrower is borrowing by way of a
Libor Loan or if a U.S. Borrower or the Canadian Borrower elects to convert into
a Libor Loan pursuant to Section 2.3, the applicable Borrower shall, prior to
the expiration or beginning of each Libor Interest Period , select and notify
the Canadian Agent and/or the U.S. Agent, as the case may be, at least 3
Business Days prior to:
(a) the last day of the current Libor Interest Period for such Libor Loan;
(b) the Conversion Date, as the case may be, of the next or new, as the
case may be, Libor Interest Period applicable to such Libor Loan, which
new Libor Interest Period, as applicable, shall commence on and include
the day following the expiration of the prior Libor Interest Period. If
a Borrower fails to select and to notify the Canadian Agent or the U.S.
Agent, as the case may be, of the Libor Interest Period applicable to a
Libor Loan, such Borrower shall be deemed to have selected a Libor
Interest Period, of one month or 30 days, as the case may be.
In any event, no Libor Interest Period shall end on a date falling after the
Final Maturity Date. The Borrowers shall ensure, when selecting a Libor Interest
Period, that no Libor Loan shall be required to be prepaid in order for the
Borrowers to perform their obligations under Section 3.1.
4.6 INTEREST ON OVERDUE AMOUNTS
The Canadian Borrower shall pay to the Canadian Agent for the account
of the Canadian Lenders and the U.S. Borrowers shall pay to the U.S. Agent for
the account of the U.S. Lenders, on demand, interest on all overdue payments in
connection with this Agreement, at a rate per annum which is equal to 2% per
annum in excess of (a) the applicable rates of interest (inclusive of Libor
Margin) payable under Section 4.1 in the case of payments of principal or
interest on Libor Loans or (b) the applicable rates of interest (inclusive of
Prime Rate Margin, U.S. Base Rate Margin or U.S. Prime Rate Margin) payable
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under Sections 4.2, 4.3 or 4.4 in the case of any other payments in Cdn.$ or
U.S.$, as applicable.
4.7 ACCEPTANCE FEE
An Acceptance Fee shall be:
(a) payable by the Canadian Borrower to the Canadian Agent for distribution
to the Canadian Lenders on the Acceptance Date for each Bankers'
Acceptance issued; and
(b) calculated on the Principal Amount of each Bankers' Acceptance for the
number of days in the term of such Bankers' Acceptance and based on a
year of 365 days.
4.8 COMMITMENT FEES
(a) From and including the date hereof to and including the Final Maturity
Date,
(i) the Canadian Borrower shall pay to the Canadian Agent, for the
account of the Canadian Lenders to be allocated among and paid
to such Lenders pro rata in accordance with such Lenders'
respective Commitments, the commitment fees described in the
definition of Applicable Margin on the daily average
unutilized portion of the Commitments in respect of the
Canadian Revolving Facility for each Quarter;
(ii) the U.S. Borrowers shall pay to the U.S. Agent, for the
account of the U.S. Lenders to be allocated among and paid to
such Lenders pro rata in accordance with such Lenders'
respective Commitments, the commitment fees described in the
definition of Applicable Margin on the daily average
unutilized portion of the Commitments in respect of the U.S.
Revolving Facility for each Quarter;
(iii) the Canadian Borrower shall pay to the Canadian Swingline
Lender, the commitment fees described in the definition of
Applicable Margin on the daily average unused portion of the
Commitments in respect of the Canadian Swingline Facility for
each Quarter; and
(iv) the U.S. Borrowers shall pay to the U.S. Swingline Lender, the
commitment fees described in the definition of Applicable
Margin or the daily average unutilized portion of the
commitments in respect of the U.S. Swingline Facility for each
Quarter.
4.9 LETTER OF CREDIT FRONTING FEE
The Canadian Borrower or a U.S. Borrower, as the case may be shall pay
to the Issuing Bank for its own account issuing a Letter of Credit on behalf of
such Borrower, a letter of credit fronting fee of .125% of the Principal Amount
of such Letter of Credit.
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4.10 EFFECTIVE DATE FOR CHANGES IN APPLICABLE MARGINS
(a) Applicable Margins will be adjusted effective as of the first day of
the month following the date that the Canadian Borrower is required to
deliver financial statements in accordance with Section 8.2(i).
(b) In the event that the Borrower fails to deliver its financial
statements when required in accordance with Section 8.2(i), Applicable
Margins shall be adjusted to highest margins applicable until the first
day of the month following the delivery of financial statements of the
Canadian Borrower providing the information confirming that an
adjustment to the Applicable Margins has come into effect or that no
adjustment to the Applicable Margins has come into effect, as the case
may be.
(c) Notwithstanding any other provision of this Agreement, in the event
that the Borrowers are entitled to a downward adjustment to the rates
applicable to any Borrowings outstanding by way of Bankers'
Acceptances, Letters of Credit, and/or LIBOR Loans such rates shall not
be adjusted downward prior to:
(i) in the case of Bankers' Acceptances, the applicable B/A
Maturity Date;
(ii) in the case of Letters of Credit, the applicable expiry date;
and
(iii) in the case of Libor Loans, the end of the applicable
Libor Interest Period.
ARTICLE V
CONDITIONS PRECEDENT
5.1 CONDITIONS PRECEDENT
The Lenders' and Issuing Banks' obligations to make available any
Borrowings under the Facilities on any Drawdown Date or Acceptance Date (other
than in respect of a Conversion pursuant to Section 2.3) or date of issuance of
a Letter of Credit is subject to and conditional upon the satisfaction of each
of the following conditions:
(a) On each Drawdown Date, Acceptance Date or date of issuance of a
Letter of Credit:
(i) the Canadian Agent and the U.S. Agent, as the case may be,
shall have received a notice of the requested Borrowing or
Conversion in accordance with Section 2.2 or 2.3, as
applicable, and with respect to Letters of Credit, the Issuing
Bank shall have received an application therefor and any other
documents it may require, all in form and substance
satisfactory to such Issuing Bank;
(ii) there shall exist no Event of Default and no condition, event
or act which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default; and
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(iii) the representations and warranties set out in Section 8.1
would, if made on such date, be true and accurate in all
material respects on each such Drawdown Date or Acceptance
Date or date of issuance of a Letter of Credit;
(b) on or before the Initial Drawdown Date, Acceptance Date or date of
issuance of a Letter of Credit, the Canadian Agent has received, in
sufficient quantities to provide 1 copy to each Lender, in form and
substance satisfactory to the Collateral Agent and Lenders' Counsel and
in the case of clause (iv) of this paragraph (b), in form and substance
satisfactory to the U.S. Lender referred to therein:
(i) this Agreement duly executed by the Borrowers, the Unlimited
Guarantors, the Lenders, the Canadian Agent, the U.S. Agent
and the Collateral Agent;
(ii) certified copies of the articles and certificate of
incorporation of each of the Borrowers and the Unlimited
Guarantors, their respective borrowing by-laws, if any, and
resolutions of their respective boards of directors
authorizing the execution, delivery and performance of this
Agreement and the Security by them respectively;
(iii) the certificate (without personal liability) of the president,
the chief financial officer or treasurer of each of the
Borrowers and the Unlimited Guarantor confirming, in all
material respects, the veracity of the representations and
warranties set out in Section 8.1, substantially as set out in
Schedule "J" supplemented by all such certificates as Lenders'
Counsel may require;
(iv) promissory note(s) requested by a U.S. Lender;
(v) incumbency certificates setting forth the signatures and
titles of Authorized Signatories for each Borrower, certifying
their authority to sign this Agreement and any documents
contemplated hereby or provided in connection herewith;
(vi) the Canadian Agent shall have received the opinions in form
and substance satisfactory to the Canadian Agent, the Lenders
and the Lenders' Counsel of each of Borrowers' Canadian
Counsel, Borrowers' U.S. Counsel, each addressed to the
Canadian Agent, the U.S. Agent, the Collateral Agent, the
Lenders and Lenders' Counsel;
(vii) the Canadian Agent shall have received opinions of Lenders'
Counsel addressed to the Canadian Agent, the U.S. Agent, the
Collateral Agent and Lenders in form and substance
satisfactory to the Collateral Agent, the Lenders and Lenders'
Counsel;
(viii) all registrations and filings and amendments to registrations
and filings in respect of the Security shall have been made to
the satisfaction of Lenders'
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Counsel in such jurisdictions as Lenders' Counsel shall
determine to be necessary or appropriate;
(ix) there shall not have occurred any event, act or thing which
would have a material adverse effect on the business,
operations or properties of the Borrowers or any Guarantor or
the rights and Security of the Lenders or on the ability of
any Borrower or any Guarantor to perform all its obligations
under this Agreement or any Security;
(x) the Canadian Agent shall have received and be satisfied with
the insurance policies of the Borrowers and the Guarantors and
the terms and extent of coverage thereunder (such policies to
include, without limitation, the standard mortgagee clause);
(xi) the Lenders shall have received and be satisfied with a list
disclosing all of the Canadian Borrowers' Subsidiaries in
existence on the initial Acceptance Date or Drawdown Date or
date of issuance of a Letter of Credit, and shall have
completed and be satisfied with the results of their due
diligence review of the Borrowers, Guarantors and the other
Subsidiaries, including review of audited and unaudited
intercompany debt arrangements, the Shareholders' Agreements,
call options, non-competition agreements with key management
personnel, compliance with environmental regulations, leases
and outstanding material litigation;
(xii) the Collateral Agent, the Lenders, the Borrowers, the lenders
under the Private Placement and the collateral agent to the
lenders under the Private Placement shall have entered in the
Intercreditor Agreement;
(xiii) the Agents, the Lenders and Lenders' Counsel will have
reviewed and shall be satisfied with the terms of the Note
Purchase Agreement and all other material agreements related
to the Private Placement;
(xiv) the Collateral Agent, the Canadian Agent, the U.S. Agent, the
Lenders and Lenders' Counsel shall have received payment of
all fees or other amounts then due and payable to them in
connection with this Agreement; and
(xv) the Canadian Agent shall have received a list disclosing, in
sufficient detail, all Material Contingent Obligations of the
Borrowers and any of their Subsidiaries.
5.2 CONDITIONS PRECEDENT TO BORROWINGS TO MAKE ACQUISITIONS
The Lenders' obligations to make available any Borrowings for
acquisitions on any Drawdown Date or Acceptance Date are subject to and
conditional upon the satisfaction of each of the following conditions (in
addition to the conditions set out in Section 5.1):
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(a) at least 5 Business Days prior to such Drawdown Date or Acceptance Date
the Canadian Agent or the U.S. Agent, as the case may be, shall have
received:
(i) a certificate from the Canadian Borrower's president, chief
financial officer or treasurer, substantially as in Schedule
"N", to the following effect:
(A) the proposed Borrowing shall be used to assist a
Borrower in financing the acquisition of an Eligible
Business;
(B) in the opinion of the Canadian Borrower or, where the
Canadian Borrower has identified the existence of
potentially Hazardous Materials, a third party
environmental consultant engaged by the Canadian
Borrower of experience and reputation reasonably
satisfactory to such Agent certifying that such
Eligible Business has been and can continue to be
conducted in compliance with any applicable
Environmental Laws and that no material adverse
change in the earnings of the applicable Acquisition
Entity or the Canadian Borrower shall result
therefrom; and
(C) that no Event of Default or event which with notice
or the passage of time or both will become an Event
of Default or will occur as a consequence of such
acquisition.
5.3 WAIVER
The terms and conditions of Sections 5.1 and 5.2 are inserted for the
sole benefit of the Lenders. The terms and conditions of Section 5.1 or 5.2 in
whole or in part may be waived only with the prior written agreement of all
Lenders and with or without terms or conditions in respect of any Borrowing,
without prejudicing the Lenders' rights to assert them in whole or in part in
respect of any other Borrowing.
5.4 HOSTILE TAKEOVER
Notwithstanding any other provision of this Agreement, if any portion
of the Facilities are to be used to fund a hostile takeover, any Lender may
refuse to fund its Participation with respect to such hostile takeover if the
Lender reasonably determines, by providing such funding, that it may be placed
in a conflict of interest.
ARTICLE VI
PREPAYMENT, CANCELLATION, MANDATORY
APPLICATION OF CASH PROCEEDS
6.1 PREPAYMENT AND CANCELLATION
(a) The Borrowers may at any time prepay, in whole or in part, Borrowings
outstanding under the Facilities and thereby reduce or cancel, as the
case may be, corresponding
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Commitments by the amount of such prepayment upon giving the Canadian
Agent and/or the U.S. Agent, as the case may be, at least 3 Business
Days' prior written notice, in the case of the Canadian Facilities, in
minimum amounts of Cdn.$10,000,000 and multiples of Cdn. $1,000,000
thereafter (or the Equivalent Amount thereof in U.S.$) and in the case
of the U.S. Facilities, in minimum amounts of U.S. $10,000,000 and
multiples of U.S. $1,000,000 thereafter. Any such prepayment of
Borrowings outstanding under the Facilities shall be applied against
reductions of Commitments and related repayment instalments required to
be made under Section 3.11 in inverse order of maturity
For greater certainty repayments made under a Revolving Facility or a Swingline
Facility pursuant to Section 2.2 do not constitute prepayments under this
Section 6.1.
(b) The Borrowers may, at any time, reduce or cancel any unused portion of
the Commitments, provided that to the extent any such reduction shall
cause any Borrowings outstanding to exceed the Commitments so reduced
or cancelled such Borrowers shall prepay any such excess in accordance
with paragraph (a) above.
(c) Any prepayment and reduction or cancellation relating to Bankers'
Acceptances, or Libor Loans shall be made subject to the Borrowers'
obligations under Section 7.4.
(d) Any such prepayment and reduction shall reduce the Commitments of the
Lenders pro rata according to their respective Participations.
6.2 NOTICE
Each notice of prepayment and reduction or cancellation given pursuant
to this Article shall be irrevocable, and shall specify the date upon which such
prepayment and reduction or cancellation is to be made. A Borrower may not
thereafter give a notice of prepayment and reduction or cancellation of such
part of the Facilities for a date other than the date so specified in any
previous such notice.
6.3 STATUS OF LENDER
If, at any time:
(a) the Commitment of any Lender is, in accordance with the terms of this
Agreement, permanently reduced to zero;
(b) all indebtedness owed to such Lender by the Borrowers hereunder or in
connection herewith has been finally and indefeasibly satisfied in
full; and
(c) such Lender is under no further actual or contingent obligation
hereunder;
then such Lender shall cease to be a party hereto and a Lender for the purposes
hereof; provided however that all indemnities and provisions of this Agreement
for the benefit of such Lender shall survive termination for the benefit of such
Lender.
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6.4 FEES
Upon cancellation of the Facilities in accordance with this Article VI,
all accrued and unpaid fees for the Facilities as provided shall be paid in full
on and to such cancellation date.
6.5 MANDATORY APPLICATION OF CASH PROCEEDS
Each Borrower shall apply 100% of the net cash proceeds which are
derived from the sale or disposition of assets by it or any of its Subsidiaries,
other than in the ordinary course of business, towards repayment of the
Principal Amount of Borrowings outstanding from time to time under the
Facilities, except to the extent that such net proceeds are reinvested within 6
months of receipt thereof (unless such time period is extended with the prior
written consent of the Majority Lenders), in the businesses of the Borrowers and
their Subsidiaries and except to the extent that such net proceeds are less than
Cdn.$5,000,000 in the aggregate. Any such prepayment shall not constitute a
reduction of availability under the Facilities until such time as the Facilities
have been converted to non-revolving term facilities in accordance with Section
3.11 in which case any prepayments shall constitute a permanent reduction of the
Facilities.
ARTICLE VII
SPECIAL LIBOR AND INCREASED COST PROVISIONS
7.1 SUBSTITUTE RATE OF BORROWING
If, on any Libor Determination Date during the term of this Agreement,
any Lender reasonably determines (which determination is final, conclusive and
binding upon the Borrowers and the Lenders) and advises the Canadian Agent or
the U.S. Agent, as the case may be, that:
(a) adequate and fair means do not exist for ascertaining the rate of
interest on a Libor Loan,
(b) the making or the continuing of a loan bearing interest substantially
similar to a Libor Loan by such Lender has become impracticable by
reason of circumstances which materially and adversely affect, in the
case of a Libor Loan, the London interbank market, or
(c) deposits in U.S. Dollars are not available to such Lender, in the case
of a Libor Loan, in the London interbank market, in sufficient amounts
in the ordinary course of business for the applicable Libor Interest
Period to make, fund or maintain a loan bearing interest substantially
similar to a Libor Loan during such Libor Interest Period,
then, the Canadian Agent or the U.S. Agent, as the case may be, shall promptly
notify the applicable Borrower in writing and such Borrower shall (if so
notified), promptly and, in any
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event, no later than by close of business on the day it receives such
notification, advise such Agent of the Type into which the Borrower wishes to
convert such Libor Loan. Should a Borrower fail to advise such Agent, the
Borrower shall be deemed to have given such Agent notice to convert (a) any such
Libor Loan to the Canadian Borrower denominated in U.S.$, into an U.S. Base Rate
Loan, and any such Libor Loan will be deemed to be an U.S. Base Rate Loan for
all purposes under this Agreement, and (b) any such Libor Loan to a U.S.
Borrower, into an U.S. Prime Rate Loan, and any such Libor Loan will be deemed
to be an U.S. Prime Rate Loan for all purposes under this Agreement.
With a view to returning to the normal operation of the Facilities, the
Canadian Agent or the U.S. Agent, as the case may be, shall, after having
consulted with the applicable Borrowers and the Lenders, examine the situation
at least weekly to determine if the circumstances described in Section 7.1 (a),
(b) or (c) still prevail.
7.2 INCREASED COST
If the introduction of, or any change in, applicable law, regulation,
treaty or official directive or regulatory requirement now or hereafter in
effect (whether or not having the force of law) or in the interpretation or
application thereof by any court or by any judicial or governmental authority
charged with the interpretation or administration thereof, or if compliance by a
Lender with any request from any central bank or other fiscal, monetary or other
regulatory authority (other than a change in the relative credit rating or
borrowing ability of a Lender) (whether or not having the force of law):
(a) subjects any Lender to any Tax, or changes the basis of taxation of
payments due to such Lender or increases any existing Tax, on payments
of principal, interest or other amounts payable by a Borrower to such
Lender under this Agreement (in each case, except for Taxes on the net
income or capital of such Lender),
(b) imposes, modifies or deems applicable any reserve, special deposit,
regulatory, capital or similar requirement against assets held by or
deposits in or for the account of, or loans bearing interest at a rate
fixed on the basis of the London interbank market rates by, or any
other acquisition of funds for loans bearing interest at a rate fixed
on the basis of the London interbank market rates or any commitments or
authorizations in respect thereof by any Lender or an office of any
Lender, or
(c) imposes on any Lender any other condition with respect to this
Agreement (except for Taxes on the net income or capital of such
Lender),
and the result of Sections 7.2 (a), (b) or (c) is to increase the cost to any
Lender or to reduce the income receivable by such Lender in respect of a Libor
Loan by any amount, the applicable Borrower shall pay to the Canadian Agent or
the U.S. Agent, as the case may be, for the account of any such Lender, that
amount which compensates such Lender for such additional cost or reduction in
income ("Additional Compensation") arising and calculated as and from a date
which shall not be earlier than the 30th day preceding the date the applicable
Borrower receives the notice referred to in the following sentence. Upon any
Lender having
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determined that it is entitled to Additional Compensation, it shall promptly
notify the Canadian Agent or the U.S. Agent, as the case may be, and such Agent
shall promptly notify the applicable Borrower. A certificate by any manager of
such Lender setting forth the amount of the Additional Compensation and the
basis for it shall be submitted by such Lender to such Agent and forwarded by
such Agent, to the applicable Borrower and, absent manifest error, shall be
prima facie evidence of the amount of the Additional Compensation and the
applicable Agent shall debit, from the applicable Borrower's accounts, the
amount stipulated as Additional Compensation in such certificate in accordance
with Section 10.8.
If an Agent notifies a Borrower pursuant to this Section 7.2, such
Borrower shall have the right, upon written irrevocable notice to that effect
delivered to such Agent at least 10 Business Days prior to the end of such Libor
Interest Period, to repay or convert such Lender's Participation in any such
Libor Loan in full, together with payment of accrued interest and the Additional
Compensation to the date of payment, to U.S. Base Rate Loans which do not suffer
the same defect or U.S. Prime Rate Loans, as the case may be, denominated in
U.S.$.
7.3 ILLEGALITY
If the introduction of, or any change in, applicable law, regulation,
treaty or official directive, or regulatory requirement (whether or not having
the force of law) or in the interpretation or application thereof by any court
or by any governmental authority charged with the administration thereof, makes
it unlawful, or prohibited for any Lender to make, to fund or to maintain Libor
Loans, such Lender may, by written notice to the Canadian Agent or the U.S.
Agent, which notice shall be promptly communicated by such Agent to the
applicable Borrower terminate its obligations to make, to fund or to maintain
Libor Loans and the applicable Borrower shall prepay or convert such Lender's
Participation in the Libor Loans forthwith (or at the end of any applicable
Libor Interest Period as such Lender in its discretion agrees) together with
payment of all additional amounts as may be applicable to the date of payment,
to U.S. Base Rate Loans which do not suffer the same defect or U.S. Prime Rate
Loans, as the case may be, denominated in U.S.$.
7.4 INDEMNITY
If a Borrower prepays or converts, whether pursuant to Section 6.1,
7.2, 7.3 or 7.5 or otherwise repays pursuant to Section 6.5, a Libor Loan on a
day other than the last day of an Libor Interest Period, such Borrower shall
indemnify the Lenders for any loss, cost or expense (except that in the case of
prepayment or conversion pursuant to Section 7.3, such loss, cost or expense
shall be restricted to actual costs incurred by the Lenders) incurred in
maintaining or redeploying deposits obtained by the Lenders to fund such Libor
Loan. The provisions of Section 11.1(d) shall apply to such indemnification
mutatis mutandis.
7.5 OTHER INCREASED COSTS OR REDUCTIONS IN RETURN
(a) If, with respect to any accommodation of any kind or nature provided by
the Lenders under this Agreement, whether by way of Bankers' Acceptances
or otherwise (each
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accommodation being in this Section 7.5 referred to as an
"Accommodation") and as a result of the introduction of or any change in
any law, regulation, rule or order or in its interpretation or
administration or by reason of any compliance with any guideline,
request or requirement from any fiscal, monetary or other authority
(other than a change in the relative credit rating or borrowing ability
of a Lender with respect to such Accommodation) (whether or not having
the force of law) which it is customary for a bank or other lending
institutions to comply with in respect of all its loans or facilities of
similar type in Canada or the U.S. as the case may be, in relation to
Facilities made available to the Borrowers:
(i) any Lender incurs a cost (which it would not otherwise have
incurred) or becomes liable to make a payment (calculated with
reference to the Borrowings outstanding under an
Accommodation) with respect to continuing to provide or
maintain an Accommodation (other than Taxes imposed on the net
income or capital of such Lender);
(ii) any reserve, special deposit or similar requirement is imposed
or increased with respect to an Accommodation increasing the
cost thereof to any Lender; or
(iii) any Lender suffers a reduction in its effective return on the
date hereof, on the transactions contemplated under this
Agreement (as determined by such Lender after taking into
account any reduction in the rate of return (before Tax) on
its overall capital arising as a consequence of compliance
with any such guideline, request or requirement as aforesaid);
then the Borrowers shall, subject to the terms and conditions
hereof, pay to such Lender such amount (the "Additional Other
Compensation") as will compensate the Lender for and will
indemnify the Lender against such increase in costs or
reduction of rate of return with respect to the Facilities
(arising and calculated as and from a date which shall not be
earlier than the 30th day preceding the date a Borrower
receives notice from the Canadian Agent or the U.S. Agent, as
the case may be, pursuant to Section 7.5 (b) below).
(b) The Lender shall, forthwith, after incurring a cost as set out in
Section 7.5 (a)(i), suffering an increase in cost as set out in Section
7.5 (a) (ii) or suffering a reduction in its effective return as set out
in Section 7.5 (a) (iii) (each being in this Section referred to as an
"Event") entitling the Lender to the payment of Additional Other
Compensation and the Lender determining to claim such Additional Other
Compensation, shall give notice to the Canadian Agent or the U.S. Agent,
as the case may be, of the Additional Other Compensation claimed with
details of the Event giving rise thereto and the Agent shall promptly
provide a copy of such notice to the applicable Borrower. Such Lender
shall at that time or within 20 days thereafter provide to such Agent a
certificate setting out in reasonable detail a compilation of the
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Additional Other Compensation claimed (and where appropriate the
Lender's reasonable allocation to a Facility of Additional Other
Compensation with respect to the aggregate of such similar facilities
granted by the Lender affected by such Event) or, if the Lender is then
unable to determine the Additional Other Compensation or the method of
compilation thereof, an estimate of such Additional Other Compensation
and/or the method or the basis on which the Lender estimates the
calculation will be made which estimate will be confirmed or adjusted by
the aforesaid certificate. The Agent shall promptly provide a copy of
such certificate to the applicable Borrower. The certificate of the
Lender with respect to the Additional Other Compensation shall, absent
manifest error, constitute prima facie evidence of the amount payable.
The Borrower shall, within 60 days of receipt of such notice from the
Lender, pay to such Agent, for the account of the Lender, the Additional
Other Compensation (or the estimated Additional Other Compensation)
claimed but if the Additional Other Compensation claimed and paid is
greater or lesser than the Additional Other Compensation as finally
determined, the Lender or the Borrower, as the case may be, shall pay to
the other the amount required to adjust the payment to the Additional
Other Compensation required to be paid. The obligation to pay such
Additional Other Compensation for subsequent periods will continue,
subject as herein provided, until the earlier of the termination of the
Accommodation affected by the Event referred to in the notice given by
the Lender to the Agent or the lapse or cessation of the Event giving
rise to the Additional Other Compensation.
(c) Within 120 days of receipt of the above-mentioned notice from the Agent,
the Borrower may notify such Agent that it elects to repay or cancel, as
the case may be, an Accommodation with respect to which Additional Other
Compensation is claimed, or such Lender's Participation therein, and, if
such election to repay or cancel is made, the Borrower shall 45 days
after the giving of the notice of election to repay or cancel to such
Agent (for distribution to the Lenders or to such Lender, as the case
may be) such Accommodation or Participation, as the case may be, pay or
cancel the same, together with payment of accrued interest, if any, and
the Additional Other Compensation (or the estimated Additional Other
Compensation) applicable thereto calculated to the date of such
repayment or cancellation. If any such repayment constitutes a
prepayment of Bankers' Acceptances, the Canadian Borrower shall deposit
with the Canadian Agent (for the benefit of the Canadian Lenders
involved) an amount equal to the face amount of all Bankers' Acceptances
then outstanding which are to be prepaid (the "Prepaid Bankers'
Acceptances"). The Canadian Agent shall, upon maturity of the Prepaid
Bankers' Acceptances, apply the sum so deposited against payment of the
Prepaid Bankers' Acceptances and remit to the Canadian Borrower the
interest earned on the sum deposited.
(d) For greater certainty, the costs referred to in Section 7.5(a) which
may be included in Additional Other Compensation shall not include
costs (i) which have already been factored into the Prime Rate, the
U.S. Base Rate or the U.S. Prime Rate, as the case may be or (ii) which
are attributable to staff time and related administrative costs
incurred in the preparation and submission of compliance reports.
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7.6 ADDITIONAL COST IN RESPECT OF TAX
(a) Each payment to be made by a Borrower or an Unlimited Guarantor
hereunder or in connection herewith to any other party hereto shall be
made free and clear of and without deduction for or on account of Tax
(except for Taxes on the net income or capital of a Lender or Taxes
resulting from such Lender changing its residency for tax purposes)
unless a Borrower or such Unlimited Guarantor is required to make such a
payment subject to the deduction or withholding of Tax, in which case
the sum payable by such Borrower or such Unlimited Guarantor in respect
of which such deduction or withholding is required to be made shall be
increased to the extent necessary to ensure that, after the making of
such deduction or withholding, such other party hereto receives and
retains (free from any liability in respect of any such deduction or
withholding) a net sum equal to the sum which it would have received and
so retained had no such deduction or withholding been made or required
to be made.
(b) If any Lender or any Agent, on behalf of such Lender or on its own
behalf, is required by law to make any payment on account of Tax (except
for Taxes on the overall net income or capital of such Lender or Agent
or Taxes resulting from such Lender or Agent changing its residency for
tax purposes) on or in relation to any sum received or receivable
hereunder by such Lender or such Agent, or any liability in respect of
any such payment is asserted, imposed, levied or assessed against such
Lender or such Agent, the applicable Borrower and the Unlimited
Guarantors, as applicable will, upon demand of such Lender or Agent,
promptly indemnify such Lender or Agent (as the case may be) against
such payment or liability, together with any interest, penalties and
expenses payable or incurred in connection therewith. If a Lender or
Agent has paid over on account of Tax (other than Taxes excepted above)
an amount paid to such Lender or Agent by a Borrower or an Unlimited
Guarantor pursuant to the foregoing indemnification and the amount so
paid over is subsequently refunded to such Lender or Agent, in whole or
in part, such Lender shall promptly remit such amount refunded to such
Borrower or Unlimited Guarantor, as the case may be.
7.7 CLAIMS UNDER SECTION 7.6
A Lender or Agent intending to make a claim pursuant to Section 7.6
shall deliver to the Canadian Agent or the U.S. Agent, as the case may be,
reasonably promptly after becoming aware of the circumstances giving rise to the
claim, a certificate to that effect specifying the event by reason of which it
is entitled to make such claim and setting out in reasonable detail the basis
and computation of such claim. Such Agent shall promptly deliver to the
applicable Borrower a copy of such certificate.
7.8 TAX RECEIPTS
If at any time a Borrower is required by law to make any deduction or
withholding from any sum payable by it hereunder or in connection herewith (or
if thereafter there is any
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change in the rates at which or the manner in which such deductions or
withholdings are calculated) such Borrower shall promptly notify the Canadian
Agent or the U.S. Agent, as the case may be, thereof.
If a Borrower makes any payment hereunder or in connection herewith in
respect of which it is required by law to make any deduction or withholding it
shall pay the full amount to be deducted or withheld to the relevant taxation or
other authority within the time allowed for such payment under applicable law
and shall deliver to such Agent within 30 days after it has made such payment to
the applicable authority:
(a) a receipt issued by such authority; or
(b) other evidence reasonably satisfactory to such Agent evidencing the
payment to such authority of all amounts so required to be deducted or
withheld from such payment.
7.9 INTERNAL REVENUE SERVICE FORMS
(a) Each U.S. Lender and each of their respective successors and assigns,
shall provide each of the U.S. Borrowers (with copies to the U.S.
Agent), with (x) Internal Revenue Service Forms W8ECI or W8BEN or Form
W-9, as appropriate, or any successor Forms prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party which
exempts such Lender from United States withholding tax or certifying
that the income receivable by it pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the
United States or certifying that such Lender is a U.S. Person as defined
by Section 7701(a)(30) of the Code or (y) solely if such Lender is
claiming exemption from United States withholding tax under Section
871(h) or 881(c) of the Code with respect to payments of "portfolio
interest", a Form W-8, or any successor form prescribed by the Internal
Revenue Service, and a certificate representing that such Lender is not
a bank for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of
the U.S. Borrower and is not a controlled foreign corporation related to
a U.S. Borrower (within the meaning of Section 864(d)(4) of the Code).
(b) For any period with respect to which a U.S. Lender has failed to provide
the U.S. Borrower or the U.S. Agent with the appropriate form referred
to in Section 7.9(a) (unless such failure is due to a change in treaty,
law or regulation occurring after the date on which such form originally
was required to be provided), such Lender shall not be entitled to
indemnification under Section 7.6 with respect to Taxes imposed by the
United States; provided that if a Lender, that is otherwise exempt from
or subject to a reduced rate of withholding tax, becomes subject to
Taxes because of its failure to deliver a form required hereunder, the
applicable Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes.
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(c) If a Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section as a result of a change
in law or treaty occurring after such Lender first became a party to
this Agreement, then such Lender will, at the Borrower's request,
change the jurisdiction of its applicable lending office if, in the
judgment of such Lender, such change (i) will eliminate or reduce any
such additional payment which may thereafter accrue and (ii) is not
otherwise disadvantageous to such Lender.
ARTICLE VIII
REPRESENTATIONS, WARRANTIES & COVENANTS
8.1 REPRESENTATIONS AND WARRANTIES
Each Borrower and each Unlimited Guarantor represents and warrants to
each of the Agents and each of the Lenders as of the date of this Agreement, all
of which representations and warranties shall survive the execution and delivery
of this Agreement, that:
(a) each of the Borrowers and the Guarantors which is a corporation is duly
incorporated, validly existing and in good standing in all material
respects as a corporation under the laws of its jurisdiction of
incorporation and has full corporate power, authority and capacity to
own its properties and conduct its business and each of the Borrowers
and the Guarantors which are corporations has the full corporate power,
authority and capacity to execute, deliver and perform its obligations
to be performed under, in the case of each Borrower and each Unlimited
Guarantor which are corporations, this Agreement and under the Security
provided or to be provided by it, and, in the case of each of the other
Guarantors, its guarantee and the Security to be provided by it;
(b) FSLP is a limited partnership, duly organized and existing under the
laws of the State of Delaware and has full power, authority and
capacity to execute, deliver and perform its obligations to be
performed under this Agreement and under the Security provided or to be
provided by it;
(c) all acts, conditions and things required to be done and performed by
each Borrower, or to have occurred prior to the execution, delivery and
performance, in the case of each Borrower and each Unlimited Guarantor
of this Agreement and the Security provided or to be provided by it
and, in the case of each of the other Guarantors, its guarantee and the
Security provided or to be provided by it to constitute it a binding
obligation of such party enforceable against it in accordance with its
terms, have been done and performed, and have occurred in due
compliance with all applicable laws;
(d) the execution, delivery and performance, in the case of each of the
Borrowers and each Unlimited Guarantor of this Agreement, any transfer,
assignment or assignment and assumption agreement and the Security
provided or to be provided by it and, in the case of each of the other
Guarantors, its guarantee, any transfer, assignment or
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assignment and assumption agreement and the Security provided or to be
provided by it has been duly authorized by all necessary corporate and
other action and does not:
(i) violate any provision of law or any provision of the
articles of incorporation or other instrument of formation
of such party, or
(ii) result in a breach of, a default under, or the creation of any
Lien (other than those in favour of the Agents and the
Lenders) on the properties and assets of any Borrower or
Guarantor, as the case may be, under any material agreement or
instrument to which it is a party or by which its properties
and assets may be bound or affected;
(e) this Agreement and any transfer, assignment or assignment and
assumption agreement in the case of the Borrowers and each Unlimited
Guarantor and the Security provided or to be provided by it and, in the
case of each of the other Guarantors, its guarantee, any transfer,
assignment or assignment and assumption agreement and the Security
provided or to be provided by it constitutes, when executed and
delivered, binding, direct obligations of such party, enforceable in
accordance with its terms, subject to:
(i) applicable bankruptcy, insolvency, moratorium, reorganization
and other similar laws affecting creditors' rights generally
and statutes limiting creditors' rights, including the
Personal Property Security Act (Ontario);
(ii) the equitable and statutory powers of the courts of
appropriate jurisdiction to stay proceedings before them, to
stay the execution of judgments and to award costs;
(iii) the discretion of such courts as to the granting of the
remedies of specific performance and injunction; and
(iv) the restriction that Canadian courts can only render
judgments in Canadian currency;
(f) other than as disclosed to the Agents and the Lenders in writing prior
to the date hereof there is no litigation and there are no legal
proceedings pending, or to the best of its knowledge, threatened
against any of the Borrowers or any Guarantor or any Affiliate of a
Borrower or any Guarantor before any court or administrative agency of
any jurisdiction which is likely to affect materially and adversely the
financial condition, assets or operations of a Borrower or any
Guarantor;
(g) no event has occurred which constitutes or which, with the giving of
notice, the lapse of time or both, would constitute a default under or
in respect of any material agreement, undertaking or instrument to
which any of the Borrowers or any Guarantor is a party or to which any
of their respective properties or assets may be
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subject which is likely to affect materially and adversely, the
financial conditions, assets or operations of a Borrower or any
Guarantor;
(h) other than as disclosed to the Agents and the Lenders in writing prior
to the date hereof each of the Borrowers and the Guarantors is not in
violation in any material respect of any term of their respective
incorporating instruments or by-laws, and, to the best of each
Borrower's and each Unlimited Guarantor's knowledge, none of the
Borrowers and the Guarantors is in violation of any material mortgage,
franchise, license, judgment, decree, order, statute, rule or
regulation which is likely to affect materially and adversely the
financial condition, assets or operations of a Borrower or any
Guarantor;
(i) each Borrower and each Guarantor has filed all tax returns which were
required to be filed, paid all Taxes (including interest and penalties)
which are due and payable by such Borrower or such Guarantor and
provided adequate reserves for payment of any Tax the payment of which
is being contested;
(j) each of the Direct Guarantors is a Wholly-Owned Subsidiary of the
Canadian Borrower, FS (USA) is a Wholly-Owned Subsidiary of the
Canadian Borrower and each of the other Guarantors is a Subsidiary of
the Canadian Borrower or a shareholder of a Subsidiary thereof;
(k) Xxx Xxxxxxx owns, directly or indirectly, more voting shares of the
Canadian Borrower than any other shareholder or group of related or
affiliated shareholders of the Canadian Borrower.
(l) there exists no Default or Event of Default;
(m) other than as provided under the applicable incorporating or formation
statute of any Borrower or any Guarantor, none of the Borrowers nor any
Guarantor is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act
or the Investment Company Act of 1940 or to any U.S. or Canadian
federal, state or provincial statute or regulation limiting its ability
to incur indebtedness for money borrowed;
(n) none of the Borrowers nor any Guarantor is by itself, nor is it by
virtue of its being under "common control" with any other Person within
the meaning of Section 414 (b) or (c) of the Internal Revenue Code of
1986 (the "Code"), an "employer" within the meaning of Section 3 (5) of
the Employee Retirement Income Security Act of 1974 of the United
States of America, as amended from time to time ("ERISA"), in respect
of any employee pension benefit plan covered by Title IV of ERISA or
subject to the minimum funding standards under the Code;
(o) no part of the proceeds of the Borrowings will be used for any purpose
that violates the provisions of any of Regulation T, U or X of the
Board of Governors of the Federal Reserve System or any other
regulation of such Board of Governors; none of
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the Borrowers nor any Guarantor is engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System; none of the Borrowers nor any Guarantor owns any such "margin
stock";
(p) since January 31, 2001, to the best of its knowledge, there has been no
material adverse change in the business, operations, properties,
prospects or condition (financial or otherwise) of the Canadian
Borrower or its Subsidiaries;
(q) none of the Borrowers nor any Guarantor has received any notice, or has
any knowledge, that the operations of a Borrower or any Guarantor are
not in compliance in all material respects with all applicable
Environmental Laws;
(r) each Borrower and all its Subsidiaries have valid title to their
respective assets and, without limitation, own or possess or are
licensed or otherwise have the right to use all material licenses,
permits and other governmental approvals and authorizations, patents,
trademarks, service marks, trade names, copyrights, franchises,
authorizations and other rights that are reasonably necessary for the
operations of their respective businesses, without, to the best of the
knowledge of the Borrowers and the Unlimited Guarantors, conflict with
the rights of any other Person with respect thereto; and
(s) there has not been a Call Option Triggering Event.
8.2 COVENANTS
Each Borrower covenants with each of the Agents and with each of the
Lenders that so long as there shall remain any Borrowings or any other
obligations of or affecting any party to this Agreement:
(a) it will pay duly and punctually all sums of money due by it under this
Agreement at the times and places and in the manner provided for herein
and will cause each Guarantor to do likewise under its Guarantee;
(b) subject to Section 8.2(p), it will maintain, and cause each Subsidiary
to maintain, its existence, corporate and otherwise, in good standing;
(c) it will not, without the Majority Lenders' prior written consent (which
consent shall not be unreasonably withheld), sell, transfer or
otherwise dispose of its control, direct or indirect, of any of its
Subsidiaries and it will not, nor will it permit any of its
Subsidiaries to, without the Majority Lenders' prior written consent,
sell, lease, assign, transfer, convey or otherwise dispose of any of
its properties or assets whether now owned or hereafter acquired
(including, without limitation, receivables and leasehold interests,
patents and intellectual property rights) (in each case a
"Disposition") BUT EXCLUDING:
(i) inventory disposed of in the ordinary course of business;
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(ii) dispositions of assets among the Borrowers and their
Subsidiaries;
(iii) proposed Dispositions which would not after giving
effect to such Disposition:
(A) result in a Default or Event of Default occurring and
continuing; and
(B) result in the aggregate book value of all assets that
have been the subject of a Disposition during the
period commencing on the date of the Initial Advance
hereunder and ending on the date of the proposed
Disposition, exceeding 10% of Consolidated Total
Assets as of the end of the immediately preceding
Fiscal Year of the Canadian Borrower, and
(iv) property which is, substantially contemporaneously with the
disposition thereof, replaced by property (of substantially
the same kind or nature) of at least equivalent value.
(d) it will carry on diligently and conduct its business in a proper and
efficient manner so as to preserve and protect its properties, assets
and income in a prudent manner consistent with usual industry practice
and the preservation of its business and assets, and it will cause its
Subsidiaries to do the same in respect of their respective businesses
and assets and, in particular, without limiting the foregoing, it will
not alter its business plan so as to change materially the nature or
scope of business, operations or activities currently carried on by it
or its Subsidiaries or to shift or transfer same from a Borrower or any
such Subsidiaries to other of its Subsidiaries, without obtaining the
prior written consent of the Majority Lenders (which consent shall not
be unreasonably withheld);
(e) it will maintain or cause to be maintained, with responsible and
reputable insurers, insurance with respect to its properties, assets and
business and the respective properties, assets and businesses of its
Subsidiaries against such casualties and contingencies (including public
liability) and in such types and in such amounts and with such
deductibles and other provisions as are customarily maintained or caused
to be maintained by persons engaged in the same or similar businesses in
the same territories under similar conditions; it will ensure that the
Collateral Agent is an additional named loss payee under all policies of
insurance, as its interest may appear, and that such policies are not
cancellable without at least 30 days' prior written notice being given
by the insurers to the Collateral Agent;
(f) it will do, execute, acknowledge and deliver or cause to be done,
executed, acknowledged or delivered all such other acts, agreements,
instruments and assurances in law as the Agents or Lenders' Counsel
shall reasonably require for the better accomplishing and effectuating
of the intentions and provisions of this Agreement and the Security;
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(g) it will do, observe and perform all material matters and things
necessary or expedient to be done, observed or performed under any law
of Canada, the United States of America, any province or state or
municipality thereof or of any other jurisdiction for the purpose of
carrying on and conducting its business and owning and possessing its
properties and assets and, without limitation, it will maintain at all
times in full force and effect all material certificates, permits,
licenses and other approvals required to operate its business and it
will cause its Subsidiaries to do the same in respect of their
respective businesses, properties and assets; for greater certainty and
without in any way limiting the generality of the foregoing:
(i) each Borrower and each Guarantor shall be at all times in
compliance in all material respects with all applicable
Environmental Laws; and
(ii) each Borrower shall ensure that each of the real properties or
premises owned, leased or occupied by it or any of its
Subsidiaries is free from contamination by a release,
discharge or emission of any Hazardous Material;
(h) it will promptly pay or cause to be paid all Taxes levied, assessed or
imposed upon it and/or its Subsidiaries, and/or its properties and
assets or those of its Subsidiaries or any part thereof and/or upon its
income and profits or that of its Subsidiaries, as and when the same
shall become due and payable save when and so long as any such Taxes
are in good faith contested by it or those of its Subsidiaries as may
be affected thereby;
(i) it will furnish to the Canadian Agent in sufficient quantities to
provide 1 copy to each Lender and each Agent:
(i) as soon as available and in any event within 45 days after the
end of each Quarter of each Fiscal Year of the Canadian
Borrower the unaudited consolidated financial statements of
the Canadian Borrower as of the end of such Quarter to be
prepared in accordance with GAAP, accompanied by a
certificate, in the form set out in Schedule "J" attached
(without personal liability) from the president, the chief
financial officer or treasurer of the Canadian Borrower:
(A) confirming that such financial statements have not
been prepared in a manner and do not contain any
statement which is inconsistent with GAAP, subject to
audit and year-end adjustment,
(B) containing sufficient information to permit each
Lender to determine whether the financial covenants
contained in Section 8.2(o) are being maintained,
including any adjustments to Consolidated EBITDA as
the result of Normalizing Adjustments,
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(C) certifying that, as of the last day of such Quarter,
and, to the best knowledge of such officer, as of the
date of such certificate, no Default or Event of
Default has occurred and is continuing,
(D) certifying that no Call Option Triggering Event has
occurred during such Quarter or if a Call Option
Triggering Event has occurred, the name of the
Subsidiary so affected and the amount of outstanding
intercompany debt of such Subsidiary; provided that,
if the Canadian Borrower has a Total Debt to
Consolidated EBITDA Ratio equal to or greater than
3.25 to 1, the Canadian Borrower shall provide the
Canadian Agent with the EBITDA calculation for the
Canadian Borrower and all of its Subsidiaries and the
amount of outstanding inter-company debt of each
Subsidiary;
(E) providing a report on sales or dispositions of assets
in excess of an aggregate of Cdn.$5,000,000 during
such period; and
(F) providing a report on outstanding hedging contracts
entered into by the Canadian Borrower and its
Subsidiaries and the amounts secured under Secured
Hedging Agreements.
(ii) as soon as practicable and in any event within 90 days after
the end of each Fiscal Year of the Canadian Borrower, a copy
of the consolidated financial statements of the Canadian
Borrower as of the end of such Fiscal Year, such financial
statements of the Canadian Borrower to be prepared in
accordance with GAAP, such consolidated financial statements
of the Canadian Borrower to be accompanied by a report thereon
by independent auditors of recognized standing confirming,
without qualification, that such financial statements of the
Canadian Borrower have been prepared in accordance with GAAP
and, copies of such auditors' recommendations, if any,
together with a certificate, in the form set out in Schedule
"J" attached (without personal liability) of the president,
chief financial officer or treasurer of the Canadian Borrower:
(A) containing sufficient information to permit each
Lender to determine whether the financial covenants
contained in Section 8.2(o) are being maintained,
including details of any adjustments to Consolidated
EBITDA as the result of Normalizing Adjustments,
(B) containing the information required to determine
amounts to be paid under Section 6.5,
(C) certifying that as of the last day of such Fiscal
Year, and to the best of the knowledge of such
officer, as of the date of such certificate, no
Default or Event of Default has occurred and is
continuing, and
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(D) certifying that no Call Option Triggering Event has
occurred, or in the event that a Call Option
Triggering Event has occurred, the name of the
Subsidiary so affected and the amount of intercompany
debt of such Subsidiary; provided that, if the
Canadian Borrower has a Total Debt to Consolidated
EBITDA Ratio equal to or greater than 3.25 to 1, the
Canadian Borrower shall provide the Canadian Agent
with the EBITDA calculation for the Canadian Borrower
and all of its Subsidiaries and the amount of
outstanding inter-company debt of each Subsidiary;
(iii) as soon as possible and in any event within 10 Business Days
after any Borrower or any of its Subsidiaries receives (A)
notice of the commencement thereof, notice of any actions or
proceedings against it or any of its Affiliates or against any
of the property of a Borrower or any of its Subsidiaries
before any court, governmental agency or arbitrator, which, if
determined adversely, would have a material adverse effect on
the financial condition or operations of any Borrower or its
Subsidiaries, taken as a whole and (B) a copy of any Violation
Notice received by a Borrower or any of its Subsidiaries;
(iv) within 90 days of the beginning of each Fiscal Year of the
Canadian Borrower, the Canadian Borrower's annual business
plan and financial projections (for each Quarter), including
profit and loss statements, cash-flow statements, balance
sheets and projected capital expenditures for the Fiscal Year
then begun; such business plan and financial projections not
to be prepared in a manner nor contain any statement which is
inconsistent with GAAP;
(v) promptly upon request, such other information concerning the
financial affairs or operations of any Borrower or any of its
Subsidiaries as the Canadian Agent or the U.S. Agent, as the
case may be, may reasonably request from time to time
including for greater certainty financial statements of the
U.S. Borrowers, NSULC, FSLLC and FSLP and if requested by the
Canadian Agent, the EBITDA of each Subsidiary;
(j) it will not, nor will it permit any Subsidiary to, without the Majority
Lenders' prior written consent, make any advances to or for the benefit
of, or guarantee (other than under Permitted VTBS) the indebtedness or
liabilities of, or otherwise become liable for, any Person or any
business or project of any Person save and except:
(i) the endorsement of cheques and other negotiable instruments
for deposit in the ordinary course of business;
(ii) advances and accounts between one or more of a Borrower and
any of its Subsidiaries which shall be on commercially
reasonable terms; provided that such advances and accounts are
secured by means of security agreements in form and substance
satisfactory to the Collateral Agent, are assigned to the
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Collateral Agent and form part of the Security (hereinafter
referred to as "Permitted Loans"); and
(iii) liabilities, indebtedness and obligations which would
otherwise constitute Permitted Encumbrances hereunder but for
the lack of a lien to secure such liabilities, indebtedness
and obligations.
(k) it will permit from time to time to the Canadian Agent and the U.S.
Agent or their representatives or advisers access to its premises,
assets, records and meetings of directors and/or of shareholders upon
reasonable (both as to timing and advance notice) request of such
Agent;
(l) it will give to the Canadian Agent or the U.S. Agent prompt notice of
any Event of Default or any event, of which it is aware, which, with
the giving of notice and/or the lapse of time or both, would constitute
an Event of Default;
(m) it will not, and it will not permit any of its Subsidiaries to, without
the Majority Lenders' prior written consent, incur, create, assume or
permit to exist any Lien on any of its or any of its Subsidiaries'
property or assets, whether owned at the date hereof or hereafter
acquired, except that the following shall be permitted (the "Permitted
Encumbrances"):
(i) Liens incurred and pledges and deposits made in connection
with workers' compensation, unemployment insurance, old-age
pensions and similar legislation (other than ERISA);
(ii) Liens securing the performance of bids, tenders, leases,
contracts (other than for the repayment of borrowed money),
and statutory obligations of like nature, incurred as an
incident to and in the ordinary course of business;
(iii) statutory Liens of landlords, undetermined or inchoate Liens
and other Liens imposed by law, such as carriers',
warehousemens', mechanics', construction and materialmen's
Liens, incurred in good faith in the ordinary course of
business provided that the aggregate amount of any carriers',
warehousemens', mechanics', construction or materialmens'
Liens shall at no time exceed an aggregate amount of
U.S.$1,000,000 or the Equivalent Amount thereof in Cdn.$ and
the amount thereof shall be paid when same shall become due;
(iv) Liens securing the payment of Taxes, assessments and
governmental charges or levies, either (A) not delinquent or
(B) being contested in good faith by appropriate proceedings;
(v) permits, right-of-way, zoning restrictions, easements,
licenses, reservations, restrictions on the use of real
property or minor irregularities or minor title defects
incidental thereto which do not in the aggregate materially
detract from the value of the property or assets of a Borrower
or any of its Subsidiaries or
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materially impair the operation of the business of a Borrower
or any of its Subsidiaries;
(vi) Liens arising out of the leasing of personal property by it or
any of its Subsidiaries in the ordinary course of business up
to an amount not exceeding in the aggregate U.S.$15,000,000
for all Borrowers and their Subsidiaries or the Equivalent
Amount thereof in Cdn.$;
(vii) Liens, subordinate in priority to the Liens created under the
Security, incurred in the ordinary course of business for the
purposes of securing the payment of any purchase price balance
or the refinancing of any purchase price balances not greater
than in the aggregate U.S.$25,000,000 or the Equivalent Amount
in Cdn.$ of any assets (other than current assets) acquired by
a Borrower or any of its Subsidiaries provided that any such
Liens are restricted to the assets so acquired ("Permitted
VTBS");
(viii) reservations, conditions, limitations and exceptions contained
in or implied by statute in the original disposition from the
Crown and grants made by the Crown of interests so reserved or
accepted;
(ix) security given in the ordinary course of business by a
Borrower, or any of its Subsidiaries to a public utility or
any municipality or governmental or public authority in
connection with operations of a Borrower, or any of its
Subsidiaries, (other than in connection with borrowed money)
securing not more than an aggregate amount equal to
U.S.$1,000,000 for all Borrowers and their Subsidiaries or the
Equivalent Amount thereof in Cdn.$;
(x) liens in respect of Permitted Loans;
(xi) liens to secure the obligations under the Private Placement
provided that and for so long as the Intercreditor Agreement
is in full force and effect;
(xii) the Security and any additional or further security granted to
the Collateral Agent and/or the Lenders by a Borrower, a
Guarantor or any future Subsidiary of a Borrower;
(xiii) purchase money security interests placed upon fixed assets to
secure a portion of the purchase price thereof; provided that
any such lien shall not encumber any property of the Canadian
Borrower and/or its Subsidiaries except the purchased asset;
and
(xiv) the encumbrances described on Schedule "P".
(n) it will not:
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(i) if an Event of Default has occurred and is continuing or an
Event of Default will occur as a consequence thereof,
(A) declare dividends, whether in cash or in specie, or
make payments thereof ; or
(B) make or permit any distributions or returns of
capital (whether by retirement, redemption,
repurchase, cancellation or otherwise);
(ii) without the prior written consent of the Majority Lenders,
make or permit any withdrawals or any other payments of money
or equivalents thereof whatsoever (including, without
limitation, royalties, management fees, etc.)(which are not
otherwise expressly permitted by the terms of this Agreement)
by or to the shareholders of the Canadian Borrower, its
Affiliates or any creditors other than the Lenders and it will
cause its Subsidiaries to do likewise save and except for:
(A) payments in respect of Permitted Encumbrances and
payments of trade debt incurred in the ordinary
course of business;
(B) interest dividend payments, distributions and/or
returns of capital made, directly or indirectly to
any Borrower;
(C) normal course distributions to other shareholders of
such Subsidiaries as contemplated in the Canadian
Borrower's annual business plan and within limits
approved by the Majority Lenders annually;
(D) normal course issuer bids of the Canadian Borrower;
(E) payments upon exercise of the put options
under the Shareholders' Agreements;
(F) payments upon exercise of the call options
under the Shareholders' Agreements;
(G) payments on account of retirement, termination,
death or disability, redemptions;
(H) payments on account of Permitted VTBS;
(I) payments required to be made in accordance with the
terms of the Note Purchase Agreement; and
(J) scheduled payments of interest and principal on
account of the Private Placement or prepayments which
a Borrower is entitled to make to holders of notes
under the Note Purchase Agreement as the result of
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such noteholder being subjected to tax obligations
and such Borrower being obligated to reimburse such
noteholder for such tax obligations;
(o) the Canadian Borrower will, at all times, maintain :
(i) a Total Debt/Consolidated EBITDA Ratio of not more than 3.5
to 1;
(ii) on a consolidated and rolling 4 Quarters basis, a Fixed Charge
Coverage Ratio of at least 1.25 to 1;
(iii) on a consolidated and rolling 4 Quarters basis, an Interest
Coverage Ratio of at least 2.5 to 1; and
(iv) Shareholder's Equity of :
(A) 95% of the Shareholders Equity of the Canadian
Borrower on March 31, 2001, being US$75,000,000; plus
(B) fifty percent (50%) of the Canadian Borrower's
consolidated cumulative positive annual net income;
plus
(C) one hundred percent (100%) of the consolidated
cumulative proceeds from (i) any equity offerings
including, without limitation, securities offerings,
and (ii) any form of equity injection.
(p) (i) it will not, without the Majority Lenders' prior written
consent (which shall not be unreasonably withheld) enter into
a merger or consolidation or amalgamation or liquidate,
wind-up or dissolve itself (or suffer any liquidation or
dissolution) except mergers, consolidations or amalgamations
between the Canadian Borrower and its Subsidiaries;
(ii) it will not permit any of its Subsidiaries to, without the
Majority Lenders' prior written consent (which shall not be
unreasonably withheld), enter into a merger or consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution) unless as the result of
such merger, consolidation, amalgamation, liquidation,
winding-up or dissolution,
(A) no Event of Default has occurred and is continuing or
will occur as a consequence thereof; and
(B) the surviving or resulting entity continues to be
bound by the obligations of such predecessor
entity or entities under this Agreement and
under any Security delivered by such predecessor
entity or entities,
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or, except as permitted under Section 8.2(c), convey, sell, lease,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or a substantial part of its or such Subsidiary's
business, properties or assets;
(q) it will not, nor will it permit any of its Subsidiaries to, incur any
other indebtedness (including senior and subordinated debt), loans or
financing of any kind or nature whatsoever (whether in the form of
capital leases or sale-leaseback transactions or otherwise) or incur
any contingent obligations or liabilities (including guarantees) other
than trade payables incurred in the ordinary course of business and
indebtedness or contingent obligations or liabilities secured by
Permitted Encumbrances without obtaining the prior written consent of
the Majority Lenders;
(r) it will not, nor will it permit any of its Subsidiaries to, without
obtaining the prior written consent of the Majority Lenders, other than
in the ordinary course of business:
(i) make any acquisition of any business other than the
acquisition of an Eligible Business, or
(ii) make any investment in, properties, assets, businesses, shares
or Persons; or
(iii) establish, incorporate, otherwise form, charter or create any
new Subsidiary other than in connection with the acquisition
of an Eligible Business;
(s) it will ensure that all Security granted to the Collateral Agent,
and/or the Lenders continues to be perfected and preserve the first
priority thereof (subject to Permitted Encumbrances);
(t) it will not make, or permit the making of, any change or modification
to the call option provisions in the Shareholders' Agreements, without
the prior written consent of the Majority Lenders; and
(u) it will cause any entity which after the date hereof shall become a
Subsidiary of a Borrower (such entity, a "New Subsidiary") to execute
and deliver in favour of the Collateral Agent and the Lenders either (i)
the Direct Security or (ii) an Undertaking to Secure, together with
favourable supporting legal opinions, in either case, as soon as
reasonably practicable after becoming a Subsidiary and no later than (A)
in the case of an Acquisition Entity where the acquisition has been
financed, wholly or partially, by way of Borrowings under the Facility,
on the date of completion of the acquisition, or (B) in any other case
within 10 Business Days following the date of completion of the
acquisition or creation of the New Subsidiary, as the case may be.
For greater certainty, with respect to the covenants contained in this
Section 8.2, the ordinary courses of business of:
(a) FSLP is limited to holding the shares of NSULC;
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(b) NSULC is limited to holding the units of FSLLC;
(c) FSLLC is limited to making loans to Subsidiaries of the Canadian
Borrower and taking security for such loans; and
(d) FS USA is limited to making loans to Subsidiaries of the Canadian
Borrower and taking security for such loans.
ARTICLE IX
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT
Upon the occurrence of any one or more of the following events (an
"Event of Default"):
(a) the non-payment by a Borrower when due, whether by acceleration or
otherwise, of any payment of principal due under the Facilities, or
otherwise hereunder;
(b) the non-payment by a Borrower when due (or within 3 Business Days
thereafter) whether by acceleration or otherwise, of any payment (other
than a payment of principal) due under the Facilities or otherwise
hereunder;
(c) the commencement of proceedings by or against a Borrower, any Guarantor
or any of their Subsidiaries for the dissolution, merger, amalgamation,
liquidation or winding-up of any of a Borrower or any Guarantor or any
of their Subsidiaries or for the suspension of the operations of any of
a Borrower or any Guarantor or any of their Subsidiaries, unless, in
the case of proceedings against a Borrower, any Guarantor or any of
their Subsidiaries, such proceedings are being actively and diligently
contested by the Borrower, or Guarantor or such Subsidiary, as the case
may be, in good faith to the satisfaction of the Majority Lenders;
(d) a Borrower or any Guarantor or any of their Subsidiaries is adjudged or
declared bankrupt or insolvent or makes an assignment for the benefit of
creditors, or petitions or applies to any tribunal for the appointment
of a receiver, custodian or trustee for a Borrower, any Guarantor or any
such Subsidiary or for any substantial part of its property, or
commences any proceedings relating to it under any reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction whether now or hereafter in effect relating
to or governing debtors or such proceedings are commenced against it
(unless, in the case of proceedings commenced against it, such
proceedings are being actively and diligently contested by such
Borrower, such Guarantor or such Subsidiary in good faith to the
satisfaction of the Majority Lenders), or by any act indicates its
consent to, approval of, or acquiescence in, any such proceeding for a
Borrower, any Guarantor or any such Subsidiary or for any substantial
part of its property, or suffers the appointment of any receiver,
custodian or trustee and any such appointment continues undischarged and
in effect
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for a period of 30 days; provided that during such 30 day period such
appointment is being actively and diligently contested by such Borrower
or Guarantor or Subsidiary in good faith to the satisfaction of the
Majority Lenders and in the case of a Borrower such receiver, custodian
or trustee shall not have taken possession of or otherwise enforced its
rights over the property in respect of which it has been appointed;
(e) any material representation or warranty made in this Agreement or any
Security by a Borrower, the Unlimited Guarantor, or any of their
Subsidiaries or any information furnished in writing to an Agent or
Lender by a Borrower, any Guarantor or any such Subsidiary proves to
have been incorrect in any material respect when made or furnished save
that if any such materially incorrect representation or warranty is
capable of being corrected and none of the Agents and the Lenders has
been prejudiced by such materially incorrect representation or warranty,
then the Borrowers shall have 30 days after written notice to do so by
the Collateral Agent to take such action to make the representation or
warranty true and correct at such time, in which case such
representation or warranty shall be deemed to have been true and correct
when originally made or furnished;
(f) a writ, execution or attachment or similar process is issued or levied
against all or a substantial portion of the property of a Borrower, any
Guarantor or any of their Subsidiaries in connection with any judgment
against a Borrower, any Guarantor or any of their Subsidiaries in any
amount which materially affects the assets of a Borrower, any Guarantor
or its Subsidiaries, and such writ, execution, attachment or similar
process is not released, bonded, satisfied, discharged, vacated or
stayed within 30 days after its entry, commencement or levy; provided
that during such 30 day period such process if being actively and
diligently contested by such Borrower or Guarantor or Subsidiary in good
faith to the satisfaction of the Majority Lenders;
(g) the breach or failure by the Borrowers, a Guarantor or any Subsidiary
to perform or observe the covenants contained in Sections 8.2(c),
8.2(n), 8.2(o), 8.2(p) and 8.2(r)(i).
(h) the breach or failure of due performance by a Borrower or any Guarantor
of any covenant or provision of this Agreement, other than those
heretofore dealt with in this Section 9.1, which is not remedied by
such Borrower, or Guarantor within 10 Business Days, after written
notice to do so by the Collateral Agent or any Lender; provided that
such breach or failure is capable of being remedied and during such 10
Business Day period the Borrower or Guarantor is proceeding actively
and diligently in good faith to remedy such breach or failure to the
satisfaction of the Majority Lenders;
(i) demand by any Person (including, without limitation, any Lender) is made
on a Borrower, any Guarantor or any of their Subsidiaries in respect of
indebtedness, in an aggregate amount of US$5,000,000 (or the Equivalent
Amount thereof in Cdn$) payable on demand by such Borrower, such
Guarantor or such Subsidiary and such Borrower, such Guarantor or such
Subsidiary has not, when due and payable, made
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payment of the amount so demanded or contested the validity of such
demand in good faith or a Borrower, any Guarantor or any of their
Subsidiaries is in default under any term or provision of any agreement,
deed, indenture or instrument (other than this Agreement) between such
Borrower, such Guarantor or such Subsidiary as the case may be, and any
Person (including, without limitation, any Lender) shall have
accelerated or shall have the right to accelerate any indebtedness
(including Financial Contract Obligations) in the aggregate amount of
US$5,000,000 (or the Equivalent Amount thereof in Cdn.$) of a Borrower,
such Guarantor or such Subsidiary, as the case may be;
(j) an Event of Default (as defined in the Note Purchase Agreement) shall
have occurred and be continuing under the Note Purchase Agreement;
(k) Intentionally Deleted;
(l) a Borrower, any Guarantor or any of their Subsidiaries ceases or
threatens to cease to carry on all or a substantial part of the
business currently carried on by such Borrower, such Guarantor or such
Subsidiary;
(m) there is any change in ownership of shares of the Canadian Borrower
which results in Xxx Xxxxxxx, his spouse, descendants and ascendants
and any entities controlled by any of them or trusts established by, or
for the benefit of, any of them, ceasing to own, directly or
indirectly, more voting shares of the Canadian Borrower than any other
shareholder or group of related or affiliated shareholders without the
prior written consent of the Majority Lenders; or
(n) a Borrower shall have failed within 30 days of the giving of a Call
Option Triggering Event Notice to have caused an Affected Subsidiary to
become a Direct Guarantor;
the Collateral Agent shall, if so instructed by the Majority Lenders, by written
notice to the Borrowers declare the Borrowings, including accrued interest
thereon, and all other indebtedness of the Borrowers to any of the Lenders
and/or the Agents in connection with this Agreement to be due and payable,
whereupon:
(i) any right of the Borrowers to any further utilization of
the Facilities and any obligations of the Lenders under
the Commitments terminates; and
(ii) all Borrowings and other indebtedness of the Borrowers to any
of the Lenders and/or to the Agents in connection with this
Agreement are, notwithstanding anything in this Agreement to
the contrary, immediately due and payable without further
demand or other notice of any kind, all of which are expressly
waived by the Borrowers and Guarantors, and the Borrowers
shall immediately:
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(A) pay to the Canadian Agent and/or the U.S. Agent, as
the case may be, the amount so declared to be due and
payable (except for the Principal Amount of the
Bankers' Acceptances then issued and outstanding);
(B) pay to the Canadian Agent, a sum of money in Cdn. $
equal to such amount which the Canadian Agent shall
establish as being the amount which if invested in
certificates of deposit or similar money market
instruments issued by the Canadian Agent will,
together with the yield derived from such investments
(the sum of such amount and such yield the "Amount"),
equal the Principal Amount of all Bankers'
Acceptances then issued and outstanding. The Canadian
Agent shall, promptly upon receipt of the Amount
distribute among the Lenders the Amount or the
applicable portion thereof for such Bankers'
Acceptances; and
(C) if so requested by the Canadian Agent or the U.S.
Agent, as the case may be, pay to such Agent an
amount in immediately available funds (which funds
shall be held as collateral pursuant to arrangements
satisfactory to such Agent) equal to the aggregate
amount available for drawing under all Letters of
Credit then outstanding.
9.2 SECURITY
(a) Upon the occurrence of an Event of Default, the Security held by the
Collateral Agent and/or any Lender shall become immediately enforceable
and the Majority Lenders may, in their absolute discretion, instruct
the Collateral Agent or, in respect of any Security held by any Lender
directly, such Lender, to take any and all steps in order to enforce
and realize upon the Security, in whole or in part.
(b) The Borrowers' obligations and liabilities under this Agreement are in
no way affected or diminished in the event of any such enforcement of
or realization upon any Security by the Collateral Agent or any such
Lender.
9.3 REMEDIES NOT EXCLUSIVE
The Borrowers and the Guarantors expressly agree that the rights and
remedies of the Agents and the Lenders under this Agreement and the Security are
cumulative and in addition to, and not in substitution for, any rights or
remedies provided by law; any single or partial exercise by an Agent or any
Lender of any right or remedy for a default or breach of any term, covenant,
condition or agreement in this Agreement does not affect its or their rights and
does not waive, alter, affect, or prejudice any other right or remedy to which
an Agent or the Lenders may be lawfully entitled for the same default or breach.
Any waiver by an Agent or any of the Lenders of the strict observance of,
performance of or compliance with any term, covenant, condition or agreement of
this Agreement, and any indulgence by any Agent or any of the Lenders is not a
waiver of that or any subsequent default.
9.4 SET-OFF
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In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, each of the Lenders is
authorized during an Event of Default which is continuing, without notice to the
Borrowers, any Guarantor or to any other Person, any such notice being expressly
waived by the Borrowers and each Guarantor, to set-off and to appropriate and to
apply any and all deposits, matured or unmatured, general or special and any
other indebtedness at any time held by or owing by each of the Lenders to or for
the credit of or the account of any of the Borrowers or any Guarantor against
and on account of the obligations and liabilities of the Borrowers and the
Guarantors due and payable to each of the Lenders under this Agreement,
including without limitation, all claims of any nature or description arising
out of or connected with this Agreement.
ARTICLE X
PAYMENTS
10.1 PAYMENTS TO AGENTS/SWINGLINE LENDERS
(a) All payments to be made by the Canadian Borrower in connection with this
Agreement shall be made in funds having same day value to the Canadian
Agent, for its own account or for the account of the Canadian Lenders,
at the Toronto-Dominion Bank, International Centre Toronto, For account:
Asset Sales & Loan Syndications, CAN$ Account Number 0000-00-0000000
(Ref: FirstService Corp) for Cdn.$ and Bank of America National Trust &
Savings Association, SWIFT XXXXXX0X, ABA#026 009 593, in favour of: TD
Bank Toronto, Account #0000-0-00000, For further credit: Agency
Administration, US$ Account #0000-00-0000000 (Ref: FirstService Corp)
for US$ or at any other office or account designated by the Canadian
Agent. Any such payment shall be made on the date upon which such
payment is due, in accordance with the terms hereof, no later than 10:00
a.m. Any such payment shall be a good discharge to the Canadian Borrower
for such payment and, if any such payment is for the account of the
Lenders, the Canadian Agent shall hold the amount so paid "in trust" for
the Lenders until distributed to them in accordance with this Agreement.
(b) All payments to be made by the U.S. Borrowers in connection with this
Agreement shall be made in funds having same day value to the U.S.
Agent, for the account of the U.S. Lenders, at Bank of America NT & SA,
ABA#026009595, Toronto Dominion (Texas) Inc. Acct#0000-0-00000 Ref:
FirstService (USA), Attention: Xxxx Xxxxxx or at any other office or
account designated by the U.S. Agent. Any such payment shall be made on
the date upon which such payment is due, in accordance with the terms
hereof, no later than 10:00 a.m. Any such payment shall be a good
discharge to the U.S. Borrowers for such payment and, if any such
payment is for the account of the U.S. Lenders, the U.S. Agent shall
hold the amount so paid "in trust" for the U.S. Lenders until
distributed to them in accordance with this Agreement.
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(c) Payments to the Canadian Swingline Lenders shall be made directly to
the Canadian Swingline Lender as directed by the Canadian Swingline
Lender to the Canadian Borrower from time to time and payments to the
U.S. Swingline Lender shall be made directly to the U.S. Swingline
Lender as directed by the Canadian Swingline Lender to the U.S.
Borrowers from time to time.
(d) Whenever a payment is due on a day which is not a Business Day, the day
for payment is the following Business Day.
10.2 PAYMENTS BY LENDERS TO AGENTS
All payments to be made by any Lender to an Agent in connection with
Borrowings shall be made in funds having same day value to such Agent, for the
applicable Borrower's applicable Cdn. $ or U.S. $ account (unless otherwise
specified), at the branch, office or account mentioned in or designated under
Section 10.1 (a) or (b) and by the time designated therein.
10.3 PAYMENTS BY AGENTS TO BORROWERS
Any payment received by an Agent for the account of a Borrower shall be
paid in funds having same day value to such Borrower by such Agent on the date
of receipt or, if such date is not a Business Day, on the next Business Day, to
the Canadian Borrower's Operating Accounts or each U.S. Borrower's Operating
Account, as the case may be, at the same branch, or to such other accounts as a
Borrower may designate.
10.4 DISTRIBUTION TO LENDERS AND APPLICATION OF PAYMENTS
(a) Except as otherwise indicated herein, all payments made to an Agent,
Swingline Lender or Issuing Bank by a Borrower for the account of the
Lenders in connection herewith shall be distributed the same day by
such Person in funds having same day value among the Lenders to the
accounts last designated in writing by such Lenders respectively to the
Agents pro rata, in accordance with their respective Participations
with respect to the Loans, Bankers' Acceptances or Letters of Credit in
respect of which any such payment is made.
(b) Any amounts so distributed shall be applied by the Lenders in the
following order:
(i) to amounts due pursuant to Articles VII or XI;
(ii) to amounts due pursuant to Articles XII;
(iii) to amounts due pursuant to Article IV; and
(iv) to any other amounts due pursuant to this Agreement.
10.5 NO SET-OFF OR COUNTERCLAIM
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All payments by a Borrower or any Guarantor shall be made free and
clear of and without any deduction for or on account of any set-off or
counterclaim.
10.6 NON-RECEIPT BY AGENTS
Where a sum is to be paid hereunder to an Agent for the account of
another party hereto, such Agent shall not be obliged to make the same available
to that other party hereto until it has been able to establish that it has
actually received such sum, but if it does pay out a sum and it proves to be the
case that it had not actually received the sum it paid out, then the party
hereto to whom such sum was so made available shall on request ensure that the
amount so made available is refunded to such Agent and shall on demand indemnify
such Agent against any cost or loss it may have suffered or incurred by reason
of its having paid out such sum prior to its having received such sum.
10.7 WHEN DUE DATE NOT SPECIFIED
Whenever this Agreement does not provide a date when any amount payable
hereunder shall be due and payable such amount shall be due and payable on the
5th Business Day following written notice or demand for payment thereof by an
Agent or any Lender save that nothing hereinbefore provided shall in any way
affect or alter the rights and remedies available to the Agents and any Lender
under Article IX.
10.8 AGENTS' AUTHORITY TO DEBIT
In respect of all amounts payable by a Borrower under this Agreement,
the Borrowers and each Unlimited Guarantor hereby authorize and instruct the
Agents, as applicable, to debit, from time to time when such amounts are due and
payable, the account or accounts designated pursuant to Section 10.3 and all
other accounts of the applicable Borrower or Unlimited Guarantor, whether such
accounts are maintained with an Agent or otherwise, for the purpose of
satisfying payment thereof.
ARTICLE XI
EXPENSES
11.1 PAYMENT OF EXPENSES
Whether or not an Event of Default exists, the Borrowers shall, jointly
and severally:
(a) pay (i) all reasonable out-of-pocket expenses of the Agents and the
Lenders incurred in the preparation, negotiation, execution and
delivery of this Agreement, the Security and all other documents
relating hereto including, without limitation, legal fees and
out-of-pocket expenses of Lenders' Counsel and their agents (but not
including separate legal counsel engaged by any particular Lender) and
(ii) all other reasonable out-of-pocket expenses of the Agents incurred
in connection with the establishment and maintenance of the Facilities
including, without limitation, environmental and other consultants'
fees and expenses;
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(b) pay all reasonable out-of-pocket expenses of the Agents incurred in the
amendment or modification of this Agreement or documents (including
waivers or consents) relating thereto at a Borrower's request (whether
or not any such amendment or modification is actually consummated)
including without limitation, legal fees and out-of-pocket expenses of
Lenders' Counsel and their agents;
(c) pay all reasonable out-of-pocket expenses of the Agents and the Lenders
incurred in the enforcement and preservation of any of their rights
under this Agreement or any Security, including, without limitation,
legal fees and out-of-pocket expenses of Lenders' Counsel or other
counsel and their agents; and
(d) indemnify the Agents and the Lenders from all losses, costs, damages,
out-of-pocket expenses and liabilities which any Agent or any Lender
sustains or incurs (including, without limitation, any loss of profit or
expenses any Lender incurs by reason of the liquidation or redeployment
of deposits or other funds acquired by such Lender to maintain
Borrowings or any interest or other charges payable by such Lender to
other lenders of funds borrowed in order to make, to fund or to maintain
the Loans or to maintain any amount in default) as a consequence of (I)
any prepayment (it being understood that the mandatory repayments to be
made pursuant to Section 3.1 do not constitute prepayments), (II) any
acceleration of the payment of Borrowings pursuant to Section 9.1 or
17.8 or (III) any default by a Borrower under any of the provisions of
this Agreement including, without limitation, a failure to borrow on a
Drawdown Date or to issue Bankers' Acceptances on an Acceptance Date, a
failure to pay interest on, or principal amounts of, the Loans on the
dates due, the failure to make a payment on the specified date or the
failure to make a payment in accordance with this Agreement or any
misrepresentation by a Borrower contained in or delivered in writing in
connection with this Agreement. The certificate of an officer or manager
of any Agent or any such Lender setting forth the amount of any such
losses, damages, expenses and liabilities shall constitute, absent
manifest error, prima facie evidence of any such amount and any Agent
shall debit, from any Borrower's accounts, the amount stipulated in the
certificate in accordance with Section 10.8. The affected Agent or
Lender shall also provide to the affected Borrower a statement setting
out the basis for the calculation of such amount.
11.2 SURVIVAL
Without prejudice to the survival or termination of any other agreement
of the Borrowers under this Agreement, the obligations of the Borrowers under
Section 11.1 survive the repayment of all the Borrowings and the termination of
the Commitments.
11.3 ENVIRONMENTAL INDEMNITY
(a) Subject to the limitations in this Section 11.3, the Borrowers agree to
and do hereby, jointly and severally, indemnify and save harmless the
Agents and the Lenders and their officers, directors, employees, agents
and shareholders in such capacities (the "Indemnified Parties") from and
against any and all losses, damages, costs and
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expenses of any and every nature and kind whatsoever which at any time
or from time to time may be paid by or incurred by them (without
duplication and net of Tax Recoveries by any of the Indemnified Parties)
for, with respect to, or as a direct or indirect result of the disposal,
refining, generation, manufacture, production, storage, handling,
presence, treatment, transfer, release, processing or transportation of
any Hazardous Material in, on or under any property of whatsoever nature
or kind of a Borrower, or any Subsidiary thereof, or the discharge,
emission, spill or disposal from such property into or upon any land,
the atmosphere or any watercourse, body of water or wetland of any
Hazardous Material where it has been proven that the source of the
Hazardous Material is the said property to the extent that such losses,
damages, costs and expenses arise out of the relationship between the
Indemnified Parties and a Borrower reflected herein including, without
limitation:
(i) the cost of defending and/or counterclaiming or claiming over
against third parties in respect of any action or matter
referred to above;
(ii) any cost, liability or damage arising out of any settlement of
any action referred to above to which any Indemnified Party is
a party; and
(iii) costs of any cleanup in connection with any matter referred
to above.
(b) In the event that any claim, action, order, suit or proceeding,
including, without limiting the generality of the foregoing, any
inquiry or investigation (whether formal or informal) is brought or
instituted against any Indemnified Party, the Indemnified Party shall
promptly notify the Borrowers and the Borrowers shall promptly retain
counsel who shall be reasonably satisfactory to the Indemnified Parties
to represent the Indemnified Parties in such claim, action, order, suit
or proceeding and the Borrowers shall pay all of the reasonable fees
and disbursements of such counsel relating to such claim, action,
order, suit or proceeding.
(c) In any such claim, action, order, suit or proceeding, the Indemnified
Parties shall have the rights to retain other counsel to act on their
behalf, provided that the fees and disbursements of such other counsel
shall be paid by the Indemnified Parties unless: (i) the Borrowers and
the Indemnified Parties shall have mutually agreed to the retention of
such other counsel; or (ii) the named parties to any such claim,
action, order, suit or proceeding (including any added, third or
impleaded parties) include the Borrowers and the Indemnified Parties
and representation of all such parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them (such as the availability of different defences).
(d) Notwithstanding anything contained in this Section 11.3, none of the
Indemnified Parties shall agree to any settlement of any such claim,
action, order, suit or proceeding unless the Borrowers shall have
consented in writing thereto, and the Borrowers shall not be liable for
any settlement of any such claim, action, order, suit or proceeding
unless they have consented in writing thereto. The Borrowers shall be
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entitled to settle any such claim, action, order, suit or proceeding on
any terms it deems appropriate.
(e) The provisions of this Section 11.3 shall survive the Final Maturity
Date and the repayment of all Borrowings hereunder and the satisfaction
by the Borrowers of all other obligations hereunder.
(f) For the purposes of this Section 11.3, "Tax Recoveries" of any Person
in respect of a payment or outlay made or incurred by such Person means
the Taxes that would be saved or recovered by such Person and the
creation or increase of a loss or credit for Tax purposes which may be
used to reduce Taxes payable by such Person.
ARTICLE XII
FEES
12.1 AGENCY FEE
The Borrowers shall pay to the Agents, the agency fees for acting in
the capacity of Administration Agents hereunder contained in an agency fee
agreement between the Borrowers and the Agents.
12.2 MISCELLANEOUS
Fees payable by the Canadian Borrower hereunder shall be debited by the
Canadian Agent from the Canadian Borrower's Cdn. $ account designated under
Section 10.3 on the first Business Day of each Quarter and fees payable by the
U.S. Borrowers to the U.S. Agent shall be sent by the U.S. Borrowers by wire
transfer to the U.S. Agent's account designated under Section 10.1(b) on the
first Business Day of each Quarter.
ARTICLE XIII
THE AGENTS
13.1 AGENTS
Each Lender hereby appoints each Agent to act as its agent, as
specified hereunder, in connection with this Agreement and any matter
contemplated hereunder and authorizes irrevocably each Agent for the duration of
such appointment to exercise such rights, powers and discretions as are
delegated to such Agent pursuant to this Agreement and the Security together
with all such rights, powers and discretions as are incidental hereto or
thereto. Each Agent shall have only those duties and responsibilities which are
expressly specified in this Agreement and the Security, and it may perform such
duties by or through its agents or employees. This Agreement and the Security
shall not place any Agent under any fiduciary duties in respect of any Lender.
Each Agent and any other Person to whom an Agent may delegate duties or
responsibilities as permitted under Section 13.2 (h) shall enjoy the same
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benefits, rights and protections as those provided to the Agents under this
Article "mutatis mutandis".
13.2 AGENTS' RESPONSIBILITY
Each Agent may:
(a) assume, until it is notified in writing or has actual notice or
actual knowledge to the contrary, that:
(i) any representation made by a Borrower or any of its
Subsidiaries in or in connection with any of this Agreement,
any notice or other document, instrument or certificate is
true;
(ii) no Event of Default has occurred; and
(iii) each Borrower or a Subsidiary of a Borrower is not in breach
of or in default under, its obligations under any of this
Agreement or the Security;
and each Agent may also:
(b) unless such Agent has actual knowledge or actual notice to the
contrary, assume that each Lender's address is that identified with its
signature below until it has received from such Lender a notice
designating some other office of such Lender as its address and act
upon any such notice until the same is superseded by a further such
notice;
(c) engage and pay for the advice or services of any lawyers, accountants
or other experts whose advice or services may to it seem necessary,
expedient or desirable and rely upon any advice so obtained;
(d) unless such Agent has actual knowledge or actual notice to the
contrary, rely as to matters of fact which might reasonably be expected
to be within the knowledge of a Borrower or any Subsidiary of a
Borrower upon a statement signed by or on behalf of a Borrower or any
Subsidiary of a Borrower;
(e) unless such Agent has actual knowledge or actual notice to the
contrary, rely upon any communication or document believed by it to be
genuine;
(f) refrain from exercising any right, power or discretion vested in it
under this Agreement or any Security unless and until instructed by the
Majority Lenders as to whether or not such right, power or discretion
is to be exercised and, if it is to be exercised, as to the manner in
which it should be exercised;
(g) refrain from exercising any right, power or discretion vested in it
which would or might in its opinion be contrary to any law of any
jurisdiction or any directive or
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otherwise render it liable to any Person, and may do anything which is
in its opinion necessary to comply with any such law or directive;
(h) retain for its own benefit, and without liability to account for, any
fee or other sum receivable by it for its own account;
(i) accept deposits from, lend money to, provide any advisory or other
services to or engage in any kind of banking or other business with any
party (including any Affiliate thereof) to this Agreement; and
(j) refrain from acting in accordance with any instructions of the Majority
Lenders to begin any legal action or proceeding arising out of or in
connection with any of this Agreement or any Bankers' Acceptance, or
take any steps to enforce or realize upon any Security, until it shall
have received such security as it may require (whether by way of
payment in advance or otherwise) against all costs, claims, expenses
(including legal fees) and liabilities which it will or may expend or
incur in complying with such instruction.
13.3 AGENTS' DUTIES
Each Agent shall:
(a) promptly upon receipt thereof, inform each Lender of the contents of
any notice, document, request or other information received by it in
its capacity as an Agent hereunder from a Borrower or any Subsidiary of
a Borrower;
(b) promptly notify each Lender of the occurrence of any Event of Default
or any Default by a Borrower or a Guarantor in the due performance of
its obligations under this Agreement, any Security or any document
incidental thereto to which it is expressed to be a party and of which
the Agent has actual knowledge or actual notice;
(c) each time the Borrowers request the prior written consent of the
Majority Lenders, use its best efforts to obtain and communicate to the
Borrowers the response of the Majority Lenders in a reasonable and
timely manner having due regard to the nature and circumstances of the
request;
(d) subject to the foregoing provisions of this Section 13.3, act in
accordance with any instructions given to it by the Majority Lenders
and, in particular, only take steps to enforce or realize upon Security
in accordance with the instructions or delegated authority of the
Majority Lenders; and
(e) if so instructed by the Majority Lenders, refrain from exercising any
right, power or discretion vested in it under this Agreement, the
Security or any document incidental thereto.
13.4 PROTECTION OF AGENTS
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Notwithstanding anything to the contrary expressed or implied herein, each of
the Agents shall not:
(a) be bound to enquire as to:
(i) whether any representation made by a Borrower, a Guarantor or
any of their Subsidiaries in or in connection with this
Agreement, the Security or any document incidental thereto is
true;
(ii) the occurrence or otherwise of any Event of Default;
(iii) the performance by a Borrower, a Guarantor or any of their
Subsidiaries of its obligations under any of this Agreement,
the Security or any document incidental thereto;
(iv) any breach of or default by a Borrower, a Guarantor or any of
their Subsidiaries of or under its obligations under this
Agreement, the Security or any document incidental thereto; or
(v) the use or application by a Borrower of any of the proceeds of
the Facilities;
(b) be bound to account to any Lender for any sum or the profit element
of any sum received by it for its own account;
(c) be bound to disclose to any Person any information relating to a
Borrower or a Guarantor if such disclosure would or might in its
opinion constitute a breach of any law or regulation or be otherwise
actionable at the suit of any Person; or
(d) accept any responsibility for the accuracy and/or completeness of any
information supplied in connection herewith or for the legality,
validity, effectiveness, adequacy or enforceability of this Agreement,
any Bankers' Acceptance or any document incidental hereto or thereto and
no Agent shall be under any liability to any Lender as a result of
taking or omitting to take any action in relation to this Agreement, any
Bankers' Acceptance, the Security or any document incidental hereto or
thereto save in the case of gross negligence or wilful misconduct, and
each of the Lenders agrees that it will not assert or seek to assert
against any director, officer, employee or agent of any Agent any claim
it might have against any of them in respect of the matters referred to
in this Section 13.4.
13.5 INDEMNIFICATION OF AGENTS
Each Lender shall, on demand by an Agent, indemnify such Agent pro rata
in accordance with such Lender's Participation at the time of such demand
against any and all costs, claims, reasonable expenses (including legal fees)
and liabilities which such Agent may incur (and which have not been reimbursed
by a Borrower), otherwise than by reason of its own gross negligence or wilful
misconduct, in acting in its capacity as an Agent under this
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Agreement, any Bankers' Acceptance, the Security or any document incidental
hereto or thereto.
13.6 TERMINATION OR RESIGNATION OF AGENT
(a) Notwithstanding the appointment of an Agent, the Majority Lenders may
(with the consent of the Canadian Borrower prior to an Event of Default
and without requiring such consent after the occurrence of an Event of
Default which is continuing; such consent not to be unreasonably
withheld or delayed), upon giving an Agent 90 days prior written notice
to such effect, terminate an Agent's appointment hereunder.
(b) An Agent may resign its appointment hereunder at any time without
assigning any reason therefor by giving written notice to such effect
to each of the other parties hereto.
(c) In the event of any such termination or resignation, the Majority
Lenders shall appoint a successor Agent (with the consent of the
Canadian Borrower prior to an Event of Default and without requiring
such consent after the occurrence of an Event of Default which is
continuing, such consent not to be unreasonably withheld or delayed).
The Canadian Agent or the U.S. Agent, as the case may be, (if it is the
Agent being replaced) shall deliver copies of the Accounts to such
successor and the retiring Agent shall be discharged from any further
obligation hereunder but shall remain entitled to the benefit of the
provisions of this Article XIII and the Agent's successor and each of
the other parties hereto shall have the same rights and obligations
among themselves as they would have had if such successor originally
had been a party hereto as an Agent.
13.7 RIGHTS OF AN AGENT AS LENDER
With respect to its Commitment and its Participation, and to Bankers'
Acceptances and Letters of Credit, an Agent shall have the same rights and
powers under this Agreement and any Bankers' Acceptances as any other Lender,
and it may exercise such rights and powers as though it were not performing the
duties and functions delegated to it as an Agent hereunder, and the term
"Lender" or any other similar term shall, unless the context otherwise requires,
include any Agent in its capacity as a Lender.
13.8 AUTHORIZED WAIVERS, VARIATIONS AND OMISSIONS
If so authorized in writing by the Majority Lenders, the Collateral
Agent may grant waivers, consents, vary the terms of this Agreement and do or
omit to do all acts and things in connection herewith or therewith. Except with
the prior written agreement of all the Lenders, nothing in this Section 13.8
shall authorize:
(a) any decrease in the Acceptance Fee, the Libor Margin, the Letter of
Credit Fee, the Prime Rate Margin, the U.S. Base Rate Margin, the U.S.
Prime Rate Margin or the Commitment Fees;
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(b) any extension of the date for, or alteration in the amount, currency or
mode of calculation or computation of any payment of principal or
interest or other amount;
(c) any increase in the Commitment of a Lender or subject any Lender to any
additional obligations hereunder;
(d) any amendments to Section 3.11;
(e) any change in the terms of Article IX;
(f) any change in the definition of Majority Lenders;
(g) the release or discharge of a Borrower or a Guarantor; provided however
and notwithstanding the foregoing, the Collateral Agent may, without
the consent of the Lenders, grant partial releases and discharges of
the Security in connection with any sale, lease, transfer, assignment,
disposition or conveyance by the Canadian Borrower and/or any of its
Subsidiaries of properties or assets permitted under Section 8.2(c)
hereof; or
(h) any amendments to this Section 13.8.
13.9 FINANCIAL INFORMATION CONCERNING THE BORROWERS OR GUARANTORS
Subject to Section 13.3 (a), no Agent shall have any duty or
responsibility either initially or on a continuing basis to provide any Lender
with any credit or other information with respect to the financial condition and
affairs of the Borrowers or Guarantors.
13.10 KNOWLEDGE OF FINANCIAL SITUATION OF BORROWERS
Each of the Lenders represents and warrants to the Agents that it has
made its own independent investigation of the financial condition and affairs of
the Borrowers and each Guarantor in connection with the making and continuation
of its Participation in this Agreement and that it has not relied on any
information provided to it by any Agent in connection herewith or therewith, and
each represents and warrants to the Agents that it shall continue to make its
own appraisal of the creditworthiness of the Borrowers and the Guarantors from
time to time.
13.11 LEGAL PROCEEDINGS
No Agent shall be obligated to take any legal proceedings against a
Borrower or any other Person for the recovery of any amount due under this
Agreement or under any Bankers' Acceptances. No Lender shall bring legal
proceedings against a Borrower, any Guarantor or Subsidiary hereunder or in
connection herewith, or exercise any right arising hereunder or in connection
herewith over the property and assets of a Borrower, any Guarantor or any
Subsidiary, without the prior written consent of the Majority Lenders.
13.12 CAPACITY AS AGENT
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In performing its functions and duties under this Agreement, each Agent
shall act solely as the agent of the Lenders and shall not assume, and shall not
be deemed to have assumed, any obligation as agent or trustee for a Borrower or
any other Person. No Agent shall be under any liability or responsibility of any
kind to the Borrowers, the Lenders or to any other Person arising out of or in
relation to any failure or delay in performance or breach by any Lender or
Lenders or, as the case may be, by the Borrowers, any Guarantor or any other
Person (other than such Agent in respect of its own gross negligence or wilful
misconduct) pursuant to or in any way in connection with this Agreement.
13.13 DEPOSITS OR LOANS RESPECTING THE BORROWERS
Each Agent and each of the Lenders may accept deposits from, lend money
to and generally engage in any kind of banking or other business with the
Borrowers or the Guarantors without liability to account to any Agent or any
Lender.
ARTICLE XIV
ASSIGNMENTS AND TRANSFERS
14.1 BENEFIT OF AGREEMENT
This Agreement shall be binding upon and enure to the benefit of each
party hereto and its successors and permitted assigns.
14.2 ASSIGNMENTS AND TRANSFERS BY A BORROWER OR AN UNLIMITED GUARANTOR
No Borrower nor the Unlimited Guarantor shall be entitled to assign or
transfer all or any of its rights, benefits and obligations hereunder.
14.3 ASSIGNMENTS AND TRANSFERS BY A LENDER
(a) Subject to Section 14.4, any Lender may, at its cost, assign or
transfer:
(i) to an affiliate of such Lender at any time; and
(ii) with:
(A) the consent of the Canadian Agent with respect to a
Canadian Lender and the U.S. Agent with respect to a
U.S. Lender (which consents shall not be unreasonably
withheld or delayed); and
(B) (unless there exists an Event of Default) the consent
of the Canadian Borrower (which shall not be
unreasonably withheld or delayed)
and upon such terms and conditions as such Lender shall determine, all
or any portion of its rights, benefits and/or obligations hereunder in
relation to a portion of such Lender's Commitment of not less than,
with respect to the Canadian Facilities,
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Cdn.$1,000,000 and with respect to the U.S. Facilities, U.S. $2,500,000,
to an assignee or a transferee which in the case of assignments by a
Canadian Lender is a resident in Canada (a "Canadian Assignee") and in
the case of assignments by a U.S. Lender, is a Person which can comply
with the provisions of Section 7.9(a) of this Agreement and provides
evidence thereof satisfactory to the U.S. Borrowers acting reasonably
and is in the business of making loans (a "U.S. Assignee"); provided
that in the case of an assignment or transfer by a Canadian Lender there
is a corresponding assignment or transfer by the related U.S. Lender
(which may, in certain circumstances be the same institution) to a U.S.
Assignee related to the Canadian Assignee (which may in certain
circumstances be the same institution) of an amount which bears the same
proportion to the related U.S. Lender's Commitment as the amount
assigned or transferred by the Canadian Lender bears to the Canadian
Lender's Commitment, and vice versa in the case of an assignment or
transfer by a U.S. Lender.
(b) Where obligations of any Lender are so assigned or transferred, the
assignee or transferee shall confirm in writing to the Borrowers and the
Canadian Agent and the U.S. Agent, as the case may be, prior to such
assignment or transfer taking effect, that it shall be bound towards the
Borrowers and the Agents by the terms hereof relating to such
obligations. On the assignment and transfer being made and such written
confirmation, as aforesaid, being delivered to the Borrowers and such
Agent, such Lender shall be relieved of its obligations to the extent of
such assignment or transfer thereof and such assignee or transferee
shall become a Lender for all purposes of this Agreement and the related
documents and transactions provided herein or contemplated thereby to
the extent of such assigned or transferred interest on the 5th Business
Day following receipt by the Canadian Agent or the U.S. Agent, as
applicable, of the confirmation of assignment.
14.4 TRANSFER CERTIFICATE
If any Lender wishes to assign or transfer all or any of its rights,
benefits and obligations hereunder in accordance with Section 14.3, then such
assignment or transfer shall be effected by the delivery by such Lender to the
Canadian Agent and the U.S. Agent and the Borrowers of a duly completed and
executed Transfer Certificate whereupon, to the extent that in such Transfer
Certificate the Lenders party thereto seeks to assign or transfer its rights and
obligations hereunder:
(a) the applicable Borrower(s) and such Lender shall each be released from
further obligations to the other hereunder, and their respective rights
against each other shall be cancelled (such rights and obligations
being referred to in this Section 14.4 as "discharged rights and
obligations");
(b) the applicable Borrower(s) and the Transferee party thereto shall each
assume obligations towards and acquire rights in respect of each other
which differ from the discharged rights and obligations only insofar as
the obligations so assumed and the
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rights so acquired by the Borrowers are owed to and constituted by
claims against such Transferee and not such Lender, so that the
Borrowers and the Transferee shall have the same rights and obligations
towards each other which they would have acquired had the Transferee
been an original party hereto;
(c) the Agents, the Transferee and the other Lenders shall acquire the same
rights and assume the same obligations between themselves as they would
have acquired and assumed had the Transferee been an original party
hereto with the obligations assumed and the rights acquired by it as a
result of such assignment or transfer.
(d) the amounts payable by any Borrower under this Agreement shall not
increase, whether in respect of withholding on account of taxes or
otherwise, as a result of any such assignment or transfer to a Lender
which is, or is deemed to be (i) in the case of the Canadian
Facilities, not resident in Canada for the purposes of the Income Tax
Act (Canada) with respect to any such Transferee becoming a Canadian
Lender or (ii) in the case of the U.S. Facilities, is not a resident of
the U.S. for the purpose of the Code with respect to any such
Transferee becoming a U.S. Lender.
14.5 NOTICE
The Canadian Agent or the U.S. Agent, as the case may be, shall notify
promptly the appropriate parties hereto of the receipt by it of any Transfer
Certificate, and shall promptly deliver a copy of such Transfer Certificate to
the Borrowers.
14.6 SUB-PARTICIPATIONS
Any Lender may, at its own cost, grant one or more sub-participations
in all or any portion of its rights, benefits and/or obligations hereunder to
third parties, without the consent of the Borrowers, and upon such terms and
conditions as such Lender shall determine, provided that, notwithstanding any
such sub-participation, such Lender shall remain, in so far as the other parties
hereto are concerned, entitled to its rights and benefits hereunder and bound by
its obligations hereunder and the Borrowers, the other Lenders and the Agents
shall not be obliged to recognize any such third party as having the rights
against any of them which it would have if it had been a party hereto, and
provided further that in the case of any sub-participation by a Canadian Lender
to a Canadian participant (a "Canadian Participant"), there shall be a
corresponding sub-participation by the related U.S. Lender (which may in certain
circumstances be the same institution) to a U.S. participant (a "U.S.
Participant") related to the Canadian Participant of an amount which has the
same proportion to the related U.S. Lender's Commitment as the amount
sub-participated by the Canadian Lender has to the Canadian Lender's Commitment,
and vice versa in the case of sub-participation by a U.S. Lender. For greater
certainty, the Borrowers shall not be obligated to pay, in respect of any
rights, benefits and/or obligations in which a Lender has granted one or more
such sub-participations, to such Lender or to any sub-participant thereof any
amount(s) pursuant to Article VII of this Agreement which is (are) greater than
the amount(s), if any, which the Borrowers would otherwise have been obligated
to pay in respect of such rights, benefits and/or obligations to such Lender,
had such sub-participation(s) not been granted.
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14.7 DISCLOSURE
Each Lender is hereby authorized by the Borrowers and each Unlimited
Guarantor to disclose to any proposed assignee, Transferee or sub-participant
information in such Lender's possession relating to the Borrowers and each
Unlimited Guarantor provided that such proposed assignee, transferee or
sub-participant shall have executed and delivered to such Lender a written
undertaking to keep confidential any such information which is not publicly
available.
14.8 ASSIGNMENT TO FEDERAL RESERVE BANK
Notwithstanding anything to the contrary provided herein, without
seeking or obtaining the consent of any party, any U.S. Lender may at any time
assign and transfer all or any portion of its rights under this Agreement and
any promissory notes issued to such U.S. Lender hereunder to a Federal Reserve
Bank in the United States. No such assignment shall release such Lender from its
obligations hereunder.
ARTICLE XV
GOVERNING LAW, COURTS AND JUDGMENT CURRENCY
15.1 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.
15.2 COURTS
Any legal action or proceeding with respect to this Agreement or any
Security against a Borrower or the Unlimited Guarantor may be brought in the
courts of the Province of Ontario, which courts the parties hereto acknowledge
irrevocably to be a convenient forum for the resolution of any such legal action
or proceeding. Each Borrower and each Unlimited Guarantor hereby accepts, for
itself and in respect of its assets and revenues, generally and unconditionally
the non-exclusive jurisdiction of the aforesaid courts.
Each Unlimited Guarantor and each of the U.S. Borrowers hereby
irrevocably designates and appoints the Canadian Borrower (the "Process Agent")
at its registered office from time to time and of which the Canadian Agent shall
have been notified, which office is currently located at 00 Xxxxxxxxxx Xxxxxx
West, 38th Floor, Toronto-Dominion Xxxx Xxxxx, Xxxxxxx, Xxxxxxx X0X 0X0, as the
authorized agent of each of the U.S. Borrowers and each Unlimited Guarantor upon
which process may be served in any suit or proceeding arising out of or in
connection with this Agreement or any Security or other documents relating
hereto or thereto which may be instituted in the Province of Ontario and agrees
that service of process on the Process Agent together with written notice of
such service to such U.S. Borrower or such Unlimited Guarantor by the Person
serving the same shall, to the extent permitted by law, be deemed in every
respect to be effective service of process on such U.S. Borrower or such
Unlimited Guarantor, as the case may be. Notwithstanding the address
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noted on the execution pages hereof, process may be served on a Borrower at its
registered office. However, nothing in this Section 15.2 shall affect the right
of any Agent or Lender to serve legal process in any other manner permitted by
law or affect the right of any Agent or Lender to bring any action or proceeding
against a Borrower or the Unlimited Guarantor or their properties in the courts
of any other jurisdiction including, without limitation the State of New York.
15.3 JUDGMENT CURRENCY
(a) If for the purpose of obtaining judgment in any court it is necessary to
convert an amount due hereunder in the currency in which it is due (the
"Original Currency") into another currency (the "Second Currency"), the
rate of exchange applied shall be that at which, in accordance with
normal banking procedures, a Lender could purchase, in the Toronto
foreign exchange market, the Original Currency with the Second Currency
on the date 2 Business Days preceding that on which judgment is given.
Each Borrower and each Unlimited Guarantor agrees that its obligation in
respect of any Original Currency due from it to any Lender hereunder
shall, notwithstanding any judgment or payment in such other currency,
be discharged only to the extent that, on the Business Day following the
date such Lender receives payment of any sum so adjudged to be due
hereunder in the Second Currency such Lender may, in accordance with
normal banking procedures, purchase, in the Toronto foreign exchange
market the Original Currency with the amount of the Second Currency so
paid; and if the amount of the Original Currency so purchased or could
have been so purchased is less than the amount originally due in the
Original Currency, each Borrower and each Unlimited Guarantor agrees as
a separate obligation and notwithstanding any such payment or judgment
to indemnify such Lender against such loss.
(b) The term "rate of exchange" in this Section 15.3 means the spot rate at
which the Lender in accordance with normal practices is able on the
relevant date to purchase the Original Currency with the Second
Currency and includes any premium and costs of exchange payable in
connection with such purchase.
ARTICLE XVI
GUARANTORS' OBLIGATIONS
16.1 GUARANTEE
(a) The Canadian Borrower, as primary obligor and not as a surety merely,
hereby unconditionally and irrevocably guarantees to each of the Agents
and each of the Lenders the punctual payment when due in accordance
with the terms hereof of all obligations, of whatever kind and
description, of the U.S. Borrowers and each of them to the Agents and
each of the Lenders now or hereafter existing, whether direct or
indirect, absolute or contingent, matured or unmatured, secured or
unsecured joint, several or independent pursuant to or arising out of
or under this Agreement and the
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Security (all such obligations so guaranteed are referred to herein as
the "Canadian Borrower's Guaranteed Obligations").
(b) Each Unlimited Guarantor hereby:
(i) unconditionally and irrevocably guarantees; and
(ii) is jointly and severally liable and obligated with the
Canadian Borrower to each of the Agents and the Lenders for;
(A) the due and punctual payment of amounts of principal,
interest or fees in respect of all Borrowings and all
other amounts payable to the Agents or the Lenders by
the Canadian Borrower under this Agreement, or any
portion thereof; and
(B) all other obligations of the Canadian Borrower to
the Agents or the Lenders under this Agreement
(collectively the "Unlimited Guarantors' Guaranteed Obligations").
(c) Without in any way limiting the foregoing, each of the Canadian
Borrower and the Unlimited Guarantors hereby unconditionally and
irrevocably agrees and covenants with the Agents and the Lenders that:
(i) the Guaranteed Obligations shall be a guarantee of payment and
not merely of collection and shall be a primary obligation of
each of the Canadian Borrower and the Unlimited Guarantor.
(ii) it will pay duly and punctually all its Guaranteed
Obligations under the terms of this Agreement;
(iii) its Guaranteed Obligations shall not be affected by any act,
omission or circumstances which but for this provision might
operate to release or otherwise exonerate it from such
Guaranteed Obligations or limit or reduce or otherwise affect
such Guaranteed Obligations including without limitation and
whether or not known to it or the Lenders or an Agent:
(A) any time or indulgence granted to or composition with
any Borrower or any other Person;
(B) the variation, extension, compromise, renewal or
release of, or refusal or neglect to perfect or
enforce, any terms of this Agreement, the Borrowings,
the Security or any rights or remedies against, or
security granted by, any Borrower or any other
Person; or
(C) any irregularity or unenforceability of any
obligations of any Borrower or any other Person under
this Agreement, the Borrowings, any
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Guaranteed Obligations or any present or future law
or order of any government or authority (whether of
right or in fact) purporting to reduce or otherwise
affect any of such obligations, it being the intent
that its Guaranteed Obligations under this Agreement
shall remain in full force and this Agreement shall
be construed accordingly as if there were no such
irregularity, unenforceability, law or order;
(iv) it waives any right it may have of first requiring any Agent
or any Lender, before enforcing its rights against it, to
proceed against or claim payment from a Borrower or any other
Person or enforce any Security; and
(v) if any claim is made by an Agent or any Lender against it
under this Agreement and is not entirely and irrevocably paid
and discharged, it shall not have the right to rank as a
creditor in competition with any Agent or any Lender in the
bankruptcy, liquidation or dissolution of a Borrower and shall
not attempt to do so until payment in full of all indebtedness
and liabilities which may be owing by such Borrower to any
Agent or Lender under this Agreement and all Borrowings.
(vi) The Guaranteed Obligations shall survive the repayment thereof
and shall be reinstated as to any Guaranteed Obligations
incurred prior to the termination hereof if any payment of any
Guaranteed Obligation is at any time rescinded or must
otherwise be returned as a result of the bankruptcy,
insolvency or reorganization of any of the U.S. Borrowers,
Canadian Borrower and/or the Unlimited Guarantor, all as
though such payment had not been made.
ARTICLE XVII
MISCELLANEOUS
17.1 EQUAL RANKING OF LENDERS
The Lenders, and to the extent necessary the Borrowers, agree that any
indebtedness of a Borrower towards any of the Agents and any of the Lenders:
(a) hereunder; and
(b) under Hedging Agreements for so long as such Lender remains a
Lender hereunder,
shall be secured by the Security and shall be recoverable by the Agents in
accordance with the terms of this Agreement and the Security and all such
obligations shall rank equally without preference or distinction with the
indebtedness of a Borrower towards any Lender hereunder or under any Hedging
Agreements.
17.2 SHARING OF INFORMATION
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Each Borrower and the Unlimited Guarantor agree that the Agents and the
Lenders may share amongst themselves any information which any of them may
possess concerning any Borrower or the Unlimited Guarantor, as the case may be,
in respect of a Borrower's or the Unlimited Guarantor's undertakings,
obligations or indebtedness towards any Lender pursuant to this Agreement as
well as any payment received from a Borrower or the Unlimited Guarantor by any
Lender pursuant to this Agreement.
17.3 SEVERABILITY
If any of the provisions of this Agreement, any Article, any Section or
any Bankers' Acceptance shall be unenforceable or invalid in any jurisdiction,
the validity and enforceability of such provisions in any other jurisdiction
shall not be impaired thereby nor shall the enforceability and validity of any
other provisions of this Agreement, any Article, any Section or any Bankers'
Acceptance be impaired thereby.
17.4 REMEDIES AND WAIVERS
No failure to exercise, and no delay in exercising, on the part of the
Agents or the Lenders or any of them, any right or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right or remedy prevent any further or other exercise thereof or the exercise of
any other right or remedy. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
17.5 DIRECT OBLIGATION
Notwithstanding any other provision hereof, the Borrowers shall be
obligated directly towards the Agents and each of the Lenders in respect of the
Participation of each of the Lenders which are made available to such Borrower
as well as any other amounts which may be payable by the Borrowers pursuant to
or in connection with this Agreement or any Borrowings. The obligations of each
of the Lenders are independent from one another, are not joint and several, and
may not be increased, reduced, extinguished or otherwise affected due to the
default of another Lender pursuant hereto. Any default of any party hereto in
the performance of its obligations shall not release any of the other parties
hereto from the performance of any of its respective obligations.
17.6 NOTICES
The following provisions shall govern in respect of notices or
communications contemplated hereunder:
(a) unless otherwise stated, each communication to be made hereunder shall
be made in writing;
(b) all communications or notices to be made to:
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(i) any Borrower, shall be made to the Canadian Borrower, as
provided in Section 17.6 (c); and
(ii) an Unlimited Guarantor, shall be made to such Unlimited
Guarantor with a copy to the Canadian Borrower, as provided in
Section 17.6 (c);
(c) subject to Section 17.6 (b) and to an Agent's irrevocable right to
deliver communications or notices to the Canadian Borrower's address
specified in Section 15.2, any written communication or document to be
made or delivered by one party to another pursuant to this Agreement
shall (unless otherwise specified herein or that other party has by
notice to the Agent specified another address or facsimile number) be
made or delivered to that other Person at the address or facsimile
number identified with its signature below and shall in any event be
deemed to have been made or delivered or (in the case of any other form
of written communication) when left at that address or otherwise
received or, as the case may be, 10 days after being deposited in the
post first class postage prepaid in an envelope addressed to it at that
address, provided that any communication or document to be made or
delivered to any Agent shall be effective only when received by such
Agent; it is agreed that parties shall not send communications by mail
or postal service when there is an actual or likely pending strike or
similar disruption of mail or postal services;
(d) subject to Section 17.6 (b), where any provision of this Agreement
specifically contemplates telephone communication, such communication
shall (unless otherwise specified herein or that other party has by
written notice to the Agents specified another telephone number) be made
to that other party at the telephone number identified with its
signature below; each such telephone communication shall be expressed to
be for the attention of the officer whose name has been identified with
its signature below; and
(e) each party hereto shall confirm promptly by writing any telephone
communication made by it to another party pursuant to this Agreement,
however the absence of such confirmation shall not affect the validity
of such communication.
17.7 COUNTERPARTS
This Agreement may be executed in any number of counterparts and all of
such counterparts taken together shall be deemed to constitute one and the
same instrument.
17.8 CALCULATION/LIMIT ON RATE OF INTEREST
(a) for purposes of this agreement whenever interest is to be paid on a
basis of a year of less than a calendar year (the "calculation period")
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 the calculation period.
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(b) Notwithstanding any provision contained in this Agreement, the
Borrowers shall not be obliged to make any payments of interest or
other amounts payable to a Lender hereunder in excess of the amount or
rate which would be prohibited by applicable law or would result in the
receipt by a Lender of interest at a criminal rate (as such terms are
construed under the Criminal Code (Canada) or other applicable law).
(c) In the event that any such payments are limited or prohibited as
provided in Section 17.8 (a), the Lenders shall have no further
obligation to make any Borrowings available hereunder and the entire
amount of Borrowings then outstanding shall become immediately due and
payable.
17.9 NO MERGER OR NOVATION
All guarantees and Security provided to an Agent and/or the Lenders
prior to the date hereof in connection with the Original Credit Agreement, the
First Amended and Restated Credit Agreement, the Second Amended and Restated
Credit Agreement or the indebtedness of the Borrowers thereunder remain in full
force and effect with respect to this Third Amended and Restated Credit
Agreement, as amended, modified or supplemented from time to time, there being
no novation or merger hereby of the Original Credit Agreement, the First Amended
and Restated Credit Agreement, the Second Amended and Restated Credit Agreement,
such guarantees or the Security.
17.10 PRECEDENCE
For so long as the Intercreditor Agreement is in full force and effect,
in the event that the provisions of the Intercreditor Agreement contradict or
are otherwise incapable of being construed in conjunction with the provisions of
this Agreement, the provisions of the Intercreditor Agreement shall take
precedence over those provisions contained herein.
AS WITNESS the hands of the duly authorized representatives of the
parties hereto on the execution pages hereof as of the day and year first before
written.
