Exhibit 10.8
FIRST AMENDING AGREEMENT
TO
CREDIT AGREEMENT
THIS AMENDING AGREEMENT is dated this 22nd day of May, 2002
AMONG:
XXXX & XXXXXX LTD., a company formed by amalgamation under the laws of
the Province of British Columbia
(the "Acquisition Borrower")
OF THE FIRST PART
AND:
P&T FUNDING LIMITED PARTNERSHIP, a limited partnership formed under
the laws of the Province of British Columbia
(the "Operating Borrower")
OF THE SECOND PART
AND:
MACKENZIE PULP LAND LTD., a company formed by incorporation under the
laws of the Province of British Columbia
(the "Guarantor")
OF THE THIRD PART
AND:
EACH OF THE LENDERS NAMED ON THE SIGNATURE PAGES OF THIS AGREEMENT
(collectively, the "Lenders")
OF THE FOURTH PART
AND:
THE TORONTO-DOMINION BANK
(the "Administration Agent")
OF THE FIFTH PART
WHEREAS:
A. The Acquisition Borrower, the Operating Borrower, the Guarantor, Xxxx &
Xxxxxx Xxxxxxxxx Pulp Operations Ltd. ("Mackenzie Pulp"), the Lenders and the
Administration Agent
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entered into a Credit Agreement dated as of June 15, 2001 (the "Credit
Agreement") under which, inter alia, the Lenders made available to the Operating
Borrower an extendible revolving term facility (the "Operating Facility") in the
maximum amount of Cdn$110,000,000 (or the Equivalent Amount in US Dollars);
B. On December 31, 2001, in the course of the winding-up of Mackenzie Pulp
pursuant to the Business Corporations Act (Alberta), Mackenzie Pulp transferred
all of its assets to the Acquisition Borrower and the Acquisition Borrower
assumed all of the obligations of Mackenzie Pulp. In connection with the
winding-up of Mackenzie Pulp:
(i) the Acquisition Borrower executed and delivered to the Administration
Agent a debenture in the principal amount of Cdn.$160,000,000
containing a fixed charge over all real property interests, and a
floating charge and security interest over all present and
after-acquired personal property, of the Acquisition Borrower
relating to the pulp mill and related facilities and operations
located in Mackenzie, British Columbia (collectively, the "Mackenzie
Pulp Mill") acquired by the Acquisition Borrower from Mackenzie Pulp;
(ii) the Acquisition Borrower and the Land Trustee entered into a new
beneficiary authorization and charge agreement in favour of the
Administration Agent; and
(iii) the Administration Agent, with the consent of the Lenders, released
and discharged the Mackenzie Pulp Debenture, the Mackenzie Pulp
Security Agreement and the original Beneficiary Authorization and
Charge;
C. On January 1, 2002, the Borrowers effected, with the acceptance of the
Lenders, a change of credit insurance underwriter for the Eligible Insured
Accounts Receivable from the Foreign Credit Insurance Association to AIG Global
Trade & Political Risk Insurance Company;
D. The Operating Borrower has requested and the Lenders have agreed to the
extension of the Conversion Date for the Operating Facility under the Credit
Agreement, currently June 14, 2002, for a further 364 days, together with an
increase in the drawn and undrawn pricing spread on the Operating Facility; and
E. The parties have agreed to enter into this Agreement to record such
amendments to the Credit Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that, for good and valuable
consideration (the receipt and sufficiency of which are acknowledged by all
parties), the parties covenant and agree as follows:
1. Defined Terms. Unless otherwise defined in this Agreement, capitalized
terms used in this Agreement (including the recitals) shall have the meanings
ascribed to them in the Credit Agreement.
2. Amendments. The Credit Agreement is hereby amended as follows, with effect
as and from the date hereof unless otherwise indicated:
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(a) The definition of "Beneficiary Authorization and Charge" in Section
1.1(r) of the Credit Agreement is amended by deleting "Mackenzie Pulp"
wherever it appears and substituting "the Acquisition Borrower".
(b) The definition of "Conversion Date" in Section 1.1(ai) of the Credit
Agreement is amended by deleting "June 14, 2002" and substituting
"June 13, 2003".
(c) The definition of "Eligible Insured Accounts Receivable" in Section
1.1(aq) of the Credit Agreement is amended by deleting "either the
Foreign Credit Insurance Association ("FCIA") or Great American
Insurance Co. ("GAI"), a wholly owned subsidiary of American Financial
Group, Inc." therefrom and substituting the following:
"the Foreign Credit Insurance Association ("FCIA"), Great
American Insurance Co. ("GAI"), a wholly owned subsidiary of
American Financial Group, Inc., or AIG Global Trade &
Political Risk Insurance Company ("AIG")"
and by adding "or AIG, as the case may be" after "GAI" in paragraph
(ii) thereof.
(d) The definition of "Guarantors" in Section 1.1(bg) of the Credit
Agreement is amended by deleting paragraph (i) thereof and renumbering
paragraphs (ii) through (iv) as paragraphs (i) through (iii).
(e) The definition of "Material Subsidiary" in Section 1.1(cn) of the
Credit Agreement is amended by deleting the words "Mackenzie Pulp and"
in the last line thereof.
(f) A new definition of "Xxxx & Xxxxxx Canada Debenture" is added as
Section 1.1(df.1) of the Credit Agreement as follows:
"(df.1) "Xxxx & Talbot Canada Debenture" means a debenture in the
principal amount of Cdn.$160,000,000, executed by the
Acquisition Borrower in favour of the Administration Agent
for the benefit of the Lenders, containing a fixed charge over
all real property interests, and a floating charge and
security interest over all present and after-acquired personal
property of, the Acquisition Borrower in connection with the
Mackenzie Mill, in form and content satisfactory to the
Lenders."
(g) The definition of "Security Documents" in Section 1.1(ds) of the
Credit Agreement is amended by:
(i) deleting paragraphs (v) and (vi);
(ii) adding a new paragraph (v) as set out below:
"(v) the Xxxx & Xxxxxx Canada Debenture"; and
(iii) renumbering paragraphs (vii) to (ix) as paragraphs (vi) to
(viii).
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(h) Section 2.25 of the Credit Agreement is amended, with effect as and
from June 14, 2002, by deleting "25 basis points per annum" from the
seventeenth line thereof and substituting "45 basis points per annum".
(i) Section 3.12 of the Credit Agreement is amended, with effect as and
from June 14, 2002, by:
(i) adding ", plus 25 basis points per annum" at the end of
paragraphs (b)(i)(A) and (B) thereof;
(ii) deleting "100 basis points per annum" from the end of paragraph
(b)(i)(C) thereof and substituting "125 basis points per annum";
(iii) deleting "25 basis points per annum" from the end of paragraphs
(b)(ii)(A) and (B) thereof and substituting "50 basis points per
annum"; and
(iv) deleting "125 basis points per annum" from the end of paragraph
(b)(ii)(C) thereof and substituting "150 basis points per
annum".
(j) Section 4.5 of the Credit Agreement is amended, with effect as and
from June 14, 2002, by:
(i) deleting "100 basis points" from paragraph (b)(i) thereof and
substituting "125 basis points"; and
(ii) deleting "125 basis points" from paragraph (b)(ii) thereof and
substituting "150 basis points".
(k) Section 5.3 of the Credit Agreement is amended, with effect as and
from June 14. 2002, by:
(i) deleting "100 basis points" from the second line thereof and
substituting "125 basis points"; and
(ii) deleting "125 basis points" from the third line thereof and
substituting "150 basis points".
(l) Section 11.4 of the Credit Agreement is amended by deleting the words
"the Mackenzie Pulp Debenture" in the last sentence thereof and
substituting the words "the Xxxx & Xxxxxx Canada Debenture".
(m) The form of Margin Report set out in Schedule 4 to the Credit
Agreement is amended by deleting the column headed "Mackenzie Pulp".
(n) Schedule 5 to the Credit Agreement is amended by deleting the
reference therein to Mackenzie Pulp as a Material Subsidiary of Xxxx &
Talbot Canada.
3. Guarantor's Consent. The Guarantor hereby:
(a) consents to the amendments to the Credit Agreement effected pursuant
to this Agreement;
(b) confirms that its guarantee obligations pursuant to Article 10 of the
Credit Agreement (the "Guarantee") remain in full force and effect,
and shall include any modifications to the obligations of the
Borrowers effected pursuant to this Agreement; and
(c) acknowledges and agrees that, notwithstanding its execution of this
Agreement, the Credit Agreement (as amended by this Agreement) may, as
provided in Section 10.2 of the Credit Agreement, be further amended
without its consent and without diminishing its liability under the
Guarantee (including any liability arising from such further
amendments).
4. Representations and Warranties of Borrowers and Guarantor. To induce the
Lenders to execute and deliver this Agreement, each of the Borrowers and the
Guarantor represents and warrants to the Lenders (which representations shall
survive the execution and delivery of this Agreement, and each of which shall be
deemed to be a representation for purposes of Section 12.1(e) of the Credit
Agreement) that:
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(a) this Agreement has been duly authorized, executed and delivered by
each Borrower and the Guarantor and constitutes a legal, valid and
binding obligation, contract and agreement of each Borrower and the
Guarantor, enforceable against it in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles
relating to or limiting creditors' rights generally;
(b) the execution, delivery and performance by each Borrower and the
Guarantor of this Agreement:
(i) has been duly authorized by all necessary action of each
Borrower and the Guarantor and, if required, shareholder action:
(ii) does not require the consent or approval of any governmental or
regulatory body or agency;
(iii) will not violate any provision of law, statute, rule or
regulation or its organizational documents, any order of any
court or any rule, regulation or order of any agency or
government binding upon it, or any provision of any material
indenture, agreement or other instrument to which it is a party
or by which its properties or assets are or may be bound; and
(iv) will not result in a breach or constitute (alone or with due
notice or lapse or time or both) a default under any material
indenture, agreement or other instrument to which it is a party
or by which its properties or assets are or may be bound;
(c) as of the date hereof and after giving effect to this Agreement, no
Default or Event of Default has occurred and is continuing; and
(d) all the representations and warranties contained in Article 7 of the
Credit Agreement are true and correct in all material respects with
the same force and effect as if made by each Borrower on and as of the
date hereof, except to the extent that such representations and
warranties specifically relate to an earlier date, in which case they
are true and correct as such earlier date.
5. Payment of Expenses. Without limiting the Borrowers' obligations to the
Lenders under Section 14.5 of the Credit Agreement, the Borrowers jointly and
severally agree to pay upon demand the reasonable costs and expenses of the
Administration Agent and the Lenders and their counsel in connection with the
negotiation, preparation, approval, execution and delivery of this Agreement.
6. Limited Effect and Confirmation of Credit Agreement. This Agreement is
limited to the matters set forth herein and, except as expressly set forth
herein, nothing herein shall constitute (or be implied to constitute) an
amendment of any term or provision of the Credit Agreement. Except as expressly
amended hereby, the terms and conditions of the Credit Agreement shall continue
in full force and effect.
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7. Counterparts and Facsimile. This Agreement may be executed in any number of
counterparts and by facsimile, all of which taken together shall constitute one
Agreement, and any of the parties hereto may execute this Agreement by signing
such a counterpart.
8. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the Province of British Columbia and the laws of Canada
applicable therein.
9. Successors and Assigns. This Agreement shall enure to the benefit of and be
binding upon the parties to this Agreement and their respective successors and
permitted assigns.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed as of the date first above written.
XXXX & XXXXXX LTD.
Per: /s/ Xxxxx Xxxx
-------------------------------
Authorized Signatory
P&T FUNDING LIMITED PARTNERSHIP
by its General Partner,
XXXX & XXXXXX LTD.
Per: /s/ Xxxxx Xxxx
-------------------------------
Authorized Signatory
MACKENZIE PULP LAND LTD.
Per: /s/ Xxxxx Xxxx
-------------------------------
Authorized Signatory
THE TORONTO-DOMINION BANK,
as Lender
Per: /s/ Xxxxxx Xxxxx
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Authorized Signatory
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BANK OF MONTREAL,
as Lender
Per: /s/ Xxxx Xxxxxx
-------------------------------
Authorized Signatory
THE BANK OF NOVA SCOTIA,
as Lender
Per: /s/ Xxxx Xxxxxxxx
-------------------------------
Authorized Signatory
Per: /s/ Xxxxxx Xxxxxxx
-------------------------------
Authorized Signatory
THE TORONTO-DOMINION BANK,
as Administration Agent
Per: /s/ Xxxxx Xxxxxxxx
-------------------------------
Authorized Signatory
