THIS CREDIT AGREEMENT is made as of the 20th day of December, 1996.
B E T W E E N:
JPE CANADA INC.
(the "Borrower")
- and -
THE BANK OF NOVA SCOTIA,
(the "Lender")
RECITALS:
A. The Borrower requires credit facilities for general operating and corporate
purposes and for its acquisition of the property and assets of Pebra Inc.
pursuant to the Transaction.
B. By letter dated 11 December 1996, and accepted by the Borrower on 17
December, 1996 the Lender agreed to establish credits subject to, among
other things, the negotiation and execution of this Agreement.
C. The parties are entering into this Agreement to provide for the terms and
conditions of the credits.
NOW THEREFORE, for value received, and intending to be legally bound by
this Agreement, the parties agree as follows:
ARTICLE I
DEFINED TERMS
1.1 DEFINED TERMS
In this agreement, unless something in the subject matter or context is
inconsistent therewith:
1.1.1 "Advance" means a borrowing by the Borrower by way of Prime Rate
Advance, Base Rate Advance, acceptance of Bankers' Acceptances or issuance
of L/C's including deemed Advances and conversions, renewals and rollovers
of existing Advances, and any reference relating to the amount of Advances
shall mean the sum of all outstanding Prime Rate Advances and Base Rate
Advances plus the face amount of all outstanding Bankers' Acceptances and
L/C's.
1.1.2 "Agreement", "hereof", "herein", "hereto", "hereunder" or
similar expressions mean this Agreement and any Schedules hereto, as
amended, supplemented, restated and replaced from time to time.
1.1.3 "Agreement of Purchase and Sale" means without amendment, the
Agreement of Purchase and Sale dated November 15, 1996 made between Pebra
Inc. as Vendor and the Borrower as purchaser which agreement was referred
to in, and approved by, the Order of The Honourable Xx. Xxxxxxx Xxxxxxx
dated November 20, 1996, in the matter of the Companies' Creditors
Arrangement Act and in the matter of a proposed plan of compromise or
arrangement for the creditors of Pebra Inc. and Pebra U.S. Incorporated.
1.1.4 "Bankers' Acceptance" means those drafts or bills of exchange in
Canadian Dollars drawn by the Borrower and accepted by the Lender pursuant
to this Agreement.
1.1.5 "Bankers' Acceptance Fee" means, on any day, the sum of:
(i) Lender's commercial Bankers' Acceptance fee, expressed
as a percentage, announced by the Lender on that day as a
reference fee for Bankers' Acceptances accepted or to be accepted
by the Lender; plus
(ii) the margin for the Bankers' Acceptances specified in
Section 7.2
and then multiplying the resultant sum by a fraction, the numerator of
which is the duration of its term on the basis of the actual number of
days to elapse from and including the date of acceptance of a Bankers'
Acceptance by the Lender up to but excluding the maturity date of the
Bankers' Acceptance, and the denominator of which is the number of
days in the calendar year in question.
1.1.6 "Base Rate" means, on any day, the greater of:
(a) the annual rate of interest (expressed as a percentage per
annum on the basis of a 360 day year) announced by the Lender on that
day as its reference rate for commercial loans made by it in Canada in
U.S. Dollars; and
(b) the Federal Funds Effective Rate plus 0.625% per annum.
1.1.7 "Base Rate Advance" means an Advance in U.S. Dollars bearing
interest based on the Base Rate.
1.1.8 "Borrower" means JPE Canada Inc., a corporation to which the
Ontario Business Corporations Act applies.
1.1.9 "Borrowing Base" means at any time, the aggregate of the
following amounts at that time:
(a) (i) 90% of accounts receivable owing to the Borrower by GM,
Ford Motor Company, Chrysler Corporation and all other automotive
original equipment manufacturers; plus
(ii) 75% of other good quality accounts receivable of the
Borrower (excluding the receivables referred to in (iii) below);
plus
(iii) 90% of the two tax receivables which are described as
Parcel 3 of the Agreement of Purchase and Sale, such receivables
being approximately $947,000 and $507,000 as of the date hereof;
(excluding from all such accounts receivable referred to in (i), (ii)
and (iii) above, accounts receivable outstanding for over 90 days,
accounts receivable in respect of tooling, accounts receivable due
from employees of the Borrower, amounts of off-sets and accounts
receivable due to the Borrower by a person related to, or affiliated
or associated with, or a partner or a joint venture of, the Borrower);
plus
(b) (i) 65% of the inventory and work-in-progress (excluding
tooling contracts) of the Borrower valued at the lower of the
Borrower's cost or the fair market value thereof; less
(ii) inventory which has been received from suppliers during
the 30 days immediately preceding that time, has not been paid
for and is in the same state as it was on delivery, less
(c) the amounts outstanding under Encumbrances over any of the
Property of the Borrower in favour of persons other than the Lender
which have or may have priority over the security in favour of the
Lender;
(provided that the amount in paragraph (b) shall not, in the
calculation of the Borrowing Base, exceed 50% of the amount of
paragraph (a), plus paragraph (b), less paragraph (c) provided further
that the proviso shall not apply until 90 days after the date hereof.)
1.1.10 "Branch of Account" means the Windsor Commercial Banking Centre
of the Lender at 000 Xxxxxxxxx Xxxxxx, X.X. Xxx 000, Xxxxxxx, Xxxxxxx,
Xxxxxx X0X 0X0.
1.1.11 "Business Day" means a day of the year, other than Saturday or
Sunday, on which the Lender is open for business at its executive offices
in Xxxxxxx, Xxxxxxx, at the Branch of Account, and, in respect of Base Rate
Advances, at its principal office in New York, New York.
1.1.12 "Canadian Dollars", "Cdn. Dollars", "Cdn. $" and "$" mean
lawful money of Canada.
1.1.13 "Change of Control" means, with respect to the Borrower the
Permitted Holder ceasing to beneficially own all of the capital stock of
the Borrower.
1.1.14 "Collateral" means cash, a bank draft or a letter of credit
issued by a Canadian chartered bank or US bank acceptable to the Lender,
all in a form satisfactory to the Lender.
1.1.15 "Constating Documents" means, with respect to a corporation,
its articles of incorporation, amalgamation or continuance or other similar
document as amended from time to time, and its by-laws, and with respect to
a partnership, its partnership agreement and any other relevant governing
documents.
1.1.16 "Contracts" means agreements, franchises, leases, easements,
servitudes, privileges and other rights acquired from Persons.
1.1.17 "Credit A" means the credit of Cdn. $12,000,000 or the U.S.
Dollar equivalent thereof in favour of the Borrower which is established by
this Agreement.
1.1.18 "Credit B" means the credit of Cdn. $2,000,000 or the U.S.
Dollar equivalent thereof in favour of the Borrower which is established by
this Agreement.
1.1.19 "Credit C" means the credit of Cdn. $12,740,000 in favour of
the Borrower which is established by this Agreement.
1.1.20 "Credit D" means the credit of Cdn. $2,000,000 in favour of the
Borrower which is established by this Agreement.
1.1.21 "Credit E" means the credit of Cdn. $20,000 in favour of the
Borrower which is established by this Agreement.
1.1.22 "Credits" means Credit A, Credit B, Credit C, Credit D and
Credit E.
1.1.23 "Credit Documents" means this Agreement and all other documents
relating to the Credit including, without limitation, the Security.
1.1.24 "Current Assets" on any date means with respect to a Person,
any Property of that Person that will be converted into cash in the normal
operation of the business of that Person within one year of that date as
disclosed in the financial statements of that Person prepared in accordance
with GAAP.
1.1.25 "Current Liabilities" means on any date with respect to a
Person, any liability of that Person that will be paid in the normal
operation of the business of that Person within one year of that date as
disclosed in the financial statements of that Person prepared in accordance
with GAAP.
1.1.26 "Debt" means, with respect to the Borrower, without duplication
and, without regard to any interest component thereof (whether actual or
imputed) that is not due and payable, the aggregate of the following
amounts, each calculated in accordance with GAAP:
(a) money borrowed (including, without limitation, by way of
overdraft) or indebtedness represented by notes payable, operating
agreements and drafts accepted representing extensions of credit;
(b) all obligations (whether or not with respect to the borrowing
of money) that are evidenced by bonds, debentures, notes or other
similar instruments, or that are not so evidenced but that would be
considered to be indebtedness for borrowed money;
(c) all liabilities upon which interest charges are customarily
paid by that person;
(d) any capital stock of the Borrower that, by its terms (or by
the terms of any security into which it is convertible or for which it
is exchangeable at the option of the holder), or upon the happening of
any event, matures or is mandatorily redeemable, pursuant to a sinking
fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or prior to a Maturity Date
for cash or securities constituting Debt;
(e) all capital lease obligations and purchase money obligations;
(f) any guarantee (other than by endorsement of negotiable
instruments for collection or deposit in the ordinary course of
business) in any manner of any part or all of an obligation included
in items (a) through (e) above, including contingent liabilities in
respect of letters of credit, letters of guarantee and surety bonds;
and
(g) any guarantee, loan or financial assistance provided by the
Borrower to or for the benefit of any Person;
but excluding trade payables and accrued liabilities that are Current
Liabilities incurred in the ordinary course of business.
1.1.27 "Debt to Tangible Net Worth Ratio" means at any time the ratio
of Debt plus Current Liabilities (less the non-current portion of deferred
Taxes and pension liability) of the Borrower at that time to the Tangible
Net Worth of the Borrower at that same time.
1.1.28 "Designated Account" means, in respect of any Advance, the
account or accounts maintained by the Borrower at the Branch of Account.
1.1.29 "Drawdown Date" means the date, which shall be a Business Day,
of any Advance.
1.1.30 "Encumbrance" means any mortgage, debenture, pledge, hypothec,
lien, charge, assignment by way of security, consignment, lease,
hypothecation, security interest (including a purchase money security
interest) or other security agreement, trust or arrangement having the
effect of security for the payment of any debt, liability or obligation,
and "Encumbrances", "Encumbrancer", "Encumber" and "Encumbered" shall have
corresponding meanings.
1.1.31 "Event of Default" has the meaning defined in Section 13.1.
1.1.32 "Exchange Rate" means, on any day, with respect to the exchange
of either of Canadian Dollars or U.S. Dollars (the "First Currency") into
the other of those currencies (the "Other Currency"), the spot buying rate
quoted by the Lender for purchases of the First Currency with the Other
Currency at noon (Toronto time) on such day, or if such rate is not or has
not yet been quoted on such day, such rate on the last day on which it was
quoted by the Lender except that, if the Exchange Rate is required to
determine the outstanding amount of Advances for a purpose that does not
involve the purchase of Canadian Dollars or U.S. Dollars, the Exchange Rate
shall be the noon spot rate of the Bank of Canada on that day.
1.1.33 "Excluded Taxes" means any Taxes now or hereafter imposed,
levied, collected, withheld or assessed on the Lender by Canada or any
other jurisdiction in which the Lender is subject to Tax as a result of the
Lender (i) carrying on a trade or business in such jurisdiction or being
deemed to do so, or having a permanent establishment in such jurisdiction;
(ii) being organized under the laws of such jurisdiction; (iii) being
resident or deemed to be resident in such jurisdiction or (iv) not dealing
at arm's length with the Borrower, but does not include any sales, goods or
services Tax payable under the laws of any such jurisdiction with respect
to any goods or services made available by the Lender to the Borrower under
this Agreement.
1.1.34 "Federal Funds Effective Date" means for any period, a
fluctuating interest rate per annum equal, for each day during such period,
to the weighted average of the rates on overnight federal 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, for any day on which that rate is not published for that day
by the Federal Reserve Bank of New York, the average of the quotations for
that day for such transactions received by the Lender from three Federal
Funds brokers of recognized standing.
1.1.35 "GAAP" means generally accepted accounting principles which are
in effect from time to time in Canada, as published in the handbook of the
Canadian Institute of Chartered Accountants.
1.1.36 "GM" means General Motors Corporation and/or General Motors of
Canada Limited.
1.1.37 "Guarantee" means a guarantee or indemnity or similar agreement
delivered to the Lender by a Guarantor in a form satisfactory to the
Lender.
1.1.38 "Guarantor" means JPE, Inc. or any other person who guarantees
payment or performance of the Obligations or a part thereof.
1.1.39 "Hazardous Materials" means any hazardous substance or any
pollutant or contaminant, toxic or dangerous waste, substance or material,
as defined in or regulated by any applicable law, regulation or
governmental authority from time to time, including, without limitation,
friable asbestos and poly-chlorinated biphenyls.
1.1.40 "Interest Payment Date" means (in connection with Prime Rate
Advances and Base Rate Advances) the 22nd day of each calendar month or if
that is not a Business Day, the Business Day next following.
1.1.41 "Lease" and "Lease Agreement" means a lease or conditional sale
contract between the Borrower as lessee and the Lender or Scotia Leasing as
lessor, and includes all supporting documentation required by the Lender or
Scotia Leasing in connection with the lease or conditional sale contract in
a form satisfactory to the Lender or Scotia Leasing.
1.1.42 "Lender" means The Bank of Nova Scotia.
1.1.43 "L/C" means, a commercial letter of credit or standby letter of
credit in a form satisfactory to the Lender issued by the Lender at the
request of the Borrower in favour of a third party to secure the payment or
performance of an obligation of the Borrower to the third party.
1.1.44 " Material Adverse Change" means a material adverse change (or
a series of adverse changes, none of which is material in and of itself,
but which cumulatively, result in a material adverse change) to the
financial condition, operations, assets, business, properties or prospects
of the person in relation to whom the term is used, to the ability of such
person to perform its obligations under any of the Credit Documents, to the
ability of the Lender to enforce any of such obligations or on the status
or priority of the Security on any of the Property of such person.
1.1.45 "Maturity Date" means:
(a) with respect to Credit A, the date on which the Lender
demands payment thereof;
(b) with respect to Credit B, the earlier of December 31, 1997
and the date on which the Lender demands payment thereof;
(c) with respect to Credit C, the earlier of December 20, 2001
and the date on which the Lender demands payment thereof in accordance
with the provisions of this Agreement;
(d) with respect to Credit D, the earlier of the maturity date
described in each Lease Agreement or the date on which the Lender or
Scotia Leasing demands payment thereof in accordance with the
applicable Lease Agreement; and
(e) with respect to Credit E, the earlier of the maturity date
described in the VISA Agreement or the date on which the Lender
demands payment thereof in accordance with the provisions of the VISA
Agreement.
1.1.46 "Obligations" means all obligations of the Borrower to the
Lender under or in connection with this Agreement, including but not
limited to all debts and liabilities, present or future, direct or
indirect, absolute or contingent, matured or not, at any time owing by the
Borrower to the Lender in any currency or remaining unpaid by the Borrower
to the Lender in any currency under or in connection with this Agreement,
whether arising from dealings between the Lender and the Borrower or from
any other dealings or proceedings by which the Lender may be or become in
any manner whatever a creditor of the Borrower under or in connection with
this Agreement, and wherever incurred, and whether incurred by the Borrower
alone or with another or others and whether as principal or surety, and all
interest, fees, legal and other costs, charges and expenses related to, or
incurred in connection with, the foregoing.
1.1.47 "Order" means the vesting order referred to in the definition
of Agreement of Purchase and Sale.
1.1.48 "Operating Cash Flow" means at any time in relation to the
Borrower for any period of time an amount equal to the net income or net
loss of the Borrower before:
(i) extraordinary items and unusual items for the period;
(ii) interest and financing charges on Debt for that period;
(iii) income taxes applicable to that period; and
(iv) depreciation and amortization for that period.
1.1.49 "Patent License Agreement" means the non-exclusive license
agreement between the Borrower and JPE, Inc. (the parent of the Borrower)
covering the intellectual property incorporating the right to licence to
make, have made, use and sell throughout the United States, its territories
and possessions, and Canada and Mexico, moulded parts using the plastic
injection moulding process that falls within the scope of one or more
claims of the patents and any other knowledge rights required by the
Borrower to continue its day-to-day operations from time to time.
1.1.50 "Pending Event of Default" means an event which would
constitute an Event of Default hereunder whether or not any requirement for
giving of notice, lapse of time, or both, or any other condition subsequent
to such event, has been satisfied.
1.1.51 "Permits" means governmental licenses, authorizations,
consents, registrations, exemptions, permits and other approvals required
by law.
1.1.52 "Permitted Encumbrances" means, with respect to any person, the
following:
(a) liens for taxes, rates, assessments or other governmental
charges or levies not yet due, or for which instalments have been paid
based on reasonable estimates pending final assessments, or if due,
the validity of which is being contested diligently and in good faith
by appropriate proceedings by that person in respect of which notice
has been given by the Borrower to the Lender and in respect of which
Collateral has been delivered to the Lender if requested by the
Lender;
(b) undetermined or inchoate liens, rights of distress and
charges incidental to current operations which have not at such time
been filed or exercised and of which the Lender has been given notice,
or which relate to obligations not due or payable, or if due, the
validity of which is being contested diligently and in good faith by
appropriate proceedings by that person and in respect of which notice
has been given by the Borrower to the Lender and in respect of which
Collateral has been delivered to the Lender if requested by the
Lender;
(c) reservations, limitations, provisos and conditions expressed
in any original grants from the Crown or other grants of real or
immovable property, or interests therein, which do not in the opinion
of the Lender affect the use of the affected land for the purpose for
which it is used by that person;
(d) licenses, easements, rights-of-way and rights in the nature
of easements (including, without limiting the generality of the
foregoing, licenses, easements, rights-of-way and rights in the nature
of easements for sidewalks, public ways, sewers, drains, gas, steam
and water mains or electric light and power, or telephone and
telegraph conduits, poles, wires and cables) which will not in the
reasonable opinion of the Lender impair the use of the affected land
for the purpose for which it is used by that person;
(e) title defects or irregularities and restrictive covenants
which are of a minor nature and which in the aggregate will not in the
reasonable opinion of the Lender impair the use of the affected
property for the purpose for which it is used by that person;
(f) the right reserved to or vested in any municipality or
governmental or other public authority by the terms of any lease,
license, franchise, grant or permit acquired by that person or by any
statutory provision to terminate any such lease, license, franchise,
grant or permit, or to require annual or other payments as a condition
to the continuance thereof;
(g) the Encumbrance resulting from the deposit of cash or
securities in connection with contracts, tenders or expropriation
proceedings, or to secure workmen's compensation, unemployment
insurance, surety or appeal bonds, costs of litigation when required
by law, liens and claims incidental to current construction,
mechanics', warehousemen's, carriers' and other similar liens, and
public, statutory and other like obligations incurred in the ordinary
course of business;
(h) security given to a public utility or any municipality or
governmental authority when required by such utility or authority in
connection with the operations of that person in the ordinary course
of its business;
(i) the following security interests which are registered as of
this date in favour of Municipal Financial Leasing Corporation (for
office machines); AT & T Capital Canada Inc., for a photocopier and
sorter; Xerox Canada Ltd. for Xerox equipment; Newcourt Financial Ltd.
and Newcourt Credit Group Inc. for certain Nissan motor vehicles; and
GMAC Leaseco Ltd. for a motor vehicle;
(j) the "Kitchener Permitted Encumbrances" with respect to the
Real Property known as 000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxx and the
"Peterborough Permitted Encumbrances" with respect to the Real
Property known as 000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxx, as
those terms are defined in the Order; and
(k) other Encumbrances agreed to in writing by the Lender.
1.1.53 "Permitted Holder" means JPE, Inc., a Michigan corporation.
1.1.54 "Person" or "person" means any individual, corporation,
company, partnership, unincorporated association, trust, joint venture,
estate or other judicial entity or any governmental body or other entity of
any kind.
1.1.55 "Prime Rate" means, on any day, the greater of:
(a) the annual rate of interest expressed as a percentage per
annum announced by the Lender on that day as its reference rate for
commercial loans made by it in Canada in Canadian Dollars; and
(b) the average rate for 30 day Canadian Dollar bankers'
acceptances that appears on the Reuters Screen CDOR Page at 10:00 a.m.
Toronto time on that day, plus 3/4% per annum.
The Lender shall on request give notice to the Borrower of the Prime Rate
from time to time and such notice shall be conclusive and binding for all
purposes absent manifest error.
1.1.56 "Prime Rate Advance" means an Advance in Canadian Dollars
bearing interest based on the Prime Rate.
1.1.57 "Property" means, with respect to any person, all of its
present and future undertaking, property and assets.
1.1.58 "Real Property" means the real property described in Section
8.1 and all buildings and improvements thereon.
1.1.59 "Requirement of Law" means, as to any person, any law, treaty,
regulation, ordinance, decree, judgment, order or similar requirement made
or issued under sovereign or statutory authority and applicable to or
binding upon that person, or to which that person or any of its Property is
subject.
1.1.60 "Revolving Period" has the meaning defined in Section 2.2.
1.1.61 "Scotia Lease Base Rate" means on any day, the annual rate of
interest expressed as a percentage per annum announced by the Scotia
Leasing on that date as its reference rate for commercial lease or
conditional sale contract loans made by Scotia Leasing in Canada in
Canadian dollars.
1.1.62 "Scotia Leasing" means the business carried on by the Lender
under the name "Scotia Leasing".
1.1.63 "Section" means the designated section of this Agreement.
1.1.64 "Security" means the security held from time to time by or for
the Lender receiving or intended to secure repayment or performance of the
Obligations or a part thereof, including the security described in Section
8.1.
1.1.65 "Taxes" means all taxes, levies, imposts, stamp taxes, duties,
deductions and similar impositions (other than withholding taxes) payable,
levied, collected or assessed as of the date of this Agreement or at any
time in the future, and "Tax" shall have a corresponding meaning.
1.1.66 "Tangible Net Worth" means at any time in relation to the
Borrower, the sum of the following at that time:
(a) share capital, earned and contributed surplus and funds
payment of which are formally postponed or subordinated to payment in
full of the Obligations, less the sum of
(b) (i) amounts due from officers and affiliates of the Borrower;
plus
(ii) investments in affiliates of the Borrower; and plus
(iii) intangible assets of the Borrower as defined by the
Lender from time to time.
1.1.67 "Transaction" means the purchase by the Borrower of
substantially all of the assets of Pebra Inc. pursuant to the Agreement of
Purchase and Sale.
1.1.68 "U.S. Dollars" and "U.S. $" mean lawful money of the United
States of America.
1.1.69 "VISA Agreement" means the Lender's standard form of cardholder
agreement from time to time entered into between the Borrower or a holder
to whom, or on behalf of whom a visa card is issued, and the Lender.
ARTICLE II
CREDIT A
2.1 AMOUNT AND AVAILMENT OPTIONS
Upon and subject to the terms and conditions of this Agreement, the Lender
agrees to provide a credit for the use of the Borrower in the amount of Cdn.
$12,000,000 or the U.S. Dollar equivalent thereof. At the option of the Borrower
prior to the Maturity Date, Credit A may be used by requesting Prime Rate
Advances to be made by the Lender, by requesting Base Rate Advances to be made
by the Lender, by presenting drafts or bills of exchange to the Lender for
acceptance as Bankers' Acceptances, and by requesting that an L/C be issued by
the Lender up to an aggregate amount of Advances by way of L/C's outstanding at
any time of not more than Cdn.$1,000,000.
2.2 REVOLVING CREDIT A
Credit A is a revolving credit available at the sole discretion of the
Lender and is subject to periodic review and to no Material Adverse Change
occurring in the financial condition or the environmental condition of the
Borrower or any Guarantor. The principal amount of any Advance under Credit A
that is repaid during the Revolving Period may be reborrowed during the
Revolving Period from time to time, subject to the terms of this Agreement.
2.3 USE OF CREDIT A
Credit A shall only be used for general operating purposes of the Borrower
including assisting the Borrower in its purchase of the assets of Pebra Inc.
2.4 TERM AND REPAYMENT
All Obligations under Credit A shall, in any event, be repaid in full on or
before the Maturity Date.
2.5 EXCHANGE RATE FLUCTUATIONS
If fluctuations in rates of exchange in effect between Canadian Dollars and
U.S. Dollars cause the amount of Advances (expressed in Canadian Dollars based
on the Exchange Rate in effect from time to time) to the Borrower to exceed the
amount of Credit A, the Borrower shall pay the Lender forthwith such amount as
is necessary to repay the entire excess. If the Borrower is unable to
immediately pay that amount because Bankers' Acceptances have not matured, the
Borrower shall, forthwith, make a deposit of cash with the Lender in the amount
of the excess, and deliver an irrevocable undertaking to the Lender to use the
cash to repay the Bankers' Acceptances immediately at the end of the maturity of
the applicable Bankers' Acceptances, if the excess continues to exist at that
time. Nothing in this Section shall, however, entitle the Borrower to obtain
Advances (through rollovers, conversions or otherwise) if, after such Advances
were made, the aggregate amount of Advances outstanding would exceed the amount
of Credit A.
ARTICLE III
CREDIT B
3.1 AMOUNT AND AVAILMENT OPTIONS
Upon and subject to the terms and conditions of this Agreement, and the
delivery of a Guarantee by JPE, Inc. the Lender agrees to provide a credit for
the use of the Borrower in the amount of Cdn. $2,000,000 or the U.S. Dollar
equivalent thereof. At the option of the Borrower prior to the Maturity Date,
Credit B may be used by requesting Prime Rate Advances to be made by the Lender,
by requesting Base Rate Advances to be made by the Lender, or by presenting
drafts or bills of exchange to the Lender for acceptance as Bankers'
Acceptances.
3.2 REVOLVING CREDIT B
Credit B is a revolving credit. Subject to Section 3.4 and to the other
terms of this Agreement, the principal amount of any Advance under Credit B that
is repaid may be reborrowed from time to time.
3.3 USE OF CREDIT
Credit B shall only be used to finance the Borrower's peak operating
requirements.
3.4 TERM AND REPAYMENT
All Obligations under Credit B shall, in any event, be repaid in full on or
before the Maturity Date.
3.5 EXCHANGE RATE FLUCTUATIONS
If fluctuations in rates of exchange in effect between Canadian Dollars and
U.S. Dollars cause the amount of Advances (expressed in Canadian Dollars based
on the Exchange Rate in effect from time to time) to the Borrower to exceed the
amount of Credit B, the Borrower shall pay the Lender forthwith such amount as
is necessary to repay the entire excess. If the Borrower is unable to
immediately pay that amount because Bankers' Acceptances have not matured, the
Borrower shall forthwith make a deposit of cash with the Lender in the amount of
the excess, and deliver an irrevocable undertaking to the Lender to use the cash
to repay Bankers' Acceptances immediately at the end of the applicable maturity
of the applicable Bankers' Acceptances, if the excess continues to exist at that
time. Nothing in this Section shall, however, entitle the Borrower to obtain
Advances (through rollovers, conversions or otherwise) if, after such Advances
were made, the aggregate amount of Advances outstanding would exceed the amount
of Credit B.
ARTICLE IV
CREDIT C
4.1 AMOUNT
Upon and subject to the terms and conditions of this Agreement, the Lender
agrees to provide a credit for the use of the Borrower in the amount of Cdn.
$12,740,000. Credit C may be used by requesting Prime Rate Advances to be made
by the Lender.
4.2 NON-REVOLVING CREDIT C
Credit C is a non-revolving credit. The principal amount of any Advance
under Credit C that is repaid may not be reborrowed.
4.3 USE OF CREDIT C
Credit C shall only be used to finance the purchase by the Borrower of the
assets of Pebra Inc.
4.4 TERM AND REPAYMENT
Subject to the terms and conditions of this Agreement, Credit C is
available up to but not after January 31, 1997. The amount of Credit C undrawn
on January 31, 1997 iscancelled. The aggregate principal amount of Advances
under Credit C shall be repaid as follows:
(a) on the first day of the tenth month (in this paragraph the
"First Payment Date") after the month of the first Advance and on the
first day of each month after the First Payment Date for the next
succeeding fourteen months, the Borrower shall pay the Lender Cdn.
$100,000;
(b) on the first day of the fifteenth month after the First
Payment Date for the next succeeding thirty-five months, the Borrower
shall pay the Lender Cdn. $189,000; and
(c) on the first day of the sixtieth month after the first
Advance, the Borrower shall by pay the Lender the full amount of the
Obligations outstanding under Credit C.
4.5 PREPAYMENTS
Subject to giving two days' prior written notice to the Lender, the
Borrower may from time to time repay Advances outstanding under Credit C, in
whole or in part, without penalty. Prepayments of principal shall be applied
against installments of principal in the inverse order of their maturities.
ARTICLE V
CREDIT D
5.1 AMOUNT
Upon and subject to the terms and conditions of this Agreement, the Lender
agrees to provide a credit for the use of the Borrower in the amount of Cdn.
$2,000,000. Credit D may be used by requesting Prime Rate Advances to be made by
the Lender in amounts of not less than Cdn. $500,000 and by the Borrower
entering into a Lease Agreement. Equipment to be subject to a Lease Agreement
under this Credit D must first be acceptable to the Lender in its sole
discretion.
5.2 NON-REVOLVING CREDIT D
Credit D is a non-revolving Credit. The principal amount of any Advance
under Credit D that is repaid may not be reborrowed.
5.3 USE OF CREDIT D
Credit D shall only be used to finance the Borrower's 1997 capital
expenditure program a copy of which has been previously delivered to the Lender
in connection with the Credits.
5.4 TERM AND REPAYMENT
Subject to the terms and conditions of this Agreement, Credit D is
available up to but not after December 31, 1997. The amount of Credit D undrawn
on December 31, 1997 is cancelled. The principal amount of Advances under Credit
D shall be repaid on the earlier of the Maturity Date and the repayment
provisions contained in the applicable Lease Agreements. The term of a Lease
Agreement under Credit D shall not exceed five years.
5.5 PREPAYMENTS
The Borrower shall not have the right to prepay any Advances made under
Credit D in advance of the date on which payments are due in accordance with the
applicable Lease Agreement.
ARTICLE VI
CREDIT E AND ADDITIONAL FACILITY
6.1 AMOUNT
Upon and subject to the terms and conditions of this Agreement, the Lender
agrees to provide a credit for the use of the Borrower in the amount of Cdn.
$20,000. Credit E may be used only by the Borrower entering into a VISA
Agreement.
6.2 TERM AND REPAYMENT
Subject to the terms and conditions of this Agreement, Advances under
Credit E are available only during the period of time that Advances under Credit
A are available.
6.3 ADDITIONAL FACILITY
Subject to availability and the execution by the Borrower of an interest
swap agreement in a form satisfactory to the Lender incorporating the applicable
terms and conditions of this Agreement and the Credit Documents including the
Security and incorporating other applicable terms acceptable to the Lender, the
Borrower shall have the option until December 31, 1997, provided no Pending
Event of Default or Event of Defaulthas occurred, to enter into interest rate
swap transactions. Any such transactions shall be limited to Canadian and U.S.
dollars only, for terms not exceeding five years, with the aggregate amounts of
all outstanding transactions at any one time not to exceed Cdn. $12,740,000 or
U.S. dollar equivalent.
ARTICLE VII
ADVANCES BY THE LENDER,
INTEREST RATES AND FEES
7.1 ADVANCES BY THE LENDER
As more particularly described in Section 2.1 with respect to Credit A,
Section 3.1 with respect to Credit B, Section 4.1 with respect to Credit C,
Section 5.1 with respect to Credit D and Section 6.1 with respect to Credit E
and subject to the terms and conditions of this Agreement, the Lender will make
Advances to the Borrower by way of Prime Rate Advances, Base Rate Advances, the
acceptance of Bankers' Acceptances and the issuance of L/C's.
7.2 INTEREST RATES AND BANKERS' ACCEPTANCE FEES
Interest shall be payable as follows:
(a) on Prime Rate Advances:
(i) at the Prime Rate plus 0.625% per annum with respect to
Prime Rate Advances under Credit A;
(ii) at Prime Rate plus 1.50% per annum with respect to
Prime Rate Advances under Credit B;
(iii) at Prime Rate plus 0.875% per annum with respect to
Prime Rate Advances under Credit C and Credit D; and
(iv) at the rate set out in the VISA Agreement from time to
time with respect to Advances under Credit E;
(b) on Base Rate Advances:
(i) at the Base Rate plus 0.625% per annum with respect to
Base Rate Advances under Credit A; and
(ii) at the Base Rate plus 1.50% per annum with respect to
Base Rate Advances under Credit B;
The margin for the Bankers' Acceptance Fee calculation shall be:
(c) 0.625% per annum with respect to Bankers' Acceptances under
Credit A and;
(d) 1.50% per annum with respect to Bankers' Acceptances under
Credit B.
Notwithstanding the foregoing, after the first anniversary of the first
Advance the margin on the interest rate and Bankers' Acceptance Fees applicable
to Credit A shall be adjusted to the following:
Debt to Tangible Margin on Prime Rate Margin on Bankers'
Net Worth Ratio and Base Rate Advances Acceptance Fee
--------------- ---------------------- --------------
Under 3.0 to 1 0.500% 0.500%
Under 2.0 to 1 0.250% 0.250%
and the margin on the interest rate applicable to Credit C shall be adjusted to
the following:
Debt to Tangible Net Worth Ratio Margin on Prime Rate Advances
-------------------------------- -----------------------------
Under 3.0 to 1 0.750%
Under 2.0 to 1 0.375%
All percentage figures above represent percent per annum. Interest on Prime
Rate Advances and Base Rate Advances shall be the Prime Rate and Base Rate,
respectively, plus the relevant figure shown under the heading "Margin on Prime
Rate and Base Rate Advances" or Margin on Prime Rate Advances" above,
respectively. The margin used in the calculation of the Bankers' Acceptance Fee
shall be the relevant figure shown under "Margin on Bankers' Acceptance Fee"
above.
Every increase or decrease in the interest rate or fees resulting from a
change in the Debt to Tangible Net Worth Ratio shall be effective as of the date
on which a certificate from the Borrower satisfactory to the Lender concerning
the calculation of the ratio was due in accordance with Section 12.2, except
that if a certificate from the Borrower is late in being delivered to the
Lender, any resulting decrease shall be effective only as of the date that a
certificate satisfactory to the Lender is actually received by the Lender. Fees
relating to Bankers' Acceptances advanced before the effective date of the
decrease will not be adjusted. Notwithstanding the foregoing, the Borrower shall
pay the Lender a minimum fee of $100 per transaction involving Advances by way
of Bankers Acceptance.
7.3 FIXED RATE OPTION
The Borrower shall have the option to fix the interest rate under any Lease
Agreement entered into under Credit D for the balance of the term of that Lease
Agreement provided:
(a) no Event of Default or Pending Event of Default has occurred;
(b) written notice of the exercise of the option is delivered to
the Lender by the Borrower before the commencement of the last third
of that Lease Agreement; and
(c) the Lender's fee, to be set by the Lender from time to time,
is paid to the Lender by the Borrower at the time of the exercise of
the option.
Upon the exercise of the option, in accordance with the foregoing, the interest
rate applicable to Advances under the Lease Agreement in respect of which the
option is being exercised, shall be the Scotia Lease Base Rate in effect at the
time of the exercise of the option plus 1.750% per annum, calculated and payable
monthly, and the new rate shall be effective:
(i) from and after the next regular payment date (herein the
"Next Date") as provided for under the applicable Lease Agreement
(provided the Next Date is at least ten days after the receipt by
the Lender of the notice); or
(ii) from and after the regular payment date after the Next
Date (if the Next Date is less than ten days after the receipt of
the Lender of the notice).
7.4 L/C FEES
Fees shall be payable in respect of L/C's (which are standby letters of
credit) issued under Credit A at a rate of 1.625%, subject to the Lender's
minimum fee applicable from time to time. Fees shall be payable in respect of
L/C's (which are commercial letters of credit) issued under Credit A at rates to
be agreed from time to time between the Borrower and the Lender in advance of
the issuance of any such L/C's provided that such rates will not exceed the
rates applicable to L/C's which are standby letters of credit. Fees shall be
calculated on the face amount of the L/C's based on increments of thirty days'
or multiples thereof, from and including the issuance date, with periods of less
than thirty days being calculated as periods of thirty days. Fees are to be paid
on the issuance date of the L/C's.
7.5 FEES
The Borrower shall pay to the Lender a non-refundable fee of Cdn. $1,000:
(a) on each occasion on which the Borrower is late in providing
information to the Lender in accordance with Section 12.2.1 of this
Agreement; and
(b) on each occurrence of an Event of Default.
The fees shall be paid under paragraph (a) forthwith on each such occasion and
under paragraph (b) on the first day of the month following the occurrence of an
Event of Default and the fees shall continue to be paid on the first day of each
month thereafter while the particular occurrence continues.
The payment and collection of such fees shall not constitute an express or
implied waiver by the Lender of any provision of this Agreement or the Credit
Documents or the enforcement by the Lender or the right to enforce by the
Lender, of either this Agreement or any of the Credit Documents.
ARTICLE VIII
SECURITY
8.1 SECURITY
The Security includes the following, all in a form and substance
satisfactory to the Lender:
(a) first ranking registered general assignment of book debts of
the Borrower;
(b) first ranking security by the Borrower under Section 427 of
the Bank Act;
(c) first ranking registered demand debenture of the Borrower in
the principal amount of $35,000,000 secured by a first fixed charge
over real estate located at 000 Xxxxxxxxxx Xxxxx (xxxxxxxx Xxxx
Xxxxx), Xxxxxxxxxxxx, Xxxxxxx and 000 Xxxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxx and over all equipment machinery, vehicles and other tangible
personal property and by a floating charge over all other assets;
(d) first ranking registered general security agreement over all
Property of the Borrower;
(e) first ranking registered assignment of the Patent License
Agreement including the right of the Lender, on default by the
Borrower, to assign the Patent License Agreement to a third party
purchaser without consent to permit the third party purchaser the
right to use the intellectual property for a perpetual period at a
nominal consideration of 11/2% of the net selling price of all parts
pertaining to the patent rights relating to the "Blow-out Vent Valve"
and "Self-contained Gas Injector" referred to in Section 9.1.1 (k),
sold by or on behalf of the Licensee with an annual minimum royalty,
regardless of sales levels of such parts, of $25,000;
(f) insurance covering fire (whether by accident or arson) theft,
water damage, collapse and all other perils and risks in respect of
all of the Property of the Borrower for full replacement value with
loss payable to the Lender as its interest may appear as a first
ranking creditor and containing a mortgage clause satisfactory to the
Lender and naming the Lender as an additional named insured;
(g) comprehensive general liability and umbrella insurance in an
aggregate amount acceptable to the Lender and in an amount of not less
than $2,000,000 with respect to each occurrence for equipment under
each Lease Agreement with the umbrella to follow the form of the
comprehensive general liability portion of the policy;
(h) an operating credit line agreement with respect to Credit A,
in the Lender's standard form;
(i) a reimbursement agreement with respect to L/C's which are
standby letters of credit, in the Lender's standard form;
(j) an agreement for commercial letters of credit, in the
Lender's standard form;
(k) a Guarantee by JPE, Inc. in the principal amount of Cdn.
$2,000,000 or U.S. Dollar equivalent in a form acceptable to the
Lender with respect to, and as additional security for, Advances under
Credit B;
(l) Lease Agreements with respect to each Advance under Credit D;
(m) a Bankers' Acceptance agreement in the Lender's standard
form;
(n) an agreement of JPE, Inc. to deliver the JPE, Inc. financial
statements and certificate of JPE, Inc. referred to under Section
12.2.1 (g) and (h) to the Borrower and the Lender in a form acceptable
to the Lender; and
(nn) a postponement agreement for Cdn. $2,000,000 by JPE, Inc. in
respect of a Cdn. $2,000,000 loan by JPE, Inc. to the Borrower,
together with delivery to the Lender of the note evidencing the loan;
(o) such other documents as the Lender may or its solicitor
reasonably require;
ARTICLE IX
DISBURSEMENT CONDITIONS
9.1 DISBURSEMENT CONDITIONS
9.1.1 At or before the time of the first Advance under this Agreement,
and in any event by January 31, 1997, the Lender shall have received the
following, each in full force and effect and in form and substance
satisfactory to the Lender and its solicitors:
(a) the latest consolidated financial statements if available for
the Borrower;
(b) certified copies of the Constating Documents of the Borrower,
a certificate of incumbency of the Borrower and a certificate as to
the identity and title of the officer of each other person executing
the Credit Documents;
(c) a certified copy of the corporate proceedings taken by the
Borrower authorizing it to execute, deliver and perform its
obligations under the Credit Documents to which it is a party;
(d) evidence or documents satisfactory to the Lender which
disclose that the Encumbrances affecting the Property of the Borrower
are limited to the Permitted Encumbrances;
(e) evidence satisfactory to the Lender that all applicable fees
payable to the Lender have been paid in full;
(f) a certified copy of a Phase I and Phase II Environmental
Report with respect to the Real Property confirming, to the
satisfaction of the Lender in its sole discretion that there are no
material adverse environmental issues affecting the Real Property;
(g) a certificate of the Borrower that the Agreement of Purchase
and Sale has been completed, or will be completed, coincident with the
first Advance under this Agreement, in accordance with all of the
terms of the Agreement of Purchase and Sale without amendment or
waiver of any terms and conditions or with amendments and waivers
which have been approved in writing prior to the completion of the
Agreement of Purchase and Sale by GM and by the Lender;
(h) the certificates referred to in paragraphs 3(a), 3(d) and
3(e) of the Order and delivery of copies of the xxxx of sale and deeds
referred to in paragraphs 3(b) and 3(c) of the Order;
(i) confirmation, satisfactory to the Lender, that the provisions
of the Bulk Sales Act have been complied with respect to the
completion of the Agreement of Purchase and Sale or that the
Transaction is exempt from such provisions;
(j) evidence satisfactory to the Lender and its solicitors that
the Security has been delivered and registered as requested by the
Lender except that until Advances are requested under Credit B, the
Guarantee of JPE, Inc. is not required to have been delivered;
(k) a certificate of the Borrower that the Agreement of Purchase
and Sale entered into between JPE Inc and Pebra GmbH Xxxx Braunik with
respect to the title to all world-wide intellectual property rights
relating to the "Blow-Out Vent Valve" and "Self-contained Gas
Injector" has been completed and that JPE, Inc. is the beneficial
owner thereof and has agreed to promptly register such ownership
wherever required to reflect such ownership following the completion
of the Transaction and in any event within 90 days thereof and that
the Patent License Agreement is in full force and effect unamended;
(l) certified true copies of the written verification and
confirmation of GM referred to in paragraph 6.5 of the Agreement of
Purchase and Sale;
(m) evidence satisfactory to the Lender that there has been no
appeal of the Order; and
(n) evidence satisfactory to the Lender that the Borrower has
entered into a long term supply contract with GM which supports, in a
manner satisfactory to the Lender, the projections and pro-forma
financial statements previously supplied by the Borrower to the Lender
in connection with the Credits and a certified true copy of the said
contract;
(o) a certificate of JPE, Inc. that it is the registered and
beneficial owner of all of the issued and outstanding shares in the
capital stock of the Borrower;
(p) evidence satisfactory to the Lender that all commitment fees
payable to the Lender in connection with the Credits have been paid in
full;
(q) a certificate of the Borrower as to the Borrowing Base in a
form and substance satisfactory to the Lender;
(r) an opening draft balance sheet of the Borrower reflecting
actual values of the Property acquired under the Agreement of Purchase
and Sale;
(s) the opinions of counsel to the Borrower and addressed to the
Lender and to Messrs. Xxxxxx & Elliot, substantially in the form
attached as Schedule A;
(t) the opinion of Messrs. Xxxxxx & Xxxxxx, addressed to the
Lender in a form satisfactory to the Lender; and
(u) all other documents reasonably required by the Lender to give
effect to the terms of this Agreement including the Security.
9.1.2 The obligation of the Lender to make the first Advance is
subject to the Lender being satisfied that no Material Adverse Change has
occurred in the financial position or condition of the Borrower.
9.1.2.1 The obligation of the Lender to make the first Advance under
Credit B is subject to the disbursement conditions contained in Section
9.1.1 having been met to the Lender's satisfaction, the Lender having
satisfied that no Material Adverse Change has occurred in the financial
position or condition of the Borrower or of the Guarantor and to the
Lender's having received the following, each in full force and effect, and
in form and substance satisfactory to the Lender and its solicitors:
(a) the Guarantee of JPE, Inc. referred to in Section 8.1 (l);
(b) certified copies of the Constating Documents of the
Guarantor, a certificate of incumbency of the Borrower and a
certificate as to the identity and title of the officer of each other
person executing the Credit Documents;
(c) a certified copy of the corporate proceedings taken by the
Guarantor authorizing it to execute, deliver and perform its
obligations under the Guarantee;
(d) opinions of counsel to the Guarantor addressed to the Lender,
the Lender's United States counsel and to Messrs. Xxxxxx & Elliot, in
a form satisfactory to the Lender's United States counsel and to
Messrs. Xxxxxx & Xxxxxx;
(e) all other documents reasonably required by the Lender to give
effect to the Guarantee.
9.1.3 CONDITIONS PRECEDENT TO ALL ADVANCE
The obligation of the Lender to make any Advance is subject to the
conditions precedent that:
(a) no Event of Default or Pending Event of Default has occurred
and is continuing on the Drawdown Date, or would result from making
the Advance;
(b) the Lender has received timely notice as required under
Section 10.4 (except only with respect to the first Advance); and
(c) all other terms and conditions of this Agreement upon which
the Borrower may obtain an Advance are fulfilled.
ARTICLE X
ADVANCES
10.1 PRIME RATE AND BASE RATE ADVANCES
Upon timely fulfilment of all applicable conditions as set forth in this
Agreement, the Lender, in accordance with the procedures set forth in Section
10.4, will make the requested amount of a Prime Rate Advance or Base Rate
Advance available to the Borrower on the Drawdown Date requested by the Borrower
by crediting the Designated Account with such amount. The Borrower shall pay
interest to the Lender at the Branch of Account on any such Advances outstanding
from time to time hereunder at the applicable rates of interest specified in
Section 7.2.
Interest on Prime Rate Advances and Base Rate Advances shall be payable
monthly in arrears on each Interest Payment Date. All interest shall accrue from
day to day and shall be payable in arrears for the actual number of days elapsed
from and including the date of Advance or the previous date on which interest
was payable, as the case may be, to, but excluding the date, on which interest
is payable, both before and after maturity, default and judgment, with interest
on overdue interest at the same rate payable on demand.
Interest calculated with reference to the Prime Rate shall be calculated
monthly on the basis of a calendar year. Interest calculated with reference to
the Base Rate shall be calculated monthly on the basis of a year of 360 days.
Each rate of interest which is calculated with reference to a period (the
"deemed interest period") that is less than the actual number of days in the
calendar year of calculation is, for the purposes of the Interest Act (Canada),
equivalent to a rate based on a calendar year calculated by multiplying such
rate of interest by the actual number of days in the calendar year of
calculation and dividing by the number of days in the deemed interest period.
10.2 EVIDENCE OF INDEBTEDNESS
The indebtedness of the Borrower resulting from Prime Rate Advances and
Base Rate Advances made by the Lender shall be evidenced by records maintained
by the Lender. The Lender shall also maintain records relating to Bankers'
Acceptances that it has accepted. The records maintained by the Lender shall
constitute, in the absence of manifest error, prima facie evidence of the
indebtedness of the Borrower to the Lender and all details relating thereto. The
failure of the Lender to correctly record any such amount or date shall not,
however, adversely affect the obligation of the Borrower to pay amounts due
hereunder to the Lender in accordance with this Agreement.
10.3 CONVERSIONS
Subject to the other terms of this Agreement including, without limitation
terms applicable to the minimum amount of each Advance, the Borrower may from
time to time convert all or any part of the outstanding amount of any Advance
under one of the Credits into another form of Advance permitted by this
Agreement under the same Credit.
10.4 NOTICE OF ADVANCES
The Borrower shall give the Lender irrevocable written notice of any
request for any Advance under the Credits. The written notice with respect to
any request for any Advance under Credit D shall contain all reasonable details
of the purpose of such advance.
Notice shall be given at least two Business Days prior to the date of any
Advance of Cdn. $5,000,000 or over except that Notice shall be given in respect
of an Advance by way of L/C at such earlier time as the Lender may reasonably
require so that it has sufficient time to review the proposed form of L/C.
Notices shall be given not later than 11:00 a.m. (Toronto time) on the date
for notice. If a notice is not given or made by that time, it shall be deemed to
have been given or made on the next Business Day.
10.5 PREPAYMENTS
The Borrower may only repay Advances outstanding under the Credits without
penalty as permitted under this Agreement. Bankers' Acceptances and L/C's may
not be paid prior to their maturity dates.
10.6 FORM OF BANKERS' ACCEPTANCES
To facilitate the acceptance of Bankers' Acceptances hereunder, the
Borrower shall from time to time as required by the Lender, provide the Lender
with an appropriate number of executed drafts drawn in blank by the Borrower and
satisfactory to the Lender. Any such draft or Bankers' Acceptance may be dealt
with by the Lender to all intents and purposes and shall bind the Borrower as if
issued by the Borrower, and the Borrower shall hold the Lender harmless and
indemnified against all loss, costs, damages and expenses arising out of the
payment or negotiation of any such draft or Bankers' Acceptance. The Lender
shall not be liable for its failure to accept a Bankers' Acceptance as required
hereunder if the cause of such failure is, in whole or in part, due to the
failure of the Borrower to provide executed drafts to the Lender on a timely
basis.
The receipt by the Lender of a request for an Advance by way of Bankers'
Acceptances shall be the Lender's sufficient authority to complete, and the
Lender shall, subject to the terms and conditions of this Agreement, complete
the pre-signed forms of drafts in accordance with such request and the drafts so
completed shall thereupon be deemed to have been presented for acceptance.
10.7 SALE OF BANKERS' ACCEPTANCES
Subject to the option of the Lender to purchase the Borrower's drafts which
it has accepted, it shall be the responsibility of the Borrower to arrange, in
accordance with normal market practice, for the sale or distribution on each
Drawdown Date of the Bankers' Acceptances issued by the Borrower.
The Borrower shall advise the Lender as soon as possible and in any event
not later than 11:00 a.m. (Toronto time) on the Drawdown Date of the price
payable for each such Bankers' Acceptance by the purchaser thereof and the
person who will be paying such price to and taking delivery of such Bankers'
Acceptances from the Lender. The Lender is hereby authorized to release each
Bankers' Acceptance accepted by it to such person on receipt of an amount equal
to such price.
The Lender will make the net proceeds of the requested Advance by way of
Bankers' Acceptances received by it available to the Borrower on the Drawdown
Date by crediting the Designated Account with such amount.
10.8 SIZE AND MATURITY OF BANKERS' ACCEPTANCES AND ROLLOVERS
Each Advance of Bankers' Acceptances shall be in an aggregate amount of not
less than $100,000 and in a whole multiple of $100,000 and each Bankers'
Acceptance shall be in the amount of $100,000 or U.S. $100,000 or whole
multiples thereof. Each Bankers' Acceptance shall have a term of 30 days or more
up to 180 days after the date of acceptance of the draft by the Lender subject
to market availability, but no Bankers' Acceptance may mature on a date which is
not a Business Day or on a date which is later than the applicable Maturity
Date. The face amount at maturity of a Bankers' Acceptance, may be renewed as a
Bankers' Acceptance or converted into another form of Advance permitted by this
Agreement.
10.9 ISSUANCE AND MATURITY OF L/C'S
A request for an Advance by way of L/C shall be made by the Borrower to the
Lender in accordance with Section 10.4. A request shall include the details of
the L/C to be issued. The Lender shall notify the Borrower of any comment
concerning the form of the L/C requested by the Borrower and shall, if the
Borrower is otherwise entitled to an Advance, issue the L/C to the Borrower at
the Branch of Account or as soon as the Lender is satisfied with the form of L/C
to be issued.
Each L/C issued under this Agreement shall have a term which is not more
than 360 days after its issuance date or renewal date. An L/C may be renewed by
the Borrower subject to complying with the terms of this Agreement applicable to
an Advance by way of L/C.
10.10 PROHIBITED USE OF BANKERS' ACCEPTANCES AND L/C'S
The Borrower shall not enter into any agreement or arrangement of any kind
with any person to whom Bankers' Acceptances or L/C's have been delivered
whereby the Borrower undertakes to replace such Bankers' Acceptances or L/C's on
a continuing basis with other Bankers' Acceptances or L/C's, nor shall the
Borrower directly or indirectly take, use or provide Bankers' Acceptances or
L/C's as security for loans or Advances from any other person.
10.11 PAYMENT OF BANKERS' ACCEPTANCES
The Borrower shall provide for the payment to the Lender at the Branch of
Account of the full face amount of each Bankers' Acceptance on the earlier of
(i) its date of maturity and (ii) the date on which the Lender gives notice to
the Borrower pursuant to Section 13.2. The Lender shall be entitled to recover
interest from the Borrower at a rate of interest per annum equal to the rate
applicable to Prime Rate Advances under Credit A, compounded monthly, upon any
amount payment of which has not been provided for by the Borrower in accordance
with this Section, with respect to Bankers' Acceptances. Interest shall be
calculated from and including the date of maturity of such Bankers' Acceptance
up to but excluding the date such payment, and all interest thereon, both before
and after demand, default and judgment, is provided for by the Borrower.
10.12 PAYMENT OF L/C'S
The Borrower shall provide for the payment to the Lender at the Branch of
Account for the account of the Lender of the full face amount of each L/C (or
the amount actually paid in the case of a partial payment) on the earlier of (i)
the date on which the Lender makes a payment to the beneficiary of an L/C, and
(ii) the date on which the Lender gives notice to the Borrower pursuant to
Section 13.2. The Lender shall be entitled to recover interest from the Borrower
at a rate of interest per annum equal to the rate applicable to Prime Rate
Advances under Credit A, compounded monthly, upon any amount payment of which
has not been provided for by the Borrower in accordance with this Section.
Interest shall be calculated from and including the date on which the Lender
makes a payment to the beneficiary of an L/C, up to but excluding the date such
payment, and all interest thereon, both before and after demand, default and
judgment, is provided for by the Borrower.
The obligation of the Borrower to reimburse the Lender for a payment to a
beneficiary of an L/C shall be absolute and unconditional, except for matters
arising from the Lender's wilful misconduct or negligence, and shall not be
reduced by any demand or other request for payment of an L/C (hereinafter called
a "Demand") paid or acted upon in good faith and in conformity with Canadian
laws, regulations or customs applicable thereto being invalid, insufficient,
fraudulent or forged, nor shall the Borrower's obligation be subject to any
defence or be affected by any right of set-off, counterclaim or recoupment which
the Borrower may now or hereafter have against the beneficiary, the Lender or
any other person for any reason whatsoever, including the fact that the Lender
paid a Demand or Demands (if applicable) aggregating up to the amount of the L/C
notwithstanding any contrary instructions from the Borrower to the Lender or the
occurrence of any event including, but not limited to, the commencement of legal
proceedings to prohibit payment by the Lender of a Demand. Any action, inaction
or omission taken or suffered by the Lender under or in connection with an L/C
or any Demand, if in good faith and in conformity with Canadian laws,
regulations or customs applicable thereto shall be binding on the Borrower and
shall not place the Lender under any resulting liability to the Borrower.
Without limiting the generality of the foregoing, the Lender may receive,
accept, or pay as complying with the terms of the L/C, any Demand otherwise in
order which may be signed by, or issued to, any administrator, executor, trustee
in bankruptcy, receiver or other person or entity acting as the representative
or in place of, the beneficiary.
If the Borrower provides cash in response to a notice given under Section
13.2, the Borrower shall be entitled to receive interest on the cash provided in
accordance with Section 14.13 as long as the cash is held as Collateral.
10.13 DEEMED ADVANCE
Except for amounts which are paid from the proceeds of rollovers of a
Bankers' Acceptance, any amount which the Lender pays to any third party on or
after the date of maturity of a Bankers' Acceptance in satisfaction thereof or
which is owing to the Lender in respect of such a Bankers' Acceptance on or
after the date of maturity of such a Bankers' Acceptance, shall be deemed to be
a Prime Rate Advance to the Borrower under Credit A under this Agreement. Except
for amounts which have been funded by the Borrower, any amount which the Lender
pays to any third party in respect of an L/C in satisfaction or partial
satisfaction; thereof shall be deemed to be a Prime Rate Advance under Credit A.
Interest shall be payable all on such Prime Rate Advances in accordance with the
terms applicable to Prime Rate Advances.
10.14 WAIVER
The Borrower shall not claim from the Lender any days of grace for the
payment at maturity of any Bankers' Acceptances presented and accepted by the
Lender pursuant to this Agreement. The Borrower waives any defence to payment
which might otherwise exist if for any reason a Bankers' Acceptance shall be
held by the Lender in its own right at the maturity thereof, and the doctrine of
merger shall not apply to any Bankers' Acceptance that is at any time held by a
Lender in its own right.
10.15 DEGREE OF CARE
Any executed drafts to be used as Bankers' Acceptances which are delivered
to the Lender shall be held in safekeeping with the same degree of care as if
they were the Lender's own property, and shall be kept at the place at which
such drafts are ordinarily held by the Lender.
10.16 INDEMNITY
The Borrower shall indemnify and hold the Lender harmless from any loss or
expense with respect to any Bankers' Acceptance dealt with by the Lender, or any
of them, but shall not be obliged to indemnify the Lender for any loss or
expense caused by the negligence or wilful misconduct of the Lender.
10.17 OBLIGATIONS ABSOLUTE
The obligations of the Borrower with respect to Bankers' Acceptances under
this Agreement shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of any draft
accepted by the Lender as a Bankers' Acceptance; or
(ii) the existence of any claim, set-off, defence or other
right which the Borrower may have at any time against the holder
of a Bankers' Acceptance, the Lender or any other person or
entity, whether in connection with this Agreement or otherwise.
10.18 SHORTFALL ON DRAWDOWNS, ROLLOVERS AND CONVERSIONS
The Borrower agrees that:
(a) the difference between the amount of an Advance requested by
the Borrower by way of Bankers' Acceptances and the actual proceeds of
the Bankers' Acceptances;
(b) the difference between the actual proceeds of a Bankers'
Acceptance and the amount required to pay a maturing Bankers'
Acceptance if a Bankers' Acceptance is being rolled over; and
(c) the difference between the actual proceeds of a Bankers'
Acceptance and the amount required to repay any Advance which is being
converted to a Bankers' Acceptance;
shall be funded and paid by the Borrower from its own resources, by 11:00 a.m.
on the day of the Advance or may be advanced as a Prime Rate Advance under the
Credits if the Borrower is otherwise entitled to an Advance under the Credits.
ARTICLE XI
REPRESENTATIONS AND WARRANTIES
11.1 REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender that:
(a) the Borrower is a duly incorporated or amalgamated, as the
case may be, and validly existing corporation and has the corporate
power and authority to enter into and perform its obligations under
any Credit Documents to which it is a party from time to time, to own
its Property and to conduct the business in which it is currently
engaged;
(b) the Borrower holds all Permits required to enter into,
perform and comply with its obligations under any Credit Documents to
which it is a party, to own its Property and to conduct the business
in which it is engaged, the Permits are valid and subsisting and the
Borrower is in compliance with all provisions thereof and not in
violation of any material provisions thereof;
(c) the entering into and the performance by the Borrower of the
Credit Documents to which it is a party from time to time (i) have
been or will be duly authorized by all necessary corporate action on
its part, and (ii) do not or will not violate its Constating
Documents, any Requirement of Law, or any Contract to which it is a
party does not require the consent or concurrence of any person who
has not consented or concurred;
(d) the Constating Documents of the Borrower (which include a
sole shareholders agreement) do contain restrictions on the power of
its directors to borrow money or give financial assistance by way of
guarantee and the provisions of the agreement have been complied with
in connection with this Agreement and the Credit Documents;
(e) the Credit Documents to which the Borrower is a party from
time to time have been or will be duly executed and delivered by it
and constitute legal, valid and binding obligations enforceable
against it in accordance with their respective terms, subject to the
availability of equitable remedies, the effect of bankruptcy,
insolvency and similar laws affecting the rights of creditors
generally;
(f) as of the date of execution of this Agreement, there are no
litigation, arbitration or administrative proceedings outstanding and
there are no proceedings pending or threatened, against the Borrower
which could materially and adversely affect the ability of the
Borrower to perform its obligations under the Credit Documents;
(g) no Event of Default or Pending Event of Default has occurred
and is continuing;
(h) it is not in violation of any term of its Constating
Documents and is not in violation of any Permit, Requirement of Law or
Contract and the execution, delivery and performance of any Credit
Documents to which the Borrower is a party from time to time will not
result in any such violation;
(i) all of its quarterly and annual financial statements as and
when they are furnished to the Lender in connection with this
Agreement are complete and fairly present the financial position of
the subject thereof as of the dates referred to therein and have been
prepared in accordance with GAAP;
(j) (i) as of the date of execution of this Agreement, it has no
liabilities (contingent or other) or other obligations of the
type required to be disclosed in accordance with GAAP which are
not fully disclosed on its financial statements provided to the
Lender other than liabilities and obligations incurred in the
ordinary course of its business and the Obligations;
(ii) it has no liabilities (contingent or other) or other
obligations of the type required to be disclosed in accordance
with GAAP which are not fully disclosed on its financial
statements provided to the Lender for its latest fiscal year and
on its unaudited financial statements provided to the Lender for
its latest fiscal period, other than liabilities and obligations
incurred in the ordinary course of its business and the
Obligations;
(k) no Property of the Borrower is subject to an Encumbrance
except a Permitted Encumbrance and the Borrower is not in default
under any of the Permitted Encumbrances relating to it;
(l) (i) there are no Hazardous Materials located on, above or
below the surface of any land which it occupies or controls,
except those being stored in compliance with applicable laws, or
contained in the soil or water constituting such land; and
(ii) no release, spill, leak, emission, discharge, leaching,
dumping or disposal of Hazardous Materials has occurred on or
from such land which, in any such case, could materially and
adversely affect the financial condition of the Borrower or the
ability of the Borrower to perform its obligations under the
Credit Documents to which it is a party from time to time;
(m) its business and Property are being operated in substantial
compliance with applicable laws intended to protect the environment
(including, without limitation, laws respecting the disposal or
emission of Hazardous Materials) and there are no breaches thereof and
no enforcement actions in respect thereof are threatened or pending
which could affect the ability of the Borrower or any Subsidiary to
perform its obligations under the Credit Documents to which it is a
party from time to time;
(n) the Borrower is conducting its operation, business or
activities in substantial compliance with all applicable laws and as
permitted by, and in accordance with, its respective Constating
Documents;
(o) there is no fact that it has not been disclosed to the Lender
in writing that adversely affect the ability of the Borrower to
perform its obligations under the Credit Documents to which it is a
party from time to time;
(p) as of the date of execution of this Agreement, the Borrower
has no credit facilities with banks or similar lending institutions,
or other lenders apart from the Credits and the Permitted Encumbrances
described in Section 1.1.52 (i);
(q) since the date of the first Advance and except as disclosed
to the Lender in writing, the Borrower has not entered into any
transaction or agreement with any person other than on commercially
reasonable terms and within the limitation of this Agreement and the
Credit Agreements;
(r) attached to this Agreement as Schedule "C" is a list of every
trademark, trademark application, trade name, certification xxxx,
patent, patent application, copyright and industrial design
(collectively, "Intellectual Property") which will in the future be
used by the Borrower in its business and the offices (if any) in which
the same is registered (being the only offices where such registration
is necessary to preserve the rights thereto) and the applicable expiry
dates of any registrations as well as the name of each Person who is a
registered holder of any of the Intellectual Property and the
Intellectual Property listed in Schedule "C" and all other
Intellectual Property which is being or will be used by the Borrower
in its business, is owned by the Borrower with the sole and exclusive
right to use the same, except as noted on Schedule "C", the conduct of
the business of the Borrower does not infringe the Intellectual
Property of any other Person;
(s) the only pension plans (the "plans") provided by the Borrower
are those referred to in Schedule "D" and:
(i) the plans are or will be within 30 days of the
completion of the Transaction registered under and are in
compliance with the Income Tax Act (Canada), the Pension Benefits
Act (Ontario) and all other Requirement of Law and all reports,
returns and filings required to be made thereunder have been
made;
(ii) the plans have been at all times administered in
accordance with the terms and the provisions of the Requirement
of Law;
(iii) except for the plan covering the members of Locals
1987 and 1524 of the Canadian Autoworkers Union, there areno
unfunded liabilities under the plans and, without limiting the
generality of the foregoing, there is no going concern unfunded
actuarial liability, past service unfunded actuarial liability or
insolvency deficiency; and
(iv) the Borrower has not received any payment of surplus
from any of the plans;
(t) the Borrower has provided to the Lender all information
which, acting reasonably, the Borrower determined is material relating
to the financial condition, business and prospects (including
forecasts and budgets) of the Borrower and all such information is
true, accurate and complete in all material respects and omits no
material fact necessary to make such information not misleading and
the forecasts and budgets provided to the Lender in connection with
its approval of this Agreement are in the judgment of the directors
and senior management prepared prudently and upon reasonable
assumptions;
(u) the Borrower has:
(i) delivered, or caused to be delivered, all required
income tax returns, sales, property, franchise and value-added
tax returns and other tax returns to the appropriate governmental
bodies; and
(ii) withheld and collected all Taxes required to be
withheld and collected by it and remitted such Taxes when due to
the appropriate governmental bodies; and no assessment, appeal or
claim is, as far as the Borrower is aware, being asserted or
processed with respect to such claim, Taxes or obligations;
(v) all of the issued and outstanding shares in the capital stock
of the Borrower are beneficially owned by JPE, Inc.
11.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Unless expressly stated to be made as of a specific date, the
representations and warranties made in this Agreement shall survive the
execution of this Agreement and all other Credit Documents, and shall be deemed
to be repeated each and every day while any of the Obligations are outstanding,
subject to modifications which may be made by the Borrower to the Lender in
writing and accepted in writing by the Lender. The Lender shall be deemed to
have relied upon such representations and warranties as a condition of making an
Advance hereunder or continuing to extend the Credits hereunder.
ARTICLE XII
COVENANTS AND CONDITIONS
12.1 POSITIVE COVENANTS
12.1.1 During the term of this Agreement, the Borrower shall:
(a) duly and punctually pay the Obligations at the times and
places and in the manner required by the terms thereof;
(b) keep proper books of account and record, maintain its
corporate status in all jurisdictions where it carries on business and
operate its business and Property in accordance with sound business
practice and in substantial compliance with all applicable
Requirements of Law and Contracts, and promptly provide the Lender
with all information reasonably requested by the Lender from time to
time concerning its financial condition;
(c) at all times and with reasonable frequency upon notice,
permit representatives of the Lender to inspect any of its Property
and to examine its financial books, accounts and records and to
discuss its financial condition with its senior officers and its
auditors, the expense of all of which shall be paid by the Borrower;
(d) keep insured with financially sound insurance companies
acceptable to the Lender all of its Property in amounts and against
losses, including property damage, public liability and business
interruption, to the extent that such Property and assets are usually
insured or as the Lender may otherwise require, and cause the policies
of insurance referred to above to contain a standard mortgage clause
and other customary endorsements for the benefit of the Lender, all in
a form acceptable to the Lender, and a provision that such policies
will not be amended in any manner which is prejudicial to the Lender
or be cancelled without thirty days prior written notice being given
to the Lender by the issuers thereof, cause the Lender to be named as
an additional insured with respect to public liability and cause all
of the proceeds of insurance under the policies to be paid to the
Lender to the extent of the Obligations;
(e) provide the Lender promptly with such evidence of the
insurance as the Lender may from time to time reasonably require;
(f) obtain, as and when required, all Permits and Contracts which
may be required to permit it to acquire, own, operate and maintain its
business and Property and perform its obligations under the Credit
Documents to which it is a party, preserve and maintain those Permits
and Contracts and all such Permits and Contracts now held by it in
good standing;
(g) pay all Taxes as they become due and payable unless they are
being contested in good faith by appropriate proceedings and it has
made arrangements satisfactory to the Lender in respect of payment of
the contested amount including the lodging of Collateral with the
Lender;
(h) immediately notify the Lender of any Event of Default or
Pending Event of Default of which it becomes aware;
(i) immediately notify the Lender on becoming aware of the
occurrence of any litigation, dispute, arbitration, proceeding or
other circumstance affecting the Borrower in respect of which there is
a possibility of a result materially adverse to the Borrower that
could have a material adverse effect on the financial condition of the
Borrower, or the ability of the Borrower to perform its obligations
under the Credit Documents to which it is a party from time to time,
and from time to time provide the Lender with all information
requested by the Lender concerning the status thereof;
(j) immediately notify the Lender (including in the notification
the intended action to be taken by the Borrower); upon:
(i) learning of any environmental claim, complaint, notice
or order affecting it;
(ii) learning of the existence of Hazardous Materials
located on, above or below the surface of any land which it
occupies or controls (except those being stored, used or
otherwise handled in compliance with applicable Requirements of
Law), or contained in the soil or water constituting such land;
and
(iii) the occurrence of any reportable release, spill, leak,
emission, discharge, leaching, dumping or disposal of Hazardous
Materials that has occurred on or from such land which, as to
either (i), (ii) or (iii), could have a material adverse effect
on the financial condition of the Borrower, or the ability of the
Borrower to perform its obligations under this Agreement, or the
Credit Documents to which it is a party from time to time;
(iv) any change in business activity conducted by the
Borrower which involves the use or handling of Hazardous
Materials or wastes or increases the environmental liability of
the Borrower in any material manner;
(v) any proposed change in the use or occupation of the
Property of the Borrower which may cause a material adverse
environmental impact;
(jj) conduct all environmental material activities which a
commercially reasonable person would perform in similar circumstances
to meet its environmental responsibilities and to undertake, at the
Borrower's expense, any environmental investigations, assessments or
remedial activities with respect to any Property of the Borrower that
the Lender may reasonably request;
(k) immediately notify the Lender upon becoming aware of any
proposed change or change in name or jurisdiction of incorporation or
amalgamation of the Borrower or of any proposed change or change in
the senior operating manager of the Borrower;
(l) provide the Lender immediately upon the filing or delivery
thereof with copies of all reports, notices and all other documents
filed with or delivered to any securities commission or stock
exchange;
(m) pay to the Lender upon the closing of the disposition of
Property which is comprised of fixed assets (i) valued at more than
Cdn. $25,000 for any one disposition and (ii) valued at more than Cdn.
$250,000 in the aggregate during a fiscal year of the Borrower, the
proceeds thereof which amounts shall be applied by the Lender to
reduce Advances outstanding first under Credit C and which amount
shall have the effect of permanently reducing the amount of Credit C
by an equal amount, unless the Borrower first demonstrates to the
Lender that all such proceeds are being reinvested directly into fixed
assets, satisfactory to the Lender, of the Borrower;
(n) upon the request of the Lender, use its best efforts to
provide the Lender with such other documents, opinions, consents,
acknowledgments and agreements as are reasonably necessary to
implement, and monitor compliance with, this Agreement from time to
time;
(o) conduct all of its banking services business with the Lender
provided such services are provided at competitive pricing; and
(p) shall have bank accounts only with the Lender, except for a
payroll account used only for payroll purposes currently at another
banking institution, which account the Borrower has agreed to move
within six months from the date hereof to the Lender, provided the
Lender's payroll services are provided at competitive prices.
12.1.1.1 If the Borrower notifies the Lender of any specified activity
or change or provides the Lender with any information pursuant to Section
12.1.1(j) or if the Lender receives any environmental information from
other sources, the Lender, in its sole discretion, may decide that an
adverse change in environmental condition of the Borrower or any of the
Property or business activities of the Borrower has occurred which decision
will constitute in the absence of manifest error, conclusive evidence of
the adverse change. Following this decision being made by the Lender, the
Lender shall notify the Borrower of the Lender's decision concerning the
adverse change.
If the Lender decides or is required to incur expenses in compliance
or to verify the Borrower's compliance with applicable environmental or
other regulations, the Borrower shall indemnify the Lender in respect of
such expenses, which will constitute further Prime Rate Advances under
Credit A by the Lender to the Borrower under this Agreement.
12.1.2 During the term of this Agreement, the Borrower shall ensure:
(a) that its Tangible Net Worth is maintained at a minimum of
Cdn. $5,000,000 at all times;
(b) that the ratio of its Current Assets to Current Liabilities
is maintained at not less than 0.95 to 1 or better at the end of each
month from and after the date of this Agreement and improving to, and
is maintained at, not less than 1 to 1 at the end of each month
commencing December 1, 1997 and at the end of each month thereafter;
and
(c) that its Debt to Tangible Net Worth Ratio does not exceed
6.50 to 1, improving to 4.50 to 1 by December 31, 1997 and improving
to 3 to 1 by December 31, 1998;
For the purpose of this Section 12.2, the amounts used to determine whether
the financial covenants are being maintained shall be the monthly and
yearly financial statements to be provided by the Borrower under Section
12.2.1 provided such statements are in a form and substance satisfactory to
the Lender and have been prepared according to GAAP.
12.1.3 During the term of this Agreement, the Borrower shall ensure
that at any time the amount of Advances outstanding under Credit A do not
exceed the Borrowing Base at that time.
12.2 REPORTING REQUIREMENTS
12.2.1 During the term of this Agreement, the Borrower shall:
(a) by February 10, 1997 cause to be prepared and delivered an
opening balance sheet reflecting actual values of the Property
acquired under the Agreement of Purchase and Sale;
(b) as soon as practicable and in any event within 40 days of the
end of each month up to June 30, 1997 and within 30 days of the end of
each month thereafter, cause to be prepared and delivered to the
Lender, in comparative form and in a form satisfactory to the Lender,
the interim unaudited financial statements of the Borrower as at the
end of such month including, without limitation, balance sheet,
statement of income and retained earnings and statement of changes in
financial position, all of which shall be prepared in accordance with
GAAP;
(c) as soon as possible and in any event within 40 days of the
end of each month up to June 30, 1997 and within 30 days of the end of
each month thereafter:
(i) cause to be prepared and delivered to the Lender in a
form satisfactory to the Lender a statement of security in the
Lender's usual form with information on the Borrower's inventory,
accounts receivable and accounts payable;
(ii) cause to be prepared and delivered to the Lender in a
form satisfactory to the Lender monthly aged listing of accounts
receivable and payable of the Borrower; and
(iii) if requested by the Lender, cause to be prepared and
delivered to the Lender in a form satisfactory to the Lender a
report containing details of releases from GM and other customers
for the ensuing month;
(d) as soon as practicable and in any event within 90 days after
the end of each of its respective fiscal years, cause to be prepared
and delivered to the Lender, in comparative form and in a form
satisfactory to the Lender, the signed annual financial statements of
the Borrower which shall be audited by an internationally recognized
accounting firm including, without limitation, balance sheet,
statement of income and retained earnings and statement of changes in
financial position for such fiscal year-end, profit and loss
statement, all of which shall be prepared in accordance with GAAP;
(e) concurrently with the delivery of its monthly and annual
financial statements, provide the Lender with a compliance certificate
in the form annexed hereto as Schedule B;
(f) concurrently with the delivery of its annual financial
statements, provide the Lender with an annual cash flow projection and
capital expenditure projection for its next succeeding fiscal year in
a form satisfactory to the Lender;
(g) cause to be delivered within 120 days of each year-end of
JPE, Inc., the signed audited financial statements of JPE, Inc.;
(h) cause to be delivered within 45 days of the end of each
quarter, a certificate of JPE, Inc. signed by the Chief Financial
Officer of JPE, Inc. certifying that JPE, Inc. is not in default or
contravention of any of the terms and conditions of JPE, Inc.'s credit
agreement with Comerica Bank.
If there is any material change in a subsequent period from the accounting
policies, practices and calculation methods used by the Borrower in
preparing its financial statements, or components thereof, the Borrower
shall provide the Lender with all information which the Lender reasonably
requires to ensure that reports provided to the Lender after any change are
comparable to previous reports.
12.3 NEGATIVE COVENANTS
12.3.1 During the term of this Agreement, the Borrower shall not,
without the prior written consent of the Lender:
(a) sell, lease, alienate or otherwise dispose of the whole or
any part of its Property other than in the ordinary course of its
business except in compliance with Section 12.1.1 (m);
(b) amend its Constating Documents, consolidate, amalgamate or
merge with any other person, enter into any corporate reorganization
or other transaction intended to effect or otherwise permit a change
in its existing corporate or capital structure, liquidate, wind-up or
dissolve itself, or permit any liquidation, winding-up or dissolution;
(c) change its name without providing the Lender with 30 days
prior written notice thereof;
(d) create, incur, assume, cause or permit any Encumbrance upon
or in respect of any of its Property, except for Permitted
Encumbrances and except for purchase money security interests which
may be required by the Borrower to finance the acquisition of
equipment or fixed assets if the Lender is unable to match pricing on
such financing, provided the acquisition is in compliance with all
other terms and conditions of this Agreement;
(e) except as may be permitted under this Agreement, create,
incur, assume or permit any Debt to remain outstanding, other than the
Obligations;
(f) (i) pay royalties, dividends, issue bonuses on capital stock,
redeem or purchase capital stock, or engage in any other method
of returning capital to shareholders of the Borrower;
(ii) make loans, advances or other distributions of funds to
shareholders of the Borrower;
except that royalties, dividends, bonuses on capital stock,
redemptions or purchases of capital stock or other methods of
returning capital to shareholders, loans, advances or other
distributions of funds to shareholders and royalties may be made
or paid provided;
(iii) no Event of Default or Pending Event of Default has
occurred or is continuing, or would occur as a result;
(iv) the Debt to Tangible Net Worth Ratio is less than 3 to
1 based on the latest year-end audited financial statements of
the Borrower; and
(v) the Borrower has demonstrated to the Lender's
satisfaction in the Lender's sole discretion, an ability to
continue to meet all of the terms and conditions of the Credits
during the next ensuing year based upon the Borrower's
projections and provided residual;
(vi) dividend payments, if permitted by the Lender, shall
not exceed the lesser of:
(x) Borrower's Operating Cash Flow for the said latest
year-end less, taxes other than deferred taxes, all
interest, principal debt repayments and capital
expenditures, plus or minus (as the case may be) increases
or decreases (as the case may be) working capital for the
said latest year-end; and
(y) 30% of net income after payment of taxes based on
the Borrower's latest audited year-end financial statement,
all in accordance with GAAP; and
(vii) if the Debt to Tangible Net Worth Ratio is more than 3
to 1 based on the latest year end audited financial statements of
the Borrower, royalties of a maximum of $100,000 per year are
permitted if the provisions of sub-paragraph (iii) and (v) of
this paragraph (f) are met at the time of the proposed payment;
(g) effect any material change in the general nature or conduct
of its business;
(h) guarantee, endorse or otherwise become liable for, or provide
a guarantee or financial assistance in any form, notwithstanding any
other provision of this Agreement (including without limitation the
definition of Debt);
(i) use any of the Credits for a purpose other than permitted
under this Agreement;
(j) do or permit anything to adversely affect the ranking or
validity of the Security;
(k) change its fiscal year-end;
(l) change its auditors to other than an internationally
recognized auditing firm; or
(m) incur any capital expenditures in excess of an aggregate of
$25,000 per year, including capital leases unless first approved in
writing by the Lender (it being acknowledged that the Lender has
approved of the Borrower's capital expenditure budget as presented to
the Lender by the Borrower for the Borrower's 1997 fiscal year).
ARTICLE XIII
DEFAULT
13.1 EVENTS OF DEFAULT
Each of the following events shall constitute an Event of Default under
this Agreement:
(a) the Borrower fails to pay any amount of principal (including
any amount relating to a Bankers' Acceptance or L/C); or
(b) the Borrower or any of the person that is a party to any of
the Credit Documents makes any representation or warranty under any of
the Credit Documents which is materially incorrect or incomplete when
made or deemed to be made; or
(c) the Borrower or a Guarantor ceases or threatens to cease to
carry on its business or admits its inability, or fails, to pay its
debts generally; or
(d) the Borrower:
(i) permits any default under one or more agreements or
instruments relating to any of its indebtedness or obligations;
or
(ii) permits any other event to occur and to continue after
any applicable grace period specified in such agreements or
instruments; or
(iii) permits any other event to accelerate the date on
which any such indebtedness or obligations of the Borrower
becomes due; or
(e) the Borrower or a Guarantor becomes bankrupt (voluntarily or
involuntarily), or becomes subject to any proceeding seeking
liquidation, arrangement, monitorship, relief of creditors or the
appointment of a receiver or trustee over, or any judgment or order
which has or might have an adverse effect on, any of its Property, and
such proceeding, if instituted against the Borrower, or a Guarantor or
such judgment or order, is not contested diligently, in good faith and
on a timely basis and dismissed or stayed within 60 days of its
commencement or issuance; or
(f) the Borrower or a Guarantor denies its obligations under the
Credit Documents or claims any of the Credit Documents to be invalid
or withdrawn in whole or in part; or any of the Credit Documents is
invalidated by any act, regulation or governmental action or is
determined to be invalid by a court or other judicial entity and such
determination has not been stayed pending appeal; or
(g) a final judgment, writ of execution, garnishment or
attachment or similar process is issued or levied against any of the
Property of the Borrower or a Guarantor and such judgment, writ,
execution, garnishment, attachment or similar process is not released,
bonded, satisfied, discharged, vacated or stayed within five Business
Days after its entry, commencement or levy; or
(h) an Encumbrancer takes possession of any of the Property of
the Borrower, by appointment of a receiver, receiver and manager, or
otherwise; or
(i) there is a breach of any of the provisions of this Agreement,
or any of the provisions of the Credit Documents including the
Security; or
(j) there is any Change in Control; or
(k) the Borrower's or Guarantor's financial statements contain a
qualified audit opinion which is unacceptable to the Lender in its
reasonable opinion;
(l) there is in the Lender's sole opinion a Material Adverse
Change in the financial condition of the Borrower or Guarantor; or
(m) there is in the Lender's sole opinion a Material Adverse
Change in the environmental condition of the Borrower or the Guarantor
or the Property or business activities of the Borrower or the
Guarantor.
13.2 ACCELERATION AND TERMINATION OF RIGHTS
If any Event of Default occurs, the Lender shall not be under any further
obligation to make Advances or to accept drafts or bills of exchange as Bankers'
Acceptances or issue L/C's and the Lender may give notice to the Borrower (i)
declaring the Lender's obligations to make Advances to be terminated, whereupon
the same shall forthwith terminate, (ii) declaring the Obligations or any of
them to be forthwith due and payable, whereupon they shall become and be
forthwith due and payable without presentment, demand, protest or further notice
of any kind, all of which are hereby expressly waived by the Borrower, and/or
(iii) demanding that the Borrower deposit forthwith with the Lender for the
Lender's benefit Collateral equal to the full principal amount at maturity of
all Bankers' Acceptances and L/C's , then outstanding for the Borrower's
account.
Notwithstanding the preceding paragraph, if the Borrower becomes a bankrupt
(voluntarily or involuntarily), or institutes any proceeding seeking
liquidation, rearrangement, monitorship relief of debtors or creditors or the
appointment of a receiver or trustee over any part of its Property, then without
prejudice to the other rights of the Lender as a result of any such event,
without any notice or action of any kind by the Lender, and without presentment,
demand or protest, the Lender's obligation to make Advances shall immediately
terminate, the Obligations shall immediately become due and payable and the
Borrower shall be obligated to deposit forthwith with the Lender for the
Lender's benefit Collateral equal to the full principal amount of maturity of
all Banker's Acceptances and L/C's then outstanding for the Borrower's account.
13.3 PAYMENT OF BANKERS' ACCEPTANCES
Immediately upon the occurrence of any event obligating the Borrower to
deposit Collateral with the Lender under Section 13.2, the Borrower shall,
without necessity of further act or evidence, be and become thereby
unconditionally obligated to deposit forthwith with the Lender Collateral equal
to the full principal amount at maturity of all Bankers' Acceptances and L/C's
then outstanding for the Borrower's account and the Borrower hereby
unconditionally promises and agrees to deposit with the Lender immediately upon
such demand Collateral in the amount so demanded. The Borrower authorizes the
Lender, or any of them, to debit its account with the amount required to pay
such L/C's, and to pay Bankers' Acceptances, notwithstanding that such Bankers'
Acceptances may be held by the Lender in its own right at maturity. Amounts paid
to the Lender pursuant to such a demand in respect of Bankers' Acceptances and
L/C's shall be applied against, and shall reduce the obligations of the Borrower
to pay amounts then or thereafter payable under Bankers' Acceptances and L/C's
at the times the amounts become payable thereunder.
The Borrower shall be entitled to receive interest on cash held as
Collateral in accordance with Section 14.13.
13.4 REMEDIES
Upon the making of a declaration contemplated by Section 13.2, the Lender
may take such action or proceedings as it in its sole discretion deems expedient
to enforce payment of the Obligations, all without any additional notice,
presentment, demand, protest or other formality, all of which are hereby
expressly waived by the Borrower.
13.5 PERFORM OBLIGATIONS
If an Event of Default has occurred and is continuing and if the Borrower
has failed to perform any of its covenants or agreements in the Credit
Documents, the Lender, may perform any such covenants or agreements in any
manner deemed fit by the Lender without thereby waiving any rights to enforce
the Credit Documents.
13.6 THIRD PARTIES
No person dealing with the Lender or any agent of the Lender shall be
concerned to inquire whether the powers which the Lender are purporting to
exercise have become exercisable, or whether any Obligations remain outstanding.
13.7 REMEDIES CUMULATIVE
The rights and remedies of the Lender under the Credit Documents are
cumulative and are in addition to and not in substitution for any rights or
remedies provided by law. Any single or partial exercise by the Lender of any
right or remedy for a default or breach of any term, covenant, condition or
agreement herein contained shall not be deemed to be a waiver of or to alter,
affect, or prejudice any other right or remedy or other rights or remedies to
which the Lender may be lawfully entitled for the same default or breach. Any
waiver by the Lender of the strict observance, performance or compliance with
any term, covenant, condition or agreement herein contained, and any indulgence
granted by the Lender shall be deemed not to be a waiver of any subsequent
default.
13.8 SET-OFF OR COMPENSATION
In addition to and not in limitation of any rights now or hereafter granted
under applicable law, if repayment is accelerated pursuant to Section 13.2, the
Lender may at any time and from time to time without notice to the Borrower or
any other person, any notice being expressly waived by the Borrower, set-off and
compensate and apply any and all deposits, general or special, time or demand,
provisional or final, matured or unmatured, and any other indebtedness at any
time owing by the Lender to or for the credit of or the account of the Borrower,
against and on account of the Obligations notwithstanding that any of them are
contingent or unmatured.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1 HEADINGS AND TABLE OF CONTENTS
The headings of the Articles and Sections and the Table of Contents are
inserted for convenience of reference only and shall not affect the construction
or interpretation of this Agreement.
14.2 ACCOUNTING TERMS
Each accounting term used in this Agreement, unless otherwise defined
herein, has the meaning assigned to it under GAAP.
14.3 CAPITALIZED TERMS
All capitalized terms used in any of the Credit Documents (other than this
Agreement) which are defined in this Agreement shall have the meaning defined
herein unless otherwise defined in the other document.
14.4 SEVERABILITY
Any provision of this Agreement which is or becomes prohibited or
unenforceable in any relevant jurisdiction shall not invalidate or impair the
remaining provisions hereof which shall be deemed severable from such prohibited
or unenforceable provision and any such prohibition or unenforceability in any
such jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction. Should this Agreement fail to provide for any relevant
matter, the validity, legality or enforceability of this Agreement shall not
thereby be affected.
14.5 NUMBER AND GENDER
Unless the context otherwise requires, words importing the singular number
shall include the plural and vice versa, words importing any gender include all
genders and references to agreements and other contractual instruments shall be
deemed to include all present or future amendments, supplements, restatements or
replacements thereof or thereto.
14.6 AMENDMENT, SUPPLEMENT OR WAIVER
No amendment, supplement or waiver of any provision of the Credit
Documents, nor any consent to any departure by the Borrower therefrom, shall in
any event be effective unless it is in writing, makes express reference to the
provision affected thereby and is signed by the Lender and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No waiver or act or omission of the Lender shall extend
to or be taken in any manner whatsoever to affect any subsequent Event of
Default or breach by the Borrower of any provision of the Credit Documents or
the rights resulting therefrom.
14.7 GOVERNING LAW
Each of the Credit Documents, except for those which expressly provide
otherwise, shall be conclusively deemed to be a contract made under, and shall
for all purposes be governed by and construed in accordance with, the laws of
the Province of Ontario and the laws of Canada applicable in Ontario. Each party
to this Agreement hereby irrevocably and unconditionally attorns to the
non-exclusive jurisdiction of the courts of Ontario and all courts competent to
hear appeals therefrom.
14.8 THIS AGREEMENT TO GOVERN
In the event of any direct and material conflict between the provisions of
this Agreement and the provisions of any other Credit Document, the provisions
of this Agreement shall govern to the extent necessary to remove the conflict,
provided that the Borrower acknowledges that specific provisions of the Credit
Documents, which are not also provided for in this Agreement, are in addition to
and not in substitution for the provisions of this Agreement.
14.9 PERMITTED ENCUMBRANCES
The designation of an Encumbrance as a Permitted Encumbrance is not, and
shall not be deemed to be, an acknowledgment by the Lender that the Encumbrance
shall have priority over the claims of the Lender against the Borrower or the
Borrower's Property.
14.10 CURRENCY
All payments made hereunder shall be made in the currency in respect of
which the obligation requiring such payment arose. Unless the context otherwise
requires, all amounts expressed in this Agreement in terms of money shall refer
to Canadian Dollars.
Except as otherwise expressly provided in this Agreement, wherever this
Agreement contemplates or requires the calculation of the equivalent in Canadian
Dollars of an amount expressed in U.S. Dollars, or vice versa, the calculation
shall be made on the basis of the Exchange Rate at the effective date of the
calculation.
14.11 EXPENSES AND INDEMNITY
All statements, reports, certificates, opinions, appraisals and other
documents or information required to be furnished to the Lender by the Borrower
under this Agreement shall be supplied without cost to the Lender. The Borrower
shall pay on demand all third party costs and expenses of the Lender, or any of
them (including, without limitation, the fees and expenses of counsel for the
Lender on a solicitor and his own client basis), incurred in connection with (i)
the preparation, execution, delivery, administration, periodic review and
enforcement of the Credit Documents; (ii) any syndication of the Credits; (iii)
obtaining advice as to its rights and responsibilities in connection with the
Credits and the Credit Documents; and (iv) other matters relating to the
Credits. Such costs and expenses shall be payable whether or not an Advance is
made under this Agreement and may upon the Lender giving one Business Day's
advance notice to the Borrower, be charged to the Borrower's deposit account
when incurred or submitted.
The Borrower shall indemnify the Lender against any liability, obligation,
loss (other than loss of profit) or expense which it may sustain or incur as a
consequence of (i) any representation or warranty made herein by the Borrower or
in a Credit Document by any other Person, which was incorrect at the time it was
made or deemed to have been made, (ii) a default by the Borrower in the payment
of any sum due from it (irrespective of whether an Advance is deemed to be made
to the Borrower to pay the amount that the Borrower has failed to pay),
including, but not limited to, all sums (whether in respect of principal,
interest or any other amount) paid or payable to lenders of funds borrowed by
the Lender in order to fund the amount of any such unpaid amount to the extent
the Lender is not reimbursed pursuant to any other provisions of this Agreement,
(iii) the failure of the Borrower to complete any Advance or make any payment
after notice therefor has been given under this Agreement, (iv) the failure of a
purchaser of Bankers' Acceptances to pay for and take delivery of them in
accordance with the advice given by the Borrower under Section 10.4 and (v) any
other default by the Borrower hereunder. A certificate of the Lender as to the
amount of any such liability, obligation loss or expense shall be prima facie
evidence as to the amount thereof, in the absence of manifest error.
In addition, the Borrower shall indemnify the Lender and its directors,
officers, employees and representatives from and against any and all actions,
proceedings, claims, losses, damages, liabilities, expenses and obligations of
any kind that may be incurred by or asserted against any of them as a result of
or in connection with the Credits, other than through the gross negligence or
wilful misconduct of the Lender.
The agreements in this Section shall survive the termination of this
Agreement and repayment of the Obligations.
14.12 INCREASED COSTS ETC.
If after the date hereof the introduction of or any change in or in the
interpretation of, or any change in its application to the Borrower of, any law
or any regulation or guideline from any central bank or other governmental
authority (whether or not having the force of law), including but not limited to
any reserve or special deposit requirement or any Tax (other than Excluded Taxes
and withholding taxes imposed under the Income Tax Act (Canada)) or any capital
requirement, has due to the Lender's compliance therewith the effect, directly
or indirectly, of (i) increasing the cost to the Lender performing its
obligations hereunder; (ii) reducing any amount received or receivable by the
Lender hereunder or its effective return hereunder or on its capital; or (iii)
causing the Lender to make any payment or to forego any return based on any
amount received or receivable by the Lender, or any of them, hereunder, then
upon demand from time to time the Borrower shall pay such amount as shall
compensate the Lender for any such cost, reduction, payment or foregone return
that is not fully offset by an increase in the applicable interest rate or rates
or fees hereunder. Any certificate of a Lender in respect of the foregoing will
be prima facie evidence of the foregoing, except for manifest error, provided
that the Lender determines the amounts owing to it in good faith and provides a
detailed description of its calculation of the amounts owing to it.
If the Lender demands compensation under this Section, the Borrower may at
any time, upon at least four Business Days' prior notice to that Lender, which
notice shall be irrevocable, prepay in full, without penalty but subject to the
limitations on repayments contained herein, the then outstanding Obligations
owing to the Lender, including all compensation to the date of repayment. The
Credits shall thereupon be cancelled.
14.13 INTEREST ON MISCELLANEOUS AMOUNTS
If the Borrower fails to pay any amount payable hereunder (other than
principal, interest thereon or interest upon interest which is payable as
otherwise provided in this Agreement) on the due date, the Borrower shall, on
demand, pay interest on such overdue amount to the Lender from and including
such due date up to but excluding the date of actual payment, both before and
after demand, default or judgment, at a rate of interest per annum equal to 1%
per annum less than the Prime Rate per annum, compounded monthly.
If the Borrower deposits with the Lender cash as Collateral pursuant to a
requirement under this Agreement, the Lender shall pay the Borrower interest on
the cash while it continues to be held as Collateral at the rate offered by the
Lender from time to time for deposits in the relevant currency of comparable
size and term.
14.14 CURRENCY INDEMNITY
In the event of a judgment or order being rendered by any court or tribunal
for the payment of any amounts owing to the Lender under this Agreement or for
the payment of damages in respect of any breach of this Agreement or under or in
respect of a judgment or order of another court or tribunal for the payment of
such amounts or damages, such judgment or order being expressed in a currency
("the Judgment Currency") other than the currency payable hereunder or
thereunder ("the Agreed Currency"), the party against whom the judgment or order
is made shall indemnify and hold the Lender harmless against any deficiency in
terms of the Agreed Currency in the amounts received by the Lender arising or
resulting from any variation as between (i) the Exchange Rate at which the
Agreed Currency is converted into the Judgment Currency for the purposes of such
judgment or order, and (ii) the Exchange Rate at which the Lender is able to
purchase the Agreed Currency with the amount of the Judgment Currency actually
received by the Lender on the date of such receipt. The indemnity in this
Section shall constitute a separate and independent obligation from the other
obligations of the Borrower hereunder, shall apply irrespective of any
indulgence granted by the Lender, and shall be secured by the Security.
14.15 ADDRESS FOR NOTICE
Notice to be given under the Credit Documents shall, except as otherwise
specifically provided, be in writing addressed to the party for whom it is
intended and, unless the law deems a particular notice to be received earlier, a
notice shall not be deemed received until actual receipt thereof by the other
party. The addresses of the parties hereto for the purposes hereof shall be the
addresses specified beside their respective signatures to this Agreement, or
such other mailing or telecopier addresses as each party from time to time may
notify the other as aforesaid.
14.16 TIME OF THE ESSENCE
Time shall be of the essence in this Agreement.
14.17 FURTHER ASSURANCES
The Borrower shall, at the request of the Lender, do all such further acts
and execute and deliver all such further documents as may be necessary or
desirable in order to fully perform and carry out the purpose and intent of the
Credit Documents.
14.18 TERM OF AGREEMENT
Except as otherwise provided herein, this Agreement shall remain in full
force and effect until the payment and performance in full of all of the
Obligations.
14.19 PAYMENTS ON BUSINESS DAY
Whenever any payment or performance under the Credit Documents would
otherwise be due on a day other than a Business Day, such payment shall be made
on the following Business Day, unless the following Business Day is in a
different calendar month, in which case the payment shall be made on the
preceding Business Day.
14.20 COUNTERPARTS AND FACSIMILE
This Agreement may be executed in any number of counterparts, each of which
when executed and delivered shall be deemed to be an original, and such
counterparts together shall constitute one and the same agreement. For the
purposes of this Section, the delivery of a facsimile copy of an executed
counterpart of this Agreement shall be deemed to be valid execution and delivery
of this Agreement, but the party delivering a facsimile copy shall deliver an
original copy of this Agreement as soon as possible after delivering the
facsimile copy.
14.21 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties hereto
concerning the matters addressed in this Agreement, and cancel and supersede any
prior agreements, undertakings, declarations or representations, written or
verbal, in respect thereof.
14.22 SUCCESSORS AND ASSIGNS
The Credit Documents shall be binding upon and enure to the benefit of the
Lender, the Borrower and its successors and assigns, except that the Borrower
shall not assign any rights or obligations with respect to this Agreement or any
of the other Credit Documents.
14.23 DATE OF AGREEMENT
This Agreement may be referred to as being dated 20 December, 1996,
notwithstanding the actual date of execution.
IN WITNESS OF WHICH, the parties have executed this Agreement on 20
December, 1996.
Address For Notice
------------------
THE BANK OF NOVA SCOTIA
The Bank of Nova Scotia
Windsor Commercial
Banking Centre,
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 000,
Xxxxxxx, Xxxxxxx
X0X 0XX By: /s/ Xxxxx Xxxxxxxx
L4L 4Y8 Xxxxx Xxxxxxxx
Deputy Manager
Attention: Assistant General and Manager Commercial Banking
Manager and Centre Manager
Fax No.: (000) 000-0000
JPE Canada Inc. JPE CANADA INC.
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx
X0X 0X0
By: /s/ Xxxxx X. Xxxxx
Xxxxx Xxxxx
Secretary
Attention: President
Fax No.: (000) 000-0000
SCHEDULES
Schedule A Xxxxxx Xxxxxxx Legal Opinions
Schedule B Compliance Certificate
Schedule C Patents
Schedule D List of Pension Plans
