EXECUTION COPY
THIRD FURTHER AMENDED AND RESTATED
CREDIT AGREEMENT
BETWEEN
THE BANK OF NOVA SCOTIA
AS ADMINISTRATIVE AGENT
AND
DOCUMENTATION AGENT
AND
SOCIETE GENERALE (NEW YORK)
AS SYNDICATION AGENT
AND
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE (CANADA),
NATIONAL BANK OF CANADA
AND OTHER FINANCIAL INSTITUTIONS
AS LENDERS
AND
BREAKWATER RESOURCES LTD. AND CANZINCO LTD.
AS BORROWERS
November 25, 2003
EXECUTION COPY
TABLE OF CONTENTS
ARTICLE 1 INTERPRETATION.......................................................2
1.01 DEFINED TERMS......................................................2
1.02 PRO RATA AND PARI PASSU DISTRIBUTIONS.............................26
1.03 OTHER USAGES......................................................27
1.04 PLURAL AND SINGULAR...............................................27
1.05 HEADINGS..........................................................27
1.06 CURRENCY..........................................................27
1.07 APPLICABLE LAW....................................................27
1.08 TIME OF THE ESSENCE...............................................27
1.09 NON-BANKING DAYS..................................................27
1.10 CONSENTS, APPROVALS AND DOCUMENTATION.............................28
1.11 AMOUNT OF CREDIT..................................................28
1.12 SCHEDULES.........................................................28
1.13 STATUTE REFERENCES................................................28
1.14 PARAMOUNTCY.......................................................28
1.15 EXTENSION OF CREDIT...............................................28
1.16 JOINT AND SEVERAL OBLIGATIONS.....................................29
1.17 AMENDMENT AND RESTATEMENT.........................................29
ARTICLE 2 CREDIT FACILITIES...................................................29
2.01 ESTABLISHMENT OF CREDIT FACILITIES................................29
2.02 CREDIT RESTRICTIONS...............................................30
2.03 LENDERS' COMMITMENTS..............................................30
2.04 REDUCTIONS OF REVOLVING CREDIT REFERENCE AMOUNT...................30
2.05 TERMINATION OF CREDIT FACILITIES..................................30
ARTICLE 3 GENERAL PROVISIONS RELATING TO CREDITS..............................31
3.01 TYPES OF CREDIT AVAILMENTS........................................31
3.02 FUNDING OF LOANS..................................................31
3.03 FAILURE OF LENDER TO FUND LOAN....................................32
3.04 INABILITY TO FUND U.S. DOLLAR ADVANCES IN CANADA..................33
3.05 TIMING OF CREDIT AVAILMENTS.......................................34
3.06 TIME AND PLACE OF PAYMENTS........................................34
3.07 REMITTANCE OF PAYMENTS............................................34
3.08 EVIDENCE OF INDEBTEDNESS..........................................35
3.09 GENERAL PROVISIONS RELATING TO ALL LETTERS........................35
3.10 NOTICE PERIODS....................................................36
3.11 LOANS UNDER THE SUPPLEMENTAL TERM FACILITY........................37
3.12 OVERDRAFT LOANS...................................................37
ARTICLE 4 DRAWDOWNS...........................................................39
4.01 DRAWDOWNS.........................................................39
4.02 NO CREDIT EXCESSES UNDER REVOLVING FACILITY.......................39
ARTICLE 5 ROLLOVERS...........................................................39
5.01 LIBOR LOANS.......................................................39
5.02 ROLLOVER NOTICE...................................................40
ARTICLE 6 CONVERSIONS of libor loans..........................................40
6.01 CONVERSION AFTER DEFAULT..........................................40
6.02 CONVERSION UPON FAILURE TO GIVE ROLLOVER NOTICE...................40
ARTICLE 7 INTEREST............................................................40
(ii) EXECUTION COPY
7.01 INTEREST RATES....................................................40
7.02 CALCULATION AND PAYMENT OF INTEREST...............................41
7.03 GENERAL INTEREST RULES............................................41
7.04 SELECTION OF INTEREST PERIODS.....................................42
7.05 STANDBY FEES......................................................42
7.06 LETTER FEES.......................................................43
7.07 ADDITIONAL FEES...................................................43
7.08 WAIVER............................................................44
7.09 MAXIMUM RATE PERMITTED BY LAW.....................................44
ARTICLE 8 RESERVE, CAPITAL, INDEMNITY AND TAX PROVISIONS......................44
8.01 CONDITIONS OF CREDIT..............................................44
8.02 CHANGE OF CIRCUMSTANCES...........................................44
8.03 FAILURE OF LENDERS TO FUND AS A RESULT OF CHANGE
OF CIRCUMSTANCES..................................................45
8.04 INDEMNITY RELATING TO CREDITS.....................................46
8.05 INDEMNITY FOR TRANSACTIONAL AND ENVIRONMENTAL LIABILITY...........46
8.06 PAYMENTS FREE AND CLEAR OF TAXES..................................48
ARTICLE 9 REPAYMENTS AND PREPAYMENTS..........................................49
9.01 REPAYMENT OF REVOLVING FACILITY...................................49
9.02 REPAYMENT OF NON-REVOLVING FACILITY AND SUPPLEMENTAL
TERM FACILITY.....................................................49
9.03 VOLUNTARY PREPAYMENTS.............................................49
9.04 MANDATORY PAYMENTS................................................50
9.05 REIMBURSEMENT OR CONVERSION ON PRESENTATION OF LETTERS............51
9.06 LETTERS SUBJECT TO AN ORDER.......................................52
9.07 CREDIT EXCESS AND REPAYMENT OF CREDIT EXCESS......................52
ARTICLE 10 REPRESENTATIONS AND WARRANTIES.....................................52
10.01 REPRESENTATIONS AND WARRANTIES....................................52
10.02 SURVIVAL OF REPRESENTATIONS AND WARRANTIES........................57
ARTICLE 11 COVENANTS..........................................................57
11.01 OCTOBER OFFERING PROCEEDS.........................................57
11.02 AFFIRMATIVE COVENANTS.............................................58
11.03 PERFORMANCE OF COVENANTS BY ADMINISTRATIVE AGENT..................68
11.04 RESTRICTIVE COVENANTS.............................................68
ARTICLE 12 CONDITIONS PRECEDENT TO OBTAINING CREDIT...........................71
12.01 CONDITIONS PRECEDENT TO ALL CREDIT................................71
12.02 CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT...........72
12.03 WAIVER............................................................73
ARTICLE 13 DEFAULT AND REMEDIES...............................................73
13.01 CREDIT EVENTS.....................................................73
13.02 EVENTS OF DEFAULT.................................................76
13.03 CONSEQUENCES OF THE OCCURRENCE OF EVENTS OF DEFAULT...............76
13.04 REFUND OF OVERPAYMENTS............................................77
13.05 REMEDIES CUMULATIVE...............................................77
13.06 SET-OFF...........................................................78
ARTICLE 14 THE ADMINISTRATIVE AGENT...........................................78
14.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.............78
14.02 INTEREST HOLDERS..................................................79
14.03 CONSULTATION WITH COUNSEL.........................................80
14.04 DOCUMENTS.........................................................80
14.05 ADMINISTRATIVE AGENT AS LENDER....................................80
(iii) EXECUTION COPY
14.06 RESPONSIBILITY OF ADMINISTRATIVE AGENT............................80
14.07 ACTION BY ADMINISTRATIVE AGENT....................................80
14.08 NOTICE OF EVENTS OF DEFAULT.......................................81
14.09 RESPONSIBILITY DISCLAIMED.........................................81
14.10 INDEMNIFICATION...................................................81
14.11 CREDIT DECISION...................................................82
14.12 SUCCESSOR ADMINISTRATIVE AGENT....................................82
14.13 DELEGATION BY ADMINISTRATIVE AGENT................................83
14.14 WAIVERS AND AMENDMENTS............................................83
14.15 DETERMINATION BY ADMINISTRATIVE AGENT CONCLUSIVE AND BINDING......84
14.16 ADJUSTMENTS AMONG LENDERS AFTER ACCELERATION......................84
14.17 REDISTRIBUTION OF PAYMENT.........................................85
14.18 DISTRIBUTION OF NOTICES...........................................85
14.19 DETERMINATION OF EXPOSURES........................................85
14.20 DECISION TO ENFORCE SECURITY......................................86
14.21 ENFORCEMENT.......................................................87
14.22 APPLICATION OF CASH PROCEEDS OF REALIZATION.......................87
14.23 ENTERING INTO CONTRACTS...........................................89
14.24 OTHER SECURITY NOT PERMITTED......................................89
ARTICLE 15 MISCELLANEOUS......................................................89
15.01 WAIVERS...........................................................89
15.02 NOTICES...........................................................89
15.03 SEVERABILITY......................................................89
15.04 COUNTERPARTS......................................................90
15.05 SUCCESSORS AND ASSIGNS............................................90
15.06 ASSIGNMENT........................................................90
15.07 ENTIRE AGREEMENT..................................................91
15.08 FURTHER ASSURANCES................................................91
15.09 JUDGMENT CURRENCY.................................................91
Schedule A - Individual Commitments
Schedule B - Compliance Certificate
Schedule C - Form of Assignment
Schedule D - Location of Property and Assets of the Obligors
Schedule E - Place of Business of the Obligors
Schedule F - Capital of CZL and Material Subsidiaries
Schedule G - Disclosure Schedule
Schedule H - OCF Projections
Schedule I - Guarantee Confirmation
Schedule J - Acknowledgment of Assignment
Schedule K - Notice of Assignment
SCHEDULE L - INTENTIONALLY DELETED
Schedule M - Existing Cambior Liens
Schedule N - Dundee Letter of Credit
Schedule O - Summary of Business Plan
Schedule P - E1 Toqui Royalty Payments
Schedule Q - Environmental Issues
Schedule R - Deficiencies in Security and Documentation
Schedule S - Borrowing Base Adjustments for Hedge Prices
EXECUTION COPY
THIRD FURTHER AMENDED AND RESTATED CREDIT AGREEMENT
THIS AGREEMENT made as of the 25th day of November, 2003.
BETWEEN:
BREAKWATER RESOURCES LTD. and CANZINCO LTD., each a corporation
incorporated under the laws of Canada
(herein individually called a "Borrower" and collectively called the
"Borrowers")
- and -
THE BANK OF NOVA SCOTIA, SOCIETE GENERALE (CANADA), NATIONAL BANK OF
CANADA and one or more financial institutions to whom The Bank of Nova
Scotia, Societe Generale (Canada), National Bank of Canada or their
permitted assigns may from time to time assign an undivided interest in
the Loan Documents (as defined herein) and who agree to be bound by the
terms hereof as a Lender (including the Issuing Lender and Overdraft
Lender, each defined herein)
(herein individually called a "Lender" and collectively called the
"Lenders")
- and -
THE BANK OF NOVA SCOTIA, a Canadian chartered bank
(herein, in its capacity as administrative agent and documentation agent
of the Lenders (including the Issuing Lender and Overdraft Lender, each
defined herein), called the "Administrative Agent")
- and -
SOCIETE GENERALE (NEW YORK)
(herein, in its capacity as syndication agent of the Lenders, called the
"Syndication Agent")
WHEREAS, pursuant to the Further Amended and Restated Credit Agreement
made as of November 13, 2001 between the Borrowers, the Administrative Agent,
the Syndication Agent and The Bank of Nova Scotia and Societe Generale (Canada)
as lenders, The Bank of Nova Scotia and Societe Generale (Canada) and National
Bank of Canada established certain credit facilities in favour of the Borrowers,
which Further Amended and Restated Credit Agreement was further amended and
restated by the Second Further Amended and Restated Credit Agreement dated as of
December 23, 2002 (as so amended and restated, the "EXISTING CREDIT AGREEMENT");
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AND WHEREAS the parties wish to further amend and restate the Existing
Credit Agreement upon the terms and subject to the conditions contained herein;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
mutual covenants and agreements herein contained and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties hereto hereby amend and restate the Existing Credit Agreement as
follows:
ARTICLE 1
INTERPRETATION
1.01 DEFINED TERMS.
The following defined terms shall for all purposes of this Agreement, or any
amendment, substitute, supplement, replacement, addition or schedule hereto,
have the following respective meanings unless the context otherwise specifies or
requires or unless otherwise defined herein:
"ABRCAN" means, at any particular time, the greater of (i) the Base Rate Canada
at such time and (ii) the Federal Funds Effective Rate plus 1/2 of 1% per annum
at such time.
"ABRCAN LOAN" means monies lent by a Lender to a Borrower in United States
dollars and upon which interest accrues at a rate referable to ABRCAN.
"ACCOUNTS RECEIVABLE" mean, at any particular time, the aggregate of Lead
Concentrate Accounts Receivable, Zinc Concentrate Accounts Receivable and Copper
Concentrate Accounts Receivable at such time.
"ACKNOWLEDGMENT OF ASSIGNMENT" means an acknowledgment in the form of Schedule J
hereto by a purchaser of Inventory from any Obligor of the assignment of the
Accounts Receivable by such Obligor to the Administrative Agent.
"AFFILIATE" has the meaning ascribed thereto in the CBCA.
"AGREEMENT" means this agreement, including all schedules, as the same may be
amended, restated, replaced or otherwise modified from
time to time.
"AMENDMENT EFFECTIVE DATE" means the date on which all the conditions set out in
Section 12.02 hereof have been satisfied.
"APPLICABLE LAW" means all public laws, statutes, ordinances, decrees,
judgments, codes, standards, acts, orders, by-laws, rules, regulations, Official
Body Consents, permits, binding policies and guidelines, and requirements of all
Official Bodies, which now or hereafter may be lawfully applicable to and
enforceable against any Obligor or its property or any part thereof.
"APPROVED COMMODITY HEDGE CONTRACT" means a put, call, forward, future, swap,
option, cap, collar or similar arrangement (or any combination of the foregoing,
or any derivative thereof) entered into by an Obligor as a hedge against
fluctuations in metal prices, with such counterparty, in such form of agreement
and on such terms and conditions as have been approved by the
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Administrative Agent on behalf of the Lenders by notice in writing to BRL from
the Administrative Agent.
"AVAILABLE REVOLVING CREDIT" means, at any particular time, the amount, if any,
by which the amount of the Revolving Credit Reference Amount at such time
exceeds the aggregate amount of credit outstanding under the Revolving Facility
at such time.
"BANKING DAY" means any day, other than Saturday and Sunday, on which banks
generally are open for business in Toronto and New York and, when used in
respect of LIBOR Loans, means any day other than a Saturday or a Sunday on which
banks generally are open for business in Toronto, Ontario, New York, New York
and London, England and on which transactions can be carried on in the London
interbank market.
"BASE RATE CANADA" means the variable rate of interest per annum equal to the
rate of interest determined by the Administrative Agent from time to time as its
base rate for United States dollar loans made by the Administrative Agent in
Canada from time to time, being a variable per annum reference rate of interest
adjusted automatically upon change by the Administrative Agent calculated on the
basis of a year of 360 days.
"BORROWING BASE" means, at any particular time, the sum of:
(a) 90% of the Domestic Accounts Receivable at such time;
(b) 90% of Domestic Inventory at such time;
(c) 90% of Foreign Accounts Receivable at such time; and
(d) the lesser of:
(i) $10,000,000; and
(ii) 75% of Foreign Inventory at such time; provided that the
aggregate collateral value of Foreign Inventory located
in Tunisia included in the Borrowing Base at any time
shall not exceed $3,000,000;
provided, however, that if any Approved Commodity Hedge Contracts are in effect
at such particular time, the Borrowing Base as otherwise determined in
accordance with the foregoing in respect of any particular month shall be
adjusted by an amount equal to the sum of the products of (A) the positive or
negative difference between the fixed prices for zinc, silver, copper, gold
and/or lead, as the case may be ("Metals") set out in each Approved Commodity
Hedge Contract (each, a "Hedge Price") in effect for such month and the London
Metal Exchange price fixes for such Metal referred to in the relevant
definitions of Copper Concentrate Accounts Receivable, Copper Concentrate
Inventory, Lead Concentrate Accounts Receivable, Lead Concentrate Inventory,
Zinc Concentrate Accounts Receivable and/or Zinc Concentrate Inventory,
multiplied by (B) the lesser of (i) the aggregate payable pounds (in the case of
zinc, copper and lead) or ounces (in the case of silver or gold) of such Metal,
as adjusted to a hedgeable basis in accordance with standard industry practice,
included in such Accounts Receivable for unpriced Metal and/or Inventory and
(ii) the aggregate notional quantity of payable pounds or ounces, as applicable,
of such Metal hedged under such Approved Commodity Hedge Contract, each
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calculated on a Metal by Metal basis in accordance with the illustrative example
attached as Schedule S hereto.
"XXXXXXXX-XXXXXX MINE" means the underground polymetallic mine which is owned
and operated by BRL and located near the City of Rouyn-Noranda in the
northwestern portion of the Province of Quebec.
"BOUGRINE MINE" means the zinc/lead underground mine which is owned and operated
by Tunisiaco and which is located between the towns of Le Sers and Le Kef in
Tunisia.
"BRANCH OF ACCOUNT" means the Scotia Plaza Branch of The Bank of Nova Scotia
located at 00 Xxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx or such other branch or office
of the Administrative Agent located in Canada as the Borrowers and the
Administrative Agent may agree upon.
"BRL" means Breakwater Resources Ltd., its successors and assigns.
"BRL ASSIGNMENT OF INDEBTEDNESS AND SECURITY" means the assignment agreement
made as of August 14, 1998 between BRL and the Administrative Agent, as the same
may be amended, modified, supplemented or replaced from time to time, and
pursuant to which BRL, as continuing collateral security for the payment and
performance of the Secured Obligations, assigned the Related Party Loan and the
Related Party Security to the Administrative Agent.
"BRL DEED OF HYPOTHEC" means, collectively (a) the Deed of Hypothec of BRL dated
May 19, 2000 in favour of the Administrative Agent and published at Rouyn
Noranda on May 23, 2000 under number 14837 NA# 20351 and on the same date at
Abitibi under number 359741 NA #53843, given as continuing collateral security
for the payment of any bond issued thereunder and (b) that certain 25%
collateral bond of BRL bearing certificate number 01 in the principal amount of
Cdn.$150,0000,000 issued under the said Deed of Hypothec and any other bond
issued thereunder.
"BRL DIRECTION AND ACKNOWLEDGMENT" means the irrevocable direction to be
delivered by BRL to each third party with whom it has entered into a commodity
hedging contract, in form and substance satisfactory to the Administrative Agent
and the Lenders, and pursuant to which BRL shall irrevocably direct each such
third party to pay any amounts payable by such third party to BRL under any such
commodity hedging contract to the Administrative Agent, for the benefit of the
Lenders, together with an acknowledgment from such third party, in form and
substance satisfactory to the Administrative Agent, confirming that such third
party agrees to comply with the terms of such irrevocable direction.
"BRL MOVABLE HYPOTHEC" means the Moveable Hypothec dated May 19, 2000, between
BRL and each Creditor (as defined in the Deed of Hypothec) represented by
Administrative Agent as registered in the Quebec Registry of Real and Movable
Rights, May 23, 2000, under No. 00-0000000-0000, as the same may be amended,
modified, supplemented or replaced from time to time, and pursuant to which BRL,
as continuing collateral security for all its present and future indebtedness,
liabilities and obligations under or in connection with this Agreement or any
other Loan Document to which it is a party, has hypothecated certain bonds
issued pursuant to the BRL Deed of Hypothec in favour of the Administrative
Agent.
"BRL PLEDGE AGREEMENT" means, collectively, (a) the pledge agreement dated as of
August 14, 1998 between BRL and the Administrative Agent, as the same may be
amended, modified,
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supplemented or replaced from time to time, and pursuant to which BRL, as
continuing collateral security for the payment and performance of the Secured
Obligations, granted to the Administrative Agent a security interest in and
deposited in pledge with the Administrative Agent all of the issued and
outstanding shares of CZL, Consell, Santa Xxxxxxx and any other Material
Subsidiaries which it then owned or subsequently acquired, (b) the Contrat xx
Xxxx, (c) the contrato de prenda de acciones dated October 6, 1998 between BRL
and the Administrative Agent, as the same may be amended, modified, supplemented
or replaced from time to time, and pursuant to which BRL, as continuing
collateral security for the payment and performance of the Secured Obligations,
granted to the Administrative Agent a security interest in all of the issued and
outstanding shares of Chileco which it then owned or subsequently acquired, and
(d) the pledge agreement referred to in Section 11.04(j)(v) hereof.
"BRL SECTION 427 ASSIGNMENTS" means the BRL/Scotiabank Section 427 Assignment
and any other assignment of inventory entered into by BRL in favour of a Lender
pursuant to Section 427 of the Bank Act (Canada) from time to time, in form and
substance satisfactory to the Administrative Agent and any such Lender, as each
such assignment may be amended, modified, supplemented or replaced from time to
time.
"BRL SECURITY AGREEMENT" means the general security agreement made as of August
14, 1998 by BRL in favour of the Administrative Agent, as the same may be
amended, modified, supplemented or replaced from time to time, and pursuant to
which BRL, as continuing collateral security for the payment and performance of
the Secured Obligations, granted to the Administrative Agent a security interest
in all of its present and future personal property, assets and undertaking.
"BRL SECURITY DOCUMENTS" means the BRL Pledge Agreement, the BRL Security
Agreement, the BRL Assignment of Indebtedness and Security, the BRL Direction
and Acknowledgment, the BRL Movable Hypothec, the BRL Deed of Hypothec and the
BRL Section 427 Assignments.
"BRL/SCOTIABANK SECTION 427 ASSIGNMENT" means the assignment of inventory
pursuant to Xxxxxxx 000 xx xxx Xxxx Xxx (Xxxxxx) dated August 14, 1998 by BRL in
favour of The Bank of Nova Scotia, as the same may be amended, modified,
supplemented, replaced or renewed from time to time.
"BUSINESS PLAN" means the business plan of BRL dated February 6, 2003, in the
form delivered to the Administrative Agent on February 6, 2003, a summary of
which is attached hereto as Schedule O.
"CANADIAN DOLLAR EQUIVALENT" means the Exchange Equivalent in Canadian dollars
of any amount of United States dollars.
"CAPITAL EXPENDITURES" means, for any particular period, those expenditures of
the Obligors which would, in accordance with Generally Accepted Accounting
Principles and on a consolidated basis, be considered capital expenses of the
Obligors for such period (specifically including those financed through capital
leases). "Caribou Mine" means the lead/zinc/silver underground and open pit
mines which are owned and operated by CZL and which are located in the County of
Restigouche, New Brunswick.
"CASH COLLATERAL" means, from time to time, the cash collateral and Cash
Equivalents, if any, pledged by an Obligor to secure hedging obligation margins.
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"CASH EQUIVALENTS" means (a) securities with maturities of 90 days or less from
the date of acquisition issued or fully guaranteed or insured by the United
States Government or any agency thereof or the Canadian Government or any agency
thereof, (b) certificates of deposit and eurodollar time deposits with
maturities of 90 days or less from the date of acquisition and overnight bank
deposits of any Lender, Standard or of any commercial bank having capital and
surplus in excess of $500,000,000 or the Canadian Dollar Equivalent thereof, (c)
repurchase obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than
seven days with respect to securities issued or fully guaranteed or insured by
the United States Government or the Canadian Government, (d) commercial paper of
an American or Canadian issuer rated at least A-1 or the equivalent thereof by
Standard and Poor's Ratings Group ("S&P") or P-1 or the equivalent thereof by
Xxxxx'x Investors Services, Inc. ("Moody's") and in either case maturing within
90 days after the day of acquisition, (e) securities with maturities of 90 days
or less from the date of acquisition issued or fully guaranteed by (i) any
state, commonwealth or territory of the United States, (ii) any province or
territory of Canada, (iii) by any political subdivision or taxing authority of
any such state, province, commonwealth or territory or by any foreign
government, the securities of which state, province, common wealth, territory,
political subdivision, taxing authority or foreign government (as the case may
be) are rated at least A by S&P or A by Moody's, (f) securities with maturities
of 90 days or less from the date of acquisition backed by standby letters of
credit issued by any Lender or any commercial bank satisfying the requirements
of clause (b) of this definition or (g) shares of money market mutual or similar
funds which invest exclusively in assets satisfying the requirements of clauses
(a) through (f) of this definition.
"CASH PROCEEDS OF REALIZATION" means the aggregate of (i) all Proceeds of
Realization in the form of cash and (ii) all cash proceeds of the sale or
disposition of non-cash Proceeds of Realization.
"CBCA" means the CANADA BUSINESS CORPORATIONS ACT as in effect on December 1,
2002.
"CDN$" denotes Canadian dollars.
"CHILECO" means Sociedad Contractual Minera El Toqui, a corporation incorporated
under the laws of Chile.
"COMMODITY HEDGING EXPOSURE" means, from time to time, the exposure of a Lender
under a commodity price hedging contract (expressed in United States dollars)
which, in the case of a hedging contract which has not been terminated as at
such time, shall be equal to the total amount which the relevant Obligor would
be obligated to pay to such Lender under such hedging contract in the event of
the early termination by such Lender as at such time of such hedging contract as
a result of the occurrence of a default or event of default (however specified
or designated) with respect to the relevant Obligor thereunder or, in the case
of a hedging contract which has been terminated as at such time, shall be equal
to the total amount which the relevant Obligor is obligated to pay to such
Lender under such hedging contract.
"COMMODITY HEDGING OBLIGATIONS" means with respect to an Obligor, all present
and future debts, liabilities and obligations of such Obligor to the Lenders
under or in connection with any put, call, forward, future, swap, option, cap or
collar or similar arrangement (or any combination of the
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foregoing, or any derivative thereof) relating to bullion, base metals or any
other commodity executed by such Obligor.
"COMPLIANCE CERTIFICATE" means a certificate signed on behalf of the Borrowers
by the chairman, president or any vice-president of BRL, substantially in the
form annexed hereto as Schedule B, to be delivered to the Administrative Agent
by the Borrowers pursuant hereto.
"CONCENTRATE" means, collectively, Lead Concentrate, Zinc Concentrate and Copper
Concentrate.
"CONSELL" means Consell Marketing, Inc., a corporation incorporated under the
laws of Barbados.
"CONSELL PURCHASE AND SALE AGREEMENTS" means the agreements of purchase and sale
entered into or to be entered into between Consell, the Administrative Agent and
each Obligor whose assets in a particular jurisdiction are not subject to a
perfected security interest (or equivalent) in favour of the Administrative
Agent with respect to the sale to Consell of all Concentrate production from all
of the Foreign Mines located in such jurisdiction and containing such charging
language as is sufficient to grant to the Administrative Agent a first charge
over such Concentrate production.
"CONTRAT XX XXXX" means the CONTRAT XX XXXX DE VALEURS MOBILIERES dated October
21, 1998 between BRL, the Administrative Agent and Tunisiaco pursuant to which
BRL, as continuing collateral security for the payment and performance of the
Secured Obligations, granted to the Administrative Agent a security interest in
and deposited in pledge with the Administrative Agent all of the issued and
outstanding shares of Tunisiaco which it then owned or subsequently acquired.
"COPPER CONCENTRATE" means the copper concentrate produced at the Mines.
"COPPER CONCENTRATE ACCOUNTS RECEIVABLE" means, for any Obligor, at any
particular time, Gross Accounts Receivable at such time which arise from the
sale of Copper Concentrate and which shall be measured as the aggregate payable
pounds of copper, the aggregate payable pounds of zinc, the aggregate payable
ounces of silver and the aggregate payable ounces of gold contained in the
Copper Concentrate delivered to purchasers of Copper Concentrate multiplied by
the London Metal Exchange official settlement price for each of copper and zinc
in pounds at such time, the London Metal Exchange silver fix and the London
Metal Exchange gold fix at such time less (i) the Provisional Payment paid to
the Obligor by such purchasers for such Copper Concentrate, and (ii) treatment
charges payable by the Obligor to such purchasers for such Copper Concentrate.
Upon a Final Reconciliation for a Copper Concentrate Accounts Receivable owing
from a purchaser of Concentrate, the amount thereof shall be the final amount,
if any, payable by such purchaser to such Obligor following delivery of such
Concentrate to such purchaser in accordance with the purchase agreement between
such purchaser and such Obligor.
"Copper Concentrate Inventory" means, at any particular time, the aggregate
payable pounds of copper, the aggregate payable pounds of zinc, the aggregate
payable ounces of silver and the aggregate payable ounces of gold contained in
the Copper Concentrate classified as inventory of the Obligors at such time
ready for sale (but excluding such inventory which is not subject to the
Security, which is subject to a Lien other than a Permitted Lien which ranks
PARI PASSU with or in priority to the Security or which has been pre-sold by the
Obligor to a purchaser of Copper Concentrate) multiplied by the London Metal
Exchange official settlement price for each of copper and zinc in pounds at such
time, the London Metal Exchange silver fix and the London Metal Exchange gold
fix at such time less (i) the estimated transportation charges payable by the
Obligor to
-8- EXECUTION COPY
third parties in the normal course of business for such Copper Concentrate, and
(ii) estimated treatment charges payable by the Obligor to purchasers of such
Copper Concentrate based on current agreements between the Obligor and such
purchasers of Copper Concentrate.
"CREDIT EVENT" means any one of the events set forth in Section 13.01.
"CREDIT EXCESS" means, as at a particular date, the amount, if any, by which the
amount of credit outstanding under the Revolving Facility as at the close of
business on such date exceeds the Revolving Credit Cap as at the close of
business on such date.
"CREDIT FACILITIES" means the Revolving Facility, the Non-Revolving Facility and
the Supplemental Term Facility and "Credit Facility" means any of the Credit
Facilities.
"CREDIT OBLIGATIONS" means all indebtedness, liabilities and obligations,
present or future, direct or indirect, absolute or contingent, matured or not,
of the Borrowers to the Administrative Agent, the Lenders or any of them under
this Agreement, the BRL Security Documents, the CZL Security Documents and any
cash management products and services with The Bank of Nova Scotia.
"CURRENT ASSETS" means at any time the property and assets of the Obligors
consisting of cash, Cash Equivalents, Accounts Receivable, Inventory, short-term
investments and other assets that would, in accordance with Generally Accepted
Accounting Principles and on a consolidated basis, be considered "current
assets" of BRL.
"CURRENT ASSETS PROCEEDS" means the aggregate of Cash Proceeds of Realization
consisting of or derived from Current Assets other than Current Assets
consisting of cash derived from the sale, disposition or realization of Fixed
Assets.
"CZL" means CanZinco Ltd., a corporation incorporated under the laws of Canada.
"CZL BONDS" means the bonds evidencing indebtedness of CZL to BRL under the
Related Party Indebtedness and issued pursuant to the trust indentures described
in the BRL Assignment of Indebtedness and Security.
"CZL DEBENTURE" means, collectively (a) the debenture dated Xxxxxx 00, 0000 xx
XXX in favour of the Administrative Agent, as the same may be amended, modified,
supplemented or replaced from time to time, and which was registered in certain
registries in the Northwest Territories, and (b) the debenture dated Xxxxxx 00,
0000 xx XXX in favour of the Administrative Agent, as the same may be amended,
modified, supplemented or replaced from time to time, and which was registered
in certain registries in the Province of New Brunswick.
"CZL DIRECTION AND ACKNOWLEDGMENT" means the irrevocable direction to be
delivered by CZL to each third party with whom it has entered into a commodity
hedging contract, in form and substance satisfactory to the Administrative Agent
and the Lenders, and pursuant to which CZL shall irrevocably direct each such
third party to pay any amounts payable by such third party to CZL under any such
commodity hedging contract to the Administrative Agent, for the benefit of the
Lenders, together with an acknowledgment from such third party, in form and
substance satisfactory to the Administrative Agent, confirming that such third
party agrees to comply with the terms of such irrevocable direction.
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"CZL SECTION 426 ASSIGNMENT" means the assignment of mineral properties pursuant
to Xxxxxxx 000 xx xxx Xxxx Xxx (Xxxxxx) dated Xxxxxx 00, 0000 xx XXX in favour
of the Administrative Agent, as the same may be amended, modified, supplemented,
replaced or renewed from time to time.
"CZL SECTION 427 ASSIGNMENTS" means the CZL/Scotiabank Section 427 Assignment
and any other assignment of inventory entered into by CZL in favour of a Lender
pursuant to Section 427 of the Bank Act (Canada) from time to time, in form and
substance satisfactory to the Administrative Agent and any such Lender, as each
such assignment may be amended, modified, supplemented, replaced or renewed from
time to time.
"CZL SECURITY AGREEMENT" means the general security agreement made as of Xxxxxx
00, 0000 xx XXX in favour of the Administrative Agent, as the same may be
amended, modified, supplemented or replaced from time to time, and pursuant to
which CZL, as continuing collateral security for the payment and performance of
the Secured Obligations, granted to the Administrative Agent a security interest
in all of its present and future personal property, assets and undertaking.
"CZL SECURITY DOCUMENTS" means the CZL Debenture, the CZL Section 426
Assignment, the XXX Xxxxxxx 000 Xxxxxxxxxxx, xxx XXX Direction and
Acknowledgment and the CZL Security Agreement.
"CZL/SCOTIABANK SECTION 427 ASSIGNMENT" means the assignment of inventory
pursuant to Xxxxxxx 000 xx xxx Xxxx Xxx (Xxxxxx) dated Xxxxxx 00, 0000 xx XXX in
favour of The Bank of Nova Scotia, as the same may be amended, modified,
supplemented, replaced or renewed from time to time.
"DEBT" means all obligations, liabilities and indebtedness which would, in
accordance with Generally Accepted Accounting Principles, be classified upon a
consolidated statement of financial position of BRL as liabilities of BRL and,
whether or not so classified, shall include (without duplication):
(a) indebtedness of BRL and its subsidiaries for borrowed money;
(b) obligations of BRL and its subsidiaries arising pursuant to
bankers' acceptance facilities, commercial paper programs, or
letters of credit or indemnities issued in connection therewith;
(c) obligations of BRL and its subsidiaries under guarantees,
indemnities, assurances, sureties, reclamation bonds, legally
binding comfort letters or other contingent obligations relating
to the indebtedness of any other person and all other
obligations incurred for the purpose of or having the effect of
providing financial assistance to another Person, including,
without limitation, endorsements of bills of exchange (other
than for collection or deposit in the ordinary course of
business);
(d) all obligations of BRL and its subsidiaries created or arising
under any conditional sales agreement or other title retention
agreement or under any capital lease or other lease financing,
including without limitation the present value of future rental
payments under all synthetic leases;
(e) deferred revenues relating to third party obligations; and
-10- EXECUTION COPY
(f) obligations in respect of commodity price hedging, interest rate
hedging and foreign exchange rate hedging facilities entered
into for speculative purposes (determined, where relevant, by
reference to Generally Accepted Accounting Principles) or other
than in the ordinary course of business.
"DEFAULT" means any event which is or which, with the passage of time, the
giving of notice or both, would be an Event of Default.
"DESIGNATED ACCOUNT" means, with respect to a particular Borrower and
transactions in a particular currency under the Credit Facilities, an account of
such Borrower maintained by the Administrative Agent at the Branch of Account
for the purposes of transactions with such Borrower in such currency under the
Credit Facilities.
"DISTRIBUTION" means:
(a) the declaration, payment or setting aside for payment of any
dividend or other distribution on or in respect of any shares in
the capital of BRL; and
(b) the redemption, retraction, purchase, retirement or other
acquisition, in whole or in part, of any shares in the capital
of BRL or any securities, instruments or contractual rights
capable of being converted into, exchanged or exercised for
shares in the capital of BRL, including, without limitation,
options, warrants, conversion or exchange privileges and similar
rights.
"$" denotes United States dollars.
"DOMESTIC ACCOUNTS RECEIVABLE" means Accounts Receivable which are related to
the operation of the Domestic Mines.
"DOMESTIC INVENTORY" means Inventory located in Canada or the United States of
America.
"DOMESTIC MINES" means the Caribou Mine, the Nanisivik Mine, the Xxxxxxxx-Xxxxxx
Mine, the Xxxxxxxx Mine and any other mine which is owned and operated by an
Obligor and is located in Canada or the United States of America.
"DRAFT" means any draft, xxxx of exchange, receipt, acceptance, demand or other
request for payment drawn or issued under or in respect of a Letter.
"DRAWDOWN NOTICE" has the meaning ascribed thereto in Section 4.01.
"DUNDEE" means Dundee Bancorp Inc., a corporation subsisting under the laws of
the Province of Ontario, and its successors and assigns.
"DUNDEE LETTER OF CREDIT" means the irrevocable standby letter of letter of
credit number S18572/168475, originally dated November 16, 2001, in the original
principal amount of $6,500,000, as extended by amendment dated January 31, 2003,
issued in favour of the Administrative Agent by The Bank of Nova Scotia at the
request of Dundee, a copy of which as the same exists on the date hereof is
attached hereto as Schedule N, and any renewal, amendment or extension thereof
or substitution therefor.
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"DUNDEE PARTICIPATION AGREEMENT" means the Further Amended and Restated Security
Sharing and Participation Agreement dated as of November 25, 2003, between
Dundee and the Administrative Agent, as the same may be further amended,
modified, supplemented or replaced from time to time.
"DUNDEE TAKE-OUT FINANCING" means financing provided by Dundee or any affiliate
thereof by way of common equity or by way of Debt that by its terms is deeply
and fully subordinated to the Security and fully postponed in right of payment
to the Secured Obligations.
"EL MOCHITO MINE" means the zinc/lead/silver underground mine which is owned and
operated by Hondurasco and which is located near the town of Las Vegas in
north-west Honduras.
"EL TOQUI MINE" means the zinc/gold/silver/copper/lead mine which is owned and
operated by Chileco and which is located in Chile's Region XI.
"ENVIRONMENTAL CLAIMS" means any and all administrative, regulatory or judicial
actions, suits, demands, claims, liens, notices of non-compliance or violation,
investigations, inspections, inquiries or proceedings relating in any way to any
Environmental Laws or to any permit issued under any such Environmental Laws
including, without limitation:
(a) any claim by an Official Body for enforcement, clean-up,
removal, response, remedial or other actions or damages pursuant
to any Environmental Laws; and
(b) any claim by a Person seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive or
other relief resulting from or relating to Hazardous Materials,
including any Release thereof, or arising from alleged injury or
threat of injury to human health or safety (arising from
environmental matters) or the environment.
"ENVIRONMENTAL LAWS" means all applicable federal, state, provincial or local
statutes, laws, ordinances, codes, rules and regulations (including consent
decrees and administrative orders) relating to public health and safety and
protection of the natural environment.
"ENVIRONMENTAL ORDERS" includes all applicable orders, directives, judgements,
decisions or the like rendered by any Official Body pursuant to Environmental
Laws or Environmental Permits.
"ENVIRONMENTAL PERMITS" includes all permits, certificates, approvals,
registrations, licences or other instruments issued by any Official Body and
relating to or required for BRL or its subsidiaries to carry on their business,
activities and operations in compliance with all Environmental Laws and
Environmental Orders.
"EQUITY" means, at any particular time, the amount which would, in accordance
with Generally Accepted Accounting Principles, be classified on the consolidated
balance sheet of BRL at such time (excluding any such amount relating to
Non-Recourse Subsidiaries) as shareholders' equity.
"ESCROW RELEASE DATE" means the date on which the proceeds of the October
Offering are released from escrow upon satisfaction of the escrow conditions set
out in the underwriting agreement relating to the October Offering.
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"EVENT OF DEFAULT" has the meaning ascribed thereto in Section 13.02.
"EXCESS CASH FLOW" in respect of a particular Fiscal Quarter, means an amount
equal to the sum of (a) BRL's positive change in cash position, if any, as at
the end of such Fiscal Quarter, as reflected in its consolidated statement of
cash flows for such Fiscal Quarter; plus (b) the amount, if any, by which
Capital Expenditures for such Fiscal Quarter exceed the Quarterly Cap Ex Limit
(as hereinafter defined) for such Fiscal Quarter. The "Quarterly Cap Ex Limit"
for the Fiscal Quarter ending December 31, 20031 and each Fiscal Quarter of the
2004 Fiscal Year is the amount set out in the table below opposite such Fiscal
Quarter.
QUARTER ENDING: QUARTERLY CAP EX LIMIT (IN CDN$)
--------------- --------------------------------
December 31, 2003 $3,055,000
March 31, 2004 $5,179,000
June 30, 2004 $4,405,000
September 30, 2004 $3,131,000
December 31, 2004 $2,853,000
The Quarterly Cap Ex Limit for each Fiscal Quarter of each subsequent Fiscal
Year will be determined annually by the Administrative Agent after consultation
with BRL prior to December 31 of the Fiscal Year preceding the Fiscal Year for
which the Quarterly Cap Ex Limits are to be determined, and in default of such
determination for a Fiscal Year, the Quarterly Cap Ex Limits for such Fiscal
Year will be the same as those for the previous Fiscal Year; provided, however,
that to the extent that the Quarterly Cap Ex Limit for a particular Fiscal
Quarter exceeds BRL's actual Capital Expenditures for such Fiscal Quarter, the
Quarterly Cap Ex Limit for the next succeeding Fiscal Quarter shall be deemed to
be increased by the amount of such excess.
The following shall not constitute "cash" for purposes of the calculation of
Excess Cash Flow for a Fiscal Quarter: (i) the proceeds of any Dundee Take-Out
Financing; and (ii) the amount of any prepayment for Zinc Concentrate received
by BRL under the Pechiney Presale Contract.
"EXCHANGE EQUIVALENT" means, as of any particular date, with reference to any
amount (the "original amount") expressed in Canadian dollars or United States
dollars (the "original currency"), the amount expressed in the other currency
which would be required to buy the original amount of the original currency
using the noon spot rate quoted by the Administrative Agent for such date and
for comparable amounts of such original currency.
"EXISTING CREDIT AGREEMENT" has the meaning ascribed thereto in the first
recital hereof.
--------
1 Note to Draft: This is included so that excess cap ex for Q4 2003 can be
carried forward to Q1 2004.
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"EXPOSURE" means, with respect to a particular Lender, the amount of the Secured
Obligations (without duplication) which are owing to such Lender, determined in
accordance with Section 14.19.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any particular day, the variable rate
of interest per annum, calculated on the basis of a year of 360 days and for the
actual number of days elapsed, equal 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 Banking Day, for the next preceding Banking Day) by the Federal Reserve
Bank of New York or, for any Banking Day on which such rate is not so published
by the Federal Reserve Bank of New York, from three Federal Funds brokers of
recognized standing selected by the Administrative Agent.
"FEE LETTERS" means any letters between the Borrowers, the Administrative Agent,
the Syndication Agent, the Lenders and/or Standard pursuant to which the
Borrowers agree to pay any fees in connection with this Agreement in addition to
those fees set out herein.
"FINAL RECONCILIATION" means, with respect to Concentrate purchased from an
Obligor, the final amount payable by the purchaser of such Concentrate to the
Obligor or by the Obligor to such purchaser of such Concentrate following
delivery of such Concentrate to such purchaser and payment by such purchaser to
the Obligor of the Provisional Payment.
"FINANCIAL STATEMENTS" means the audited consolidated financial statements of
BRL for the fiscal year ending on December 31, 2002 and the unaudited
consolidated financial statements of BRL for the fiscal quarters endings on
March 31, June 30 and September 30, 2003.
"FISCAL QUARTER" means any of the three-month periods ending on the last day of
March, June, September and December in each year.
"FISCAL YEAR" means any of the twelve-month periods ending on the last day of
December in each year.
"FIXED ASSETS" means the property and assets of the Obligors other than Current
Assets and including, for greater certainty, the Mines, plant and equipment and
the shares of the Material Subsidiaries pledged to the Administrative Agent
pursuant to the BRL Pledge Agreement.
"FIXED ASSETS PROCEEDS" means the aggregate of Cash Proceeds of Realization
derived from Fixed Assets.
"FONDE DE POUVOIR" has the meaning ascribed thereto in Section 14.01(b)(i).
"FOREIGN ACCOUNTS RECEIVABLE" means Accounts Receivable which are related to the
operation of Foreign Mines.
"FOREIGN INVENTORY" means Inventory located outside of Canada and the United
States of America.
"FOREIGN MINES" means the Bougrine Mine, the El Mochito Mine, the El Toqui Mine
and any other mine which is owned and operated by an Obligor and is located
outside Canada and the United States of America.
-14- EXECUTION COPY
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means generally accepted accounting
principles in effect in Canada from time to time consistently applied, as
recommended in the Handbook of the Canadian Institute of Chartered Accountants.
"GROSS ACCOUNTS RECEIVABLE" means, at any particular time, an amount equal to
the aggregate amount of the entries which would, in accordance with Generally
Accepted Accounting Principles, be classified on the consolidated balance sheet
of BRL (excluding Non-Recourse Subsidiaries) as trade accounts receivable at
such time and each of which:
(i) is due and payable to an Obligor,
(ii) has arisen from a BONA FIDE sale of Concentrate by an Obligor in
the ordinary course of its business with customary proof of
delivery in the possession of such Obligor,
(iii) is not subject to any Lien other than in favour of the Lenders,
(iv) is not subject to garnishment, execution, attachment or similar
process which is not being contested in good faith by
appropriate proceedings,
(v) is the legal, valid and binding obligation of the account debtor
thereof,
(vi) has been assigned to the Lenders as security,
(vii) is not subject to any deduction, set-off, claim for credit,
allowance, adjustment, counterclaim or partial discharge,
(viii) is not an intercompany account receivable due from one Obligor
to another,
(ix) is not an account receivable due from an account debtor that is
the subject of bankruptcy or insolvency proceedings; and
(x) is not an account receivable that has been outstanding for 90
days or more.
"GUARANTEE OBLIGATIONS" means all present and future debts, liabilities and
obligations of BRL Borrowers to the Lenders under or in connection with the
Subsidiary Guarantee.
"GUARANTEES" means the unlimited, unconditional and irrevocable guarantee
agreements entered into or to be entered into by each Material Subsidiary in
favour of the Administrative Agent, in form and substance satisfactory to the
Administrative Agent and the Lenders and as the same may be amended, modified,
supplemented or replaced from time to time, and pursuant to which each Material
Subsidiary guarantees the payment of the Secured Obligations of BRL.
"HAZARDOUS MATERIALS" means any pollutant or contaminant or hazardous or toxic
chemical, waste, material or substance within the meaning of any applicable
federal, state, provincial or local law, regulation, ordinance or requirement
(including consent decrees and administrative orders) relating to or imposing
liability or standards of conduct concerning any hazardous or toxic chemical,
waste, substance or material.
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"HEDGING OBLIGATIONS" means, from time to time, all debts, liabilities and
obligations of the Obligors to the Lenders at such time under or in connection
with (a) Non-Commodity Hedging Obligations at such time or times, and (b)
Commodity Hedging Obligations at such time or times less the amount of Cash
Collateral at such time.
"HONDURASCO" means American Pacific Honduras S.A. de C.V., a corporation
incorporated under the laws of Honduras.
"INDIVIDUAL COMMITMENT" means, with respect to a particular Lender, the
aggregate of the amounts set forth in Schedule A attached hereto, as reduced or
amended from time to time pursuant to Sections 2.04, 8.03, 9.03, 9.04 and 15.06,
as the individual commitments of such Lender under the Credit Facilities,
provided that, upon the termination of a Credit Facility pursuant to Section
2.05, the Individual Commitment of each Lender under such Credit Facility shall
thereafter be equal to the amount of outstanding credit extended to the
Borrowers by such Lender under such Credit Facility immediately prior to the
termination of such Credit Facility.
"INTEREST PERIOD" means, in the case of any LIBOR Loan, the applicable period
for which interest on such LIBOR Loan shall be calculated in accordance with
Article 7 of this Agreement.
"INVENTORY" means, at any particular time, the aggregate of Lead Concentrate
Inventory, Zinc Concentrate Inventory and Copper Concentrate Inventory at such
time.
"ISSUING LENDER" means The Bank of Nova Scotia or any other Lender selected by
the Administrative Agent and acceptable to the Borrowers who assumes in writing
with the Borrowers, the Lenders and the Administrative Agent the obligation of
issuing Letters under the Revolving Facility on behalf of the Lenders.
"XXXXXXXX MINE" means the underground polymetallic mine which is owned and
operated by BRL and located near the town of Quevillon in the northwestern
portion of the Province of Quebec.
"LAPA PROCEEDS" means the proceeds of the sale by BRL of 100% of its Tonawanda
and Zulapa gold properties, known collectively as the Lapa property, to
Agnico-Eagle Mines Limited on or about June 16, 2003.
"LEAD CONCENTRATE" means the lead concentrate produced at the Mines.
"LEAD CONCENTRATE ACCOUNTS RECEIVABLE" means, for any Obligor, at any particular
time, Gross Accounts Receivable at such time which arise from the sale of Lead
Concentrate and which shall be measured as the aggregate payable pounds of lead,
the aggregate payable pounds of copper, the aggregate payable pounds of zinc,
the aggregate payable ounces of silver and the aggregate payable ounces of gold
contained in the Lead Concentrate delivered to purchasers of Lead Concentrate
multiplied by the London Metal Exchange official settlement price for each of
lead, copper and zinc in pounds at such time, the London Metal Exchange silver
fix and the London Metal Exchange gold fix at such time less (i) the Provisional
Payment paid to the Obligor by such purchasers for such Lead Concentrate, and
(ii) treatment charges payable by the Obligor to such purchasers for such Lead
Concentrate. Upon a Final Reconciliation for a Lead Concentrate Accounts
Receivable owing from a purchaser of Concentrate, the amount thereof shall be
the final amount, if any, payable by such purchaser to such Obligor following
delivery of such Concentrate to such purchaser in accordance with the purchase
agreement between such purchaser and such Obligor.
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"LEAD CONCENTRATE INVENTORY" means, at any particular time, the aggregate
payable pounds of lead, the aggregate payable pounds of copper, the aggregate
payable pounds of zinc, the aggregate payable ounces of silver and the aggregate
payable ounces of gold contained in the Lead Concentrate classified as inventory
of the Obligors at such time ready for sale (but excluding such inventory which
is not subject to the Security, which is subject to a Lien other than a
Permitted Lien which ranks PARI PASSU with or in priority to the Security or
which has been pre-sold by the Obligor to a purchaser of Lead Concentrate)
multiplied by the London Metal Exchange official settlement price for each of
lead, copper and zinc in pounds at such time, the London Metal Exchange silver
fix and the London Metal Exchange gold fix at such time less (i) the estimated
transportation charges payable by the Obligor to third parties in the normal
course of business for such Lead Concentrate, and (ii) estimated treatment
charges payable by the Obligor to purchasers of such Lead Concentrate based on
current agreements between the Obligor and such purchasers of Lead Concentrate.
"LENDER" has the meaning given to it on page 1 of this Agreement. Standard shall
be deemed to be a Lender for the sole purpose of ensuring that any debts,
liabilities and obligations of an Obligor to Standard of the type described in
the definition of "Hedging Obligations" are secured by the Security.
"LETTER" means a standby letter of credit denominated in Canadian or United
States dollars and in form satisfactory to and issued by the Issuing Lender for
a term not exceeding two years whereby the Issuing Lender, acting at the request
of and in accordance with the instructions of the relevant Borrower, is to make
payment in accordance with the terms and conditions thereof of an amount to or
to the order of a third party, but for greater certainty does not include the
Dundee Letter of Credit.
"LIBOR" means the rate of interest per annum, calculated on the basis of a year
of 360 days, determined by the Administrative Agent for a particular Interest
Period to be the rate of interest per annum that appears as such on the Telerate
Screen Page 3750 (or any replacement thereof) at 11:00 a.m. (London time) on the
second Banking Day prior to the commencement of such Interest Period.
"LIBOR LOAN" means monies lent by a Lender to a Borrower in United States
dollars and upon which interest accrues at a rate referable to LIBOR.
"LIEN" means any deed of trust, mortgage, charge, hypothec, assignment, pledge,
lien, vendor's privilege, royalty agreement, supplier's right of reclamation or
other security interest or encumbrance of whatever kind or nature, regardless of
form and whether consensual or arising by law (statutory or otherwise), that
secures the payment of any indebtedness or liability or the observance or
performance of any obligation.
"LOAN DOCUMENTS" means this Agreement, the Guarantees, the Security Documents,
the Subsidiary Guarantee, the Fee Letters and all documents evidencing Hedging
Obligations, all account operating agreements between a Borrower and any Lender
and all cash management agreements between a Borrower and any Lender.
"LOANS" means Prime Rate Loans, ABRCAN Loans, LIBOR Loans and Overdraft Loans.
"MAINTENANCE CAPITAL EXPENDITURES" means those expenditures required to maintain
a commercially acceptable level of mine operations until the end of the proven
and probable minable reserves of the Obligors.
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"MAJORITY LENDERS" means, at any particular time, such group of Lenders whose
Individual Commitments aggregate greater than two-thirds of the aggregate of the
Individual Commitments of all the Lenders at such time.
"MATERIAL ADVERSE CHANGE" means any change or circumstances or event which could
reasonably be expected to have a Material Adverse Effect.
"MATERIAL ADVERSE EFFECT" means a material adverse effect (or a series of
directly related adverse effects, none of which is material in and of itself but
which, cumulatively, result in a material adverse effect) on:
(a) the financial condition of BRL on a consolidated basis and taken
as a whole;
(b) the ability of any Obligor to perform its obligations under any
of the Loan Documents;
(c) the ability of the Lenders or the Administrative Agent to
enforce any obligations of any Obligor under any of the Loan
Documents in accordance with Applicable Laws; or
(d) the property, business, operations, liabilities or
capitalization of BRL on a consolidated basis and taken as a
whole.
"MATERIAL SUBSIDIARY" means Chileco, Consell, Hondurasco, Santa Xxxxxxx,
Tunisiaco or any other subsidiary of BRL which is designated as a Material
Subsidiary by the Majority Lenders pursuant to Section 11.02(m).
"MATERIAL SUBSIDIARY DIRECTIONS AND ACKNOWLEDGMENTS" means the irrevocable
direction to be delivered by each Material Subsidiary to each third party with
whom it has entered into a commodity hedging contract, in form and substance
satisfactory to the Administrative Agent and the Lenders, and pursuant to which
each such Material Subsidiary shall irrevocably direct each such third party to
pay any amounts payable by such third party to each such Material Subsidiary
under any such commodity hedging contract to the Administrative Agent, for the
benefit of the Lenders, together with an acknowledgment from such third party,
in form and substance satisfactory to the Administrative Agent, confirming that
such third party agrees to comply with the terms of such irrevocable direction.
"MATERIAL SUBSIDIARY PLEDGE AGREEMENTS" means the pledge agreements entered into
or to be entered into in favour of the Administrative Agent by Santa Xxxxxxx and
any other subsidiary of BRL which is designated as a Material Subsidiary by the
Majority Lenders pursuant to Section 11.02(m), in form and substance
satisfactory to the Administrative Agent and the Lenders and as the same may be
amended, modified, supplemented or replaced from time to time, and pursuant to
which each such Material Subsidiary, as continuing collateral security for all
its present and future indebtedness, liabilities and obligations under or in
connection with its Guarantee or any other Loan Document to which it is a party,
grants to the Administrative Agent a security interest in and deposits in pledge
with the Administrative Agent all of the issued and outstanding shares of other
Obligors which it owns (or, where required under the laws of a foreign
jurisdiction, security documents to like effect).
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"MATERIAL SUBSIDIARY SECURITY AGREEMENTS" means the Nantissement and the general
security agreements entered into or to be entered into in favour of the
Administrative Agent by each of Consell, Santa Xxxxxxx and any other subsidiary
of BRL which is designated as a Material Subsidiary by the Majority Lenders
pursuant to Section 11.02(m), in form and substance satisfactory to the
Administrative Agent and the Lenders and as the same may be amended, modified,
supplemented or replaced from time to time, and pursuant to which each such
Material Subsidiary, as continuing collateral security for all its present and
future indebtedness, liabilities and obligations under or in connection with its
Guarantee or any other Loan Document to which it is a party, grants a security
interest in all of its present and future personal property, assets and
undertaking (or, where required under the laws of a foreign jurisdiction,
security documents to like effect).
"MATERIAL SUBSIDIARY SECURITY DOCUMENTS" means the Material Subsidiary Pledge
Agreements, the Material Subsidiary Directions and Acknowledgments, the Material
Subsidiary Security Agreements, the Consell Purchase and Sale Agreements, the
Tunisiaco Amended Security and any other security agreements required by the
Administrative Agent to secure assets of Material Subsidiaries.
"MINE PLAN" means the financial plan for a mine where BRL or any of its
subsidiaries (excluding Non-Recourse Subsidiaries) is mining or intends to mine
(whether directly or indirectly through or with another Person), and which plan
shall include, for at least 5 years, life-of-mine plans (if prepared) for such
mine, particulars of the Maintenance Capital Expenditures and expansion capital
expenditures for such mine and projected mineral production, costs of production
and revenue from such mine, such plan to be approved by BRL's management.
"MINES" means the Domestic Mines and the Foreign Mines and "MINE" means any one
of the Mines.
"NANISIVIK MINE" means the mine which is owned and operated by CZL and which is
located in Nanisivik, Nunavut.
"NANTISSEMENT" means the contrat de pret avec nantissement dated October 21,
1998 between Tunisiaco and the Administrative Agent pursuant to which Tunisiaco,
as continuing collateral security for the payment and performance of the Secured
Obligations, granted to the Administrative Agent a security interest in the
personal property of Tunisiaco identified therein.
"NON-COMMODITY HEDGING OBLIGATIONS" means, with respect to an Obligor, all
present and future debts, liabilities and obligations of such Obligor to the
Lenders under or in connection with any put, call, forward, future, swap,
option, cap or collar or similar arrangement (or any combination of the
foregoing, or any derivative thereof) relating to interest rates and foreign
exchange rates executed by such Obligor.
"NON-RECOURSE SUBSIDIARY" means a subsidiary (excluding, for greater certainty,
a Material Subsidiary) of BRL which operates on a stand-alone basis without any
financial assistance from BRL (other than by way of investments permitted
pursuant to Section 11.04(j) hereof) or any subsidiary of BRL.
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"NON-REVOLVING FACILITY" means the non-revolving term credit facility
established by the Lenders in favour of the Borrowers pursuant to Section
2.01(a)(ii).
"NOTICE OF ASSIGNMENT" means a notice in the form of Schedule K hereto to a
purchaser of Inventory from an Obligor of the assignment of Accounts Receivable
by such Obligor to the Administrative Agent.
"OBLIGORS" means the Borrowers and the Material Subsidiaries.
"OCF PROJECTIONS" means the 5-year operating budget and projections prepared in
February of 2000 and attached as Schedule H hereto, as updated from time to time
pursuant to Section 11.02(b)(ix).
"OCTOBER OFFERING" means BRL's offering of 85.8 million subscription receipts
that was completed on October 7, 2003.
"OFFICER'S CERTIFICATE" means a certificate or notice (other than a Compliance
Certificate) signed by any one of the president, a vice-president, the
treasurer, the controller or the corporate secretary of BRL.
"OFFICIAL BODY" means any national government or government of any political
subdivision thereof, or any parliament, legislature, council, agency, authority,
board, central bank, monetary authority, commission, department or
instrumentality thereof, or any court, tribunal, grand jury, mediator or
arbitrator, whether foreign or domestic, in each case having jurisdiction in the
relevant circumstances.
"OFFICIAL BODY CONSENT" means any licence, right, permit, franchise, privilege,
registration, direction, decree, consent, order, permission, approval or
authority to be issued or provided by an Official Body.
"ORDER" means an order, judgment, injunction or such other determination
restricting payment by the Issuing Lender under and in accordance with a Letter
or extending the Issuing Lender's liability under a Letter beyond the expiration
date stated therein.
"OVERDRAFT LENDER" means The Bank of Nova Scotia or any other Lender selected by
the Administrative Agent and acceptable to the Borrowers who assumes in writing
with the Borrowers, the Lenders and the Administrative Agent the obligation of
making Overdraft Loans under the Revolving Facility.
"OVERDRAFT LOAN" has the meaning ascribed thereto in Section 3.12.
"PECHINEY PRESALE CONTRACT" means the agreement dated August 9, 2001 between BRL
and Pechiney World Trade (U.S.A.), Inc., ("Pechiney") pursuant to which Pechiney
agreed to make payments of up to $4,000,000 to BLR for Zinc Concentrate in
advance of deliveries thereof.
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"PERMITTED DEBT" means, without duplication:
(a) Debt incurred in the ordinary course of business to trade
creditors or other persons providing services to the Borrowers
or any of the Material Subsidiaries (in accordance with
customary trade terms);
(b) Debt which is secured by a Permitted Lien;
(c) the Secured Obligations;
(d) Debt which constitutes taxes payable and deferred taxes;
(e) Debt which constitutes liabilities in respect of deferred
reclamation costs;
(f) Debt of Chileco to its local banker not to exceed the amount of
$500,000;
(g) Debt of Hondurasco to its local banker not to exceed the amount
of $500,000;
(h) Debt of companies which become subsidiaries of BRL after the
date hereof, which Debt is outstanding at the time any such
company so becomes a subsidiary;
(i) performance guarantees provided in the ordinary course of
business to persons other than financial institutions or
affiliates thereof; provided that, for certainty, no such
guarantee shall include a guarantee of indebtedness for borrowed
money;
(j) Debt of a Non-Recourse Subsidiary;
(k) Debt of BRL to the Quebec Ministry of Natural Resources in the
principal amount of Cdn.$925,000 and in the principal amount of
Cdn.$500,000 assumed in connection with the acquisition of the
Xxxxxxxx-Xxxxxx Mine and the Xxxxxxxx Mine; or
(l) Debt incurred pursuant to any Dundee Take-Out Financing,
provided that the Borrower uses the proceeds of such financing
to repay Credit Obligations outstanding under the Supplemental
Term Facility.
"PERMITTED LIENS" means any one or more of the following with respect to the
property and assets of the Obligors:
(a) Liens for taxes, assessments or governmental charges which are
not due and delinquent, or the validity of which the Obligor
shall be contesting in good faith; provided the Obligor shall
have made adequate provision (in accordance with Generally
Accepted Accounting Principles) on its books therefor;
(b) the Lien of any judgment rendered, or claim filed, against the
Obligor which the Obligor shall be contesting in good faith;
provided the relevant Obligor shall have made adequate provision
(in accordance with Generally Accepted Accounting Principles) on
its books therefor;
(c) liens, privileges or other charges imposed or permitted by law
such as statutory liens and deemed trusts, carriers' liens,
builders' liens, warehousemen's liens, mechanics'
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liens, materialmen's liens and other liens, privileges or other
charges of a similar nature which relate to obligations which
are not due and delinquent or if due and delinquent the validity
of which is being contested at the time in good faith, if the
Obligor shall have made adequate provision (in accordance with
Generally Accepted Accounting Principles) therefor and if such
contestation will not involve forfeiture of any of its assets or
any part thereof having a book value in excess of Cdn. $500,000
or the U.S. Dollar Equivalent thereof;
(d) undetermined or inchoate Liens arising in the ordinary course of
and incidental to construction, maintenance or current
operations of the Obligor which relate to obligations which are
not due and delinquent, or the validity of which the Obligor
shall be contesting in good faith; provided the Obligor shall
have made adequate provision (in accordance with Generally
Accepted Accounting Principles) on its book therefor;
(e) Liens in favour of a public utility or any municipality or
governmental or other public authority when required by such
utility, municipality or authority in connection with the
operations of the Obligor to the extent such security does not
materially detract from the value of any material part of the
property of the Obligor;
(f) Liens securing the performance of bids, tenders, leases,
contractors (other than for the repayment of indebtedness),
statutory obligations, appeal bonds and performance bonds and
other obligations of like nature, incurred as incidental to and
in the ordinary course of business of the Obligor, and judgment
liens; provided however, that all such Liens neither singularly
nor in the aggregate secure obligations in excess of Cdn.
$500,000 or the U.S. Dollar Equivalent thereof;
(g) the Lien or any right of distress reserved in or exercisable
under any real property lease for rent or otherwise to effect
compliance with the terms of such lease in respect of which the
rent or other obligations is not at the time overdue or if
overdue the validity of which is being contested at the time in
good faith, if the Obligor shall have made on its books a
provision reasonably deemed by the Majority Lenders to be
adequate therefor;
(h) Purchase Money Security Interests; provided that the foregoing
Liens are limited to all or any part of the property or assets
purchased or acquired and provided further that such Liens shall
not secure obligations which, in aggregate at any time, exceed
Cdn. $500,000 or the U.S. Dollar Equivalent thereof;
(i) capital leases and operating leases in respect of machinery and
equipment detailed in Approved Mine Plans, provided that the
obligations of the lessees thereunder shall not, in the
aggregate at any time, exceed Cdn.$500,000 or the U.S. Dollar
Equivalent thereof;
(j) the reservations, limitations, provisos and conditions, if any,
expressed in any original grants from the Crown;
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(k) the net smelter return royalty in favour of a subsidiary of
Xxxxxxx Gold Corporation with respect to the El Toqui Mine in
effect as at the date hereof without amendment or modification;
(l) the net smelter return royalty in favour of Her Majesty the
Queen in Right of the Province of New Brunswick with respect to
the Caribou Mine in effect as at the date hereof without
amendment or modification;
(m) the net profits royalty agreement with Fern Trust with respect
to the Caribou Mine in effect as at the date hereof without
amendment or modification;
(n) the net profits royalty agreement with Xxxxxxxx Mining Corp.
with respect to the Caribou Mine in effect as at the date hereof
without amendment or modification;
(o) Liens on assets of companies at the time which they become
subsidiaries of BRL;
(p) Liens granted pursuant to the Security Documents;
(q) Liens securing environmental bonds or on cash collateral
deposits required by any Official Body to be delivered to such
Official Body in connection with obligations imposed upon any
Obligor pursuant to Environmental Laws or mining laws, provided
that the obligations of the Obligors thereunder shall not, in
the aggregate at any time, exceed Cdn. $20,000,000;
(r) Liens in the form of Cash Collateral securing margin obligations
of an Obligor under any hedging obligations, (including, for
greater certainty, the Hedging Obligations), provided that the
value of Cash Collateral of all Obligors secured by such Liens
shall not, in the aggregate, exceed $5,000,000 (subject to
Section 11.02(ff) hereof);
(s) such other Liens as may be consented to in writing by the
Lenders;
(t) Liens on property of Non-Recourse Subsidiaries securing Debt of
Non-Recourse Subsidiaries; (u) the Liens on assets acquired from
Cambior Inc. described in Schedule M hereto;
(v) Liens securing any Dundee Take-Out Financing, provided that all
such Liens:
(i) rank subordinate and have been expressly deeply
subordinated to all the Liens granted pursuant to the
Security Documents pursuant to an intercreditor
agreement in form and substance satisfactory to the
Administrative Agent and the Lenders;
(ii) affect only assets or property that constitute Secured
Assets; and
(iii) do not encumber or otherwise affect any of the assets or
property of any of the Borrowers or the Material
Subsidiaries that do not constitute Secured Assets;
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(w) any extension, renewal or replacement (or successive extensions,
renewals or replacements), as a whole or in part, of any Lien
referred to in the preceding paragraphs (a) to (v) inclusive of
this definition, so long as any such extension, renewal or
replacement of such Lien is limited (except with respect to
Liens referred to in paragraph (t) of this definition) to all or
any part of the same property that secured the Lien extended,
renewed or replaced (plus improvements on such property) and the
indebtedness or obligation secured thereby is not increased;
provided that nothing in this definition or this Agreement shall (x) be
construed as evidencing an intention or agreement on the part of the
Administrative Agent or the Lenders that the Security or the Secured Obligations
hereunder be or have been subordinated to any such Permitted Lien, or (y) cause
any such subordination to occur.
"PERSON" means any natural person, corporation, firm, partnership, joint
venture, joint stock company, incorporated or unincorporated association,
government, governmental agency or any other entity, whether acting in an
individual, fiduciary or other capacity.
"PRIME RATE" means the variable rate of interest per annum equal to the rate of
interest determined by the Administrative Agent from time to time as its prime
rate for Canadian dollar loans made by the Administrative Agent in Canada from
time to time, being a variable per annum reference rate of interest adjusted
automatically upon change by the Administrative Agent, calculated on the basis
of a year of 365 days, or 366 days in the case of a leap year.
"PRIME RATE LOAN" means monies lent by a Lender to a Borrower hereunder in
Canadian dollars and upon which interest accrues at a rate referable to the
Prime Rate.
"PRO RATA SHARE" means, at any particular time with respect to a particular
Lender and a particular Credit Facility, the ratio of the Individual Commitment
of such Lender under such Credit Facility at such time to the aggregate of the
Individual Commitments of all of the Lenders under such Credit Facility at such
time.
"PROCEEDS OF REALIZATION" means all cash and non-cash proceeds derived from any
sale, disposition or other realization of the Secured Assets or received
pursuant to a Guarantee:
(a) after any notice by the Administrative Agent to the Borrowers
pursuant to Section 13.03 declaring all indebtedness of the
Borrowers hereunder to be immediately due and payable,
(b) upon any dissolution, liquidation, winding-up, reorganization,
bankruptcy, insolvency or receivership of any of the Obligors
(or any other arrangement or marshalling of the Secured Assets
that is similar thereto), or
(c) upon the enforcement of; or any action taken with respect to,
any of the Security Documents or Guarantees. For greater
certainty, insurance proceeds derived as a result of the loss or
destruction of any of the Secured Assets or cash or non-cash
proceeds derived from any expropriation or other condemnation of
any of the Secured Assets, in each case provided the Security
has not become enforceable, shall not constitute Proceeds of
Realization.
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"PROCEEDS OF SALE" means all cash and non-cash proceeds derived from any sale or
other disposition of Secured Assets other than Proceeds of Realization and other
than non-cash proceeds derived from the sale of all or any part of the Nanisivik
Mine comprising an assumption of statutory reclamation liabilities by the
purchaser and such other proceeds comprising an assumption of liabilities as the
Lenders may approve from time to time on request by the relevant Obligor.
"PROVISIONAL PAYMENT" means the payment payable to an Obligor by a purchaser of
Concentrate from the Obligor upon delivery of such Concentrate to such purchaser
in accordance with Concentrate purchase agreements between such purchaser and
the Obligor. For purposes of this Agreement (and in particular the definitions
of "Lead Concentrate Accounts Receivable", "Zinc Concentrate Accounts
Receivable" and "Copper Concentrate Accounts Receivable"), the "Provisional
Payment" shall exclude the amount of treatment charges payable by the Obligor to
a purchaser of Concentrate from the Obligor.
"PURCHASE MONEY SECURITY INTEREST" means:
(a) a Lien taken or reserved in equipment to secure payment of all
or part of its purchase price; and
(b) a Lien taken in equipment by a person who gives value for the
purpose of enabling the relevant Obligor to acquire rights in
such property, to the extent that the value is applied to
acquire those rights;
but does not include a transaction of sale by and lease back to the seller.
"RECEIVER" means a receiver, receiver and manager or other Person having similar
powers or authority appointed by the Administrative Agent or by a court at the
instance of the Administrative Agent in respect of the Secured Assets or any
part thereof.
"RELATED PARTY LOAN" means the indebtedness of CZL to BRL pursuant to a loan
agreement dated as of August 9, 1990 between East West Caribou Mining Limited
(now CZL), National Australia Bank Limited A.C.N. 004044937, Westpac Banking
Corporation, Bathurst Base Metals Inc. and BRL relating to the Caribou Mine near
Bathurst, New Brunswick. The history of the ultimate assignment of the Related
Party Loan to BRL is set out in the recitals of the BRL Assignment of
Indebtedness and Security.
"RELATED PARTY MATERIAL AGREEMENTS" means the documentation evidencing the
Related Party Loan and the Related Party Security.
"RELATED PARTY SECURITY" means the security for the Related Party Loan which is
described in the recitals of the BRL Assignment of Indebtedness and Security.
"RELEASE" means any release, spill, emission, leak, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration into the environment
including, without limitation, the movement of Hazardous Materials through
ambient air, soil, surface water, ground water, wetlands, land or sub-surface
strata.
"REVOLVER MATURITY DATE" has the meaning ascribed thereto in Section 9.01.
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"REVOLVING CREDIT CAP" means an amount equal to the lesser of (i) the Revolving
Credit Reference Amount from time to time and (ii) the Borrowing Base from time
to time.
"REVOLVING CREDIT REFERENCE AMOUNT" means $25,000,000, as such amount may be
reduced from time to time pursuant to Section 2.04.
"REVOLVING FACILITY" means the revolving term credit facility established by the
Lenders in favour of the Borrowers pursuant to Section 2.01(a)(i).
"ROLLOVER NOTICE" has the meaning ascribed thereto in Section 5.02.
"SANTA XXXXXXX" means Santa Xxxxxxx Mining Company, Inc., a corporation
incorporated under the laws of Canada.
"SECURED ASSETS" means the property and assets of the Obligors in which the
Administrative Agent has been granted a Lien pursuant to the Security Documents.
"SECURED OBLIGATIONS" means the Credit Obligations, the Guarantee Obligations,
the Commodity Hedging Obligations and the Non-Commodity Hedging Obligations.
"SECURITY" means the collateral security constituted by the Security Documents.
"SECURITY DOCUMENTS" mean the BRL Security Documents, the CZL Security Documents
and the Material Subsidiary Security Documents.
"STANDARD" means Standard Bank London Ltd., its successors and assigns.
"SUBSIDIARY" and "SUBSIDIARIES" has the meaning ascribed thereto in the CBCA.
"SUBSIDIARY GUARANTEE" means the guarantee agreement dated as of August 14, 1998
by BRL in favour of the Lenders and pursuant to which BRL guaranteed the present
and future debts, liabilities and obligations of its subsidiaries to the
Lenders.
"SUPPLEMENTAL TERM FACILITY" means the non-revolving term credit facility
established by the Lenders in favour of the Borrowers pursuant to Section
2.01(a)(iii).
"TERM MATURITY DATE" means January 2, 2009.
"TSX" means The Toronto Stock Exchange and its successors and assigns.
"TUNISIACO" means Breakwater Tunisia S.A., a corporation incorporated under the
laws of Tunisia.
"TUNISIACO AMENDED SECURITY" means the amended or restated Contrat xx Xxxx and
Nantissement in form and substance satisfactory to the Administrative Agent and
the Lenders and pursuant to which the terms and conditions of this Agreement and
the parties to this Agreement shall be reflected or referred to in the Contrat
xx Xxxx and Nantissement and the amount secured by the Contrat xx Xxxx and
Nantissement shall be increased to $50,000,000.
"U.S. DOLLAR EQUIVALENT" means the Exchange Equivalent in United States dollars
of any amount in Canadian dollars.
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"ZINC CONCENTRATE" means the zinc concentrate produced at the Mines.
"ZINC CONCENTRATE ACCOUNTS RECEIVABLE" means, for any Obligor at any particular
time, Gross Accounts Receivables of such Obligor at such time which arise from
the sale of Zinc Concentrate and which shall be measured as the aggregate
payable pounds of zinc and the aggregate payable ounces of silver contained in
the Zinc Concentrate delivered to purchasers of Zinc Concentrate, multiplied by
the London Metal Exchange official settlement price for zinc in pounds at such
time and the London Metal Exchange silver fix at such time less (i) the
Provisional Payment paid to such Obligor by such purchasers for such Zinc
Concentrate, and (ii) treatment charges payable by such Obligor to such
purchasers for such Zinc Concentrate; provided that the market value of zinc in
calculating the amount of Zinc Concentrate Accounts Receivable shall not exceed
$1200 per tonne for Zinc Concentrate Accounts Receivable for which a Final
Reconciliation has not occurred. Upon a Final Reconciliation for a Zinc
Concentrate Account Receivable owing from a purchaser of Concentrate, the amount
thereof shall be the final amount, if any, payable by such purchaser to such
Obligor following delivery of such Concentrate to such purchaser in accordance
with the purchase agreement between such purchaser and such Obligor.
"ZINC CONCENTRATE INVENTORY" means, at any particular time, the aggregate
payable pounds of zinc and the aggregate payable ounces of silver contained in
the Zinc Concentrate classified as inventory of such Obligor at such time ready
for sale (but excluding such inventory which is not a Secured Asset, which is
subject to a Lien other than a Permitted Lien which ranks pari passu with or in
priority to the Lien thereon in favour of the Lenders pursuant to the Security
or which has been pre-sold by the Obligor to a purchaser of Zinc Concentrate;
provided, however, that such pre-sold Zinc Concentrate shall not be excluded
from Zinc Concentrate Inventory until such time and to the extent that the same
has been appropriated by the relevant Obligor to the applicable pre-sale
contract for the purpose of delivery to such purchaser) multiplied by the London
Metal Exchange official settlement price for zinc in pounds at such time and the
London Metal Exchange silver fix at such time less (i) the estimated
transportation charges payable by the Obligors to third parties in the normal
course of business for such Zinc Concentrate, and (ii) estimated treatment
charges payable by such Obligor to purchasers of such Zinc Concentrate based on
current agreements between such Obligor and such purchasers of Zinc Concentrate;
PROVIDED that the market value of zinc used to calculate the amount of Zinc
Concentrate Inventory shall not exceed $1200 per tonne.
1.02 PRO RATA AND PARI PASSU DISTRIBUTIONS.
When used in reference to an amount to be applied to the credit outstanding
under the Non-Revolving Facility and the Supplemental Term Facility, the phrase
"on a pro rata and PARI PASSU basis" means that such amount shall be applied to
both Credit Facilities without preference or distinction and to each such Credit
Facility in accordance with its pro rata proportion of both Credit Facilities,
which for each such Credit Facility shall be deemed to equal the percentage
equivalent of a fraction the numerator of which is the principal amount
outstanding under such Credit Facility and the denominator of which is the sum
of the principal amounts outstanding under both Credit Facilities, each such
principal amount as at the date of determination.
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1.03 OTHER USAGES.
References to "this Agreement", "the Agreement", "hereof", "herein", "hereto"
and like references refer to this Third Further Amended and Restated Credit
Agreement and not to any particular Article, Section or other subdivision of
this Agreement. Any references herein to any agreements or documents shall mean
such agreements or documents as amended, supplemented, restated or otherwise
modified from time to time in accordance with the terms hereof and thereof.
1.04 PLURAL AND SINGULAR.
Where the context so requires, words importing the singular number shall include
the plural and vice versa.
1.05 HEADINGS.
The division of this Agreement into Articles and Sections and the insertion of
headings in this Agreement are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
1.06 CURRENCY.
Unless otherwise specified herein, all statements of or references to dollar
amounts in this Agreement shall mean lawful money of the United States of
America.
1.07 APPLICABLE LAW.
This Agreement shall be governed by and construed in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable therein. Any
legal action or proceeding with respect to this Agreement may be brought in the
courts of the Province of Ontario and, by execution and delivery of this
Agreement, the parties hereby accept for themselves and in respect of their
property, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts. Nothing herein shall limit the right of any party to serve
process in any manner permitted by law or to commence legal proceedings or
otherwise proceed against any other party in any other jurisdiction.
1.08 TIME OF THE ESSENCE.
Time shall in all respects be of the essence of this Agreement.
1.09 NON-BANKING DAYS.
Subject to Section 7.04(b), any payment to be made hereunder shall be stated to
be due or any action to be taken hereunder shall be stated to be required to be
taken on a day other than a Banking Day, such payment shall be made or such
action shall be taken on the next succeeding Banking Day and, in the case of the
payment of any amount, the extension of time shall be included for the purposes
of computation of interest, if any, thereon.
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1.10 CONSENTS, APPROVALS AND DOCUMENTATION.
Whenever the consent or approval of a party hereto is required in a particular
circumstance, unless otherwise expressly provided for herein, such consent or
approval shall not be unreasonably withheld or delayed by such party.
1.11 AMOUNT OF CREDIT.
Any reference herein to the "amount of credit outstanding" with respect to the
Credit Facilities or any specified Credit Facility shall mean, at any particular
time:
(a) in the case of a Prime Rate Loan, the U.S. Dollar Equivalent of
the principal amount thereof at such time;
(b) in the case of an ABRCAN Loan or a LIBOR Loan, the principal
amount thereof at such time;
(c) in the case of a Letter denominated in Canadian dollars, the
U.S. Dollar Equivalent of the contingent liability of the
Issuing Lender thereunder at such time; and
(d) in the case of a Letter denominated in United States dollars,
the contingent liability of the Issuing Lender thereunder at
such time.
1.12 SCHEDULES.
Each and every one of the schedules which is referred to in this Agreement and
attached to this Agreement shall form a part of this Agreement.
1.13 STATUTE REFERENCES.
Any reference in this Agreement to any statute or any section thereof shall,
unless otherwise expressly stated, be deemed to be a reference to such statute
or section as amended, restated or re-enacted from time to time.
1.14 PARAMOUNTCY.
In the event of any conflict or inconsistency between a particular provision of
any other Loan Document and a particular provision of this Agreement and to the
extent said provision of such other Loan Document purports to impose obligations
on the Borrowers that are more onerous than the said provision of this
Agreement, then the said provision of this Agreement shall prevail and be
paramount.
1.15 EXTENSION OF CREDIT.
For the purposes hereof, each drawdown, rollover and conversion shall be deemed
to be an extension of credit to the relevant Borrower hereunder.
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1.16 JOINT AND SEVERAL OBLIGATIONS.
All of the obligations of the Borrowers hereunder, whether stated to be the
obligations of both or either of them, shall, to the extent permitted by
applicable law, be the joint and several obligations of the Borrowers. The
obligation of any Borrower (hereinafter, the "first mentioned Borrower") with
respect to its joint and several liability for the credit extended to the other
Borrower shall not be wholly or partially satisfied by such first mentioned
Borrower repaying the credit extended to such first mentioned Borrower
hereunder. With respect to the joint and several obligations of the Borrowers,
the Lenders shall not be bound to exhaust their recourse against any of the
Borrowers or others or any security or guarantees they may at any time hold
before being entitled to payment from the Borrowers and each of the Borrowers
renounces all benefits of discussion and division.
1.17 AMENDMENT AND RESTATEMENT.
This Agreement amends and restates the Existing Credit Agreement on the terms
and conditions set out herein, effective the Amendment Effective Date.
ARTICLE 2
CREDIT FACILITIES
2.01 ESTABLISHMENT OF CREDIT FACILITIES.
(a) Subject to the terms and conditions hereof, the Lenders hereby
confirm that the following Credit Facilities have been
established in favour of the Borrowers:
(i) a revolving term credit facility (the "Revolving
Facility") in a maximum amount equal to the Revolving
Credit Cap as reduced from time to time pursuant to
Section 2.04;
(ii) a non-revolving term credit facility (the "Non-Revolving
Facility") in the amount of $8,815,500; and
(iii) a supplemental non-revolving facility (the "Supplemental
Term Facility") in the amount of $3,250,000;
provided that the amounts referred to in paragraphs (ii) and
(iii) above shall take effect upon the payments referred to in
Section 11.01(b).
(c) The parties acknowledge that the Non-Revolving Facility and the
Supplemental Term Facility have both been fully advanced and no
further advances may be made under such Credit Facilities.
(d) The parties further acknowledge and agree that any Loans
outstanding on the Amendment Effective Date shall be continued
under and governed by this Agreement as of the Amendment
Effective Date notwithstanding that such Loans may have been
advanced under the Existing Credit Agreement.
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2.02 CREDIT RESTRICTIONS.
Notwithstanding any other provision hereof, the Borrowers shall be entitled to
obtain credit by way of LIBOR Loans in only such amounts so as to ensure that
the Lenders are not required to make LIBOR Loans for an aggregate principal
amount of less than $100,000, and in integral multiples of $100,000 for amounts
in excess of $100,000. The Borrowers shall not be permitted to have outstanding
at any time more than 5 LIBOR Loans under the Revolving Facility.
2.03 LENDERS' COMMITMENTS.
Subject to the terms and conditions hereof, the Lenders severally agree to
extend credit to the Borrowers hereunder from time to time, provided that the
aggregate amount of credit extended by each Lender under each Credit Facility
shall not at any time exceed the Individual Commitment of such Lender with
respect to such Credit Facility and further provided that the aggregate amount
of credit outstanding under any of the Credit Facilities shall not at any time
exceed the amount of such Credit Facility referred to in Section 2.01 as the
same may be reduced pursuant to Section 2.04. All credit requested under a
particular Credit Facility shall be made available to the relevant Borrower
contemporaneously by all of the Lenders who have committed to extend credit
under such Credit Facility. Each Lender shall provide to the relevant Borrower
its Pro Rata Share of each credit in accordance with the terms hereof; whether
such credit is extended by way of drawdown or rollover. No Lender shall be
responsible for any default by any other Lender in its obligation to provide its
Pro Rata Share of any credit nor shall the Individual Commitment of any Lender
with respect to any Credit Facility be increased as a result of any such default
of another Lender in extending credit under such Credit Facility. The failure of
any Lender to make available to a Borrower its Pro Rata Share of any credit
under any Credit Facility shall not relieve any other Lender of its obligation
hereunder to make available to such Borrower its Pro Rata Share of such credit
under such Credit Facility.
2.04 REDUCTIONS OF REVOLVING CREDIT REFERENCE AMOUNT.
The Borrowers may, from time to time and at any time, by five Banking Days'
notice in writing to the Administrative Agent, permanently reduce the amount of
the Revolving Credit Reference Amount in whole or in part to the extent it is
not utilized; provided, however, that any such permanent reduction of the amount
of the Revolving Credit Reference Amount shall be by an amount of no less than
$100,000 and otherwise in multiples of $100,000. On the Revolver Maturity Date,
the amount of the Revolving Credit Reference Amount shall be deemed to have been
permanently reduced to zero. Any repayment (other than pursuant to Section 9.01
or voluntary prepayment of outstanding credit under the Revolving Facility or
any repayment of outstanding credit under the Revolving Facility which forms
part of any rollover of LIBOR Loans under Article 5) shall not cause any
reduction in the amount of the Revolving Credit Reference Amount. Upon each
permanent reduction in the amount of the Revolving Credit Reference Amount, the
Individual Commitment of each Lender with respect to the Revolving Facility
shall thereupon be reduced by an amount equal to such Lender's Pro Rata Share of
the amount by which the Revolving Credit Reference Amount is permanently
reduced.
2.05 TERMINATION OF CREDIT FACILITIES.
(a) The Revolving Facility shall terminate upon the earliest to
occur of:
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(i) the Revolver Maturity Date;
(ii) the termination of such Credit Facility in accordance
with Section 13.03; and
(iii) the date on which the Revolving Credit Reference Amount
has been permanently reduced to zero pursuant to Section
2.04.
(b) The Non-Revolving Facility shall terminate upon the earliest to
occur of:
(i) the Term Maturity Date; and
(ii) the termination of such Credit Facility pursuant to
Section 13.03.
(c) The Supplemental Term Facility shall terminate upon the earliest
to occur of:
(i) the Term Maturity Date; and
(ii) the termination of such Credit Facility pursuant to
Section 13.03.
(d) Upon the termination of a Credit Facility, the right of the
Borrowers to obtain any credit under such Credit Facility and
all of the obligations of the Lenders to extend credit under
such Credit Facility shall automatically terminate.
ARTICLE 3
GENERAL PROVISIONS RELATING TO CREDITS
3.01 TYPES OF CREDIT AVAILMENTS.
Subject to the terms and conditions hereof, including without limitation
those under Section 2.02, the Borrowers may obtain credit under the
Non-Revolving Facility and the Supplemental Term Facility by way of one or more
LIBOR Loans and may obtain credit under the Revolving Facility by way of one or
more LIBOR Loans, Overdraft Loans and Letters.
3.02 FUNDING OF LOANS.
(a) Each Lender shall make available to the Administrative Agent its
Pro Rata Share of the principal amount of each Loan under each Credit Facility
for which it has an Individual Commitment prior to 11:00 a.m. (Toronto time) on
the date of the extension of credit. The Administrative Agent shall, upon
fulfilment by the Borrowers of the terms and conditions set forth in Article 12,
make such funds available to the relevant Borrower on the date of the extension
of credit by crediting the relevant Designated Account in immediately available
funds unless otherwise irrevocably authorized and directed in the Drawdown
Notice.
(b) Unless the Administrative Agent has been notified by a Lender
prior to 11:00 a.m. (Toronto time) on the date of the extension of credit that
such Lender will not make available to the Administrative Agent its Pro Rata
Share of such Loan, the Administrative Agent may assume that such Lender has
made such portion of the Loan available to the Administrative Agent on the date
of the extension of credit in accordance with the provisions hereof and the
Administrative Agent may, in reliance upon such assumption, make available to
the relevant Borrower on such date a
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corresponding amount. If the Administrative Agent has made such assumption, to
the extent such Lender shall not have so made its Pro Rata Share of the Loan
available to the Administrative Agent, such Lender agrees to pay to the
Administrative Agent, forthwith on demand, such Lender's Pro Rata Share of the
Loan and all reasonable costs and expenses incurred by the Administrative Agent
in connection therewith together with interest thereon at the then prevailing
interbank rate for each day from the date such amount is made available to such
Borrower until the date such amount is paid or repaid to the Administrative
Agent; provided, however, that notwithstanding such obligation, if such Lender
fails so to pay, such Borrower shall, without prejudice to any rights that such
Borrower might have against such Lender, repay such amount to the Administrative
Agent forthwith after demand therefor by the Administrative Agent.
(c) The amount payable by such Lender to the Administrative Agent
pursuant hereto shall be set forth in a certificate delivered by the
Administrative Agent to such Lender and such Borrower (which certificate shall
contain reasonable details of how the amount payable is calculated) and shall
constitute PRIMA FACIE evidence of such amount payable. If such Lender makes the
payment to the Administrative Agent required herein, the amount so paid shall
constitute such Lender's Pro Rata Share of such Loan for purposes of this
Agreement and shall entitle such Lender to all rights and remedies against the
Borrowers in respect of such Loan.
3.03 FAILURE OF LENDER TO FUND LOAN.
(a) If any Lender fails to make available to the Administrative
Agent its Pro Rata Share of any Loan as required under Section 3.02 (such Lender
being herein called the "Defaulting Lender") and the Administrative Agent has
not funded pursuant to Section 3.02, the Administrative Agent shall forthwith
give notice of such failure by the Defaulting Lender to the relevant Borrower
and the other Lenders and such notice shall state that any Lender may make
available to the Administrative Agent all or any portion of the Defaulting
Lender's Pro Rata Share of such Loan (but in no way shall any other Lender or
the Administrative Agent be obliged to do so) in the place and stead of the
Defaulting Lender. If more than one Lender gives notice that it is prepared to
make funds available in the place and stead of a Defaulting Lender in such
circumstances and the aggregate of the funds which such Lenders (herein
collectively called the "Contributing Lenders" and individually called the
"Contributing Lender") are prepared to make available exceeds the amount of the
advance which the Defaulting Lender failed to make, then each Contributing
Lender shall be deemed to have given notice that it is prepared to make
available its Pro Rata Share of such advance based on the Contributing Lenders'
relative commitments to advance in such circumstances.
(b) If any Contributing Lender makes funds available in the place
and stead of a Defaulting Lender in such circumstances, then the Defaulting
Lender shall pay to any Contributing Lender making the funds available in its
place and stead, forthwith on demand, any amount advanced on its behalf together
with interest thereon at the then prevailing interbank rate for each day from
the date of advance to the date of payment, against payment by the Contributing
Lender making the funds available of all interest received in respect of the
Loan from the relevant Borrower.
(c) In addition to interest as aforesaid, such Borrower shall pay
all amounts owing by such Borrower to the Defaulting Lender hereunder (with
respect to the amounts advanced by the Contributing Lenders on behalf of the
Defaulting Lender) to the Contributing Lenders in accordance with Section 3.07
until such time as the Defaulting Lender pays to the Administrative Agent for
the
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Contributing Lenders all amounts advanced by the Contributing Lenders on
behalf of the Defaulting Lender.
3.04 INABILITY TO FUND U.S. DOLLAR ADVANCES IN CANADA.
If a Lender determines in good faith, which determination shall be final,
conclusive and binding on the Borrowers, and the Administrative Agent notifies
the Borrowers that (i) by reason of circumstances affecting financial markets
inside or outside Canada, deposits of United States dollars are unavailable to
such Lender in Canada in sufficient amounts at the rate determined hereunder,
(ii) adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided in the definition of LIBOR or ABRCAN, as the
case may be, (iii) the making or continuation of United States dollar advances
in Canada has been made impracticable by the occurrence of a contingency (other
than a mere increase in rates payable by such Lender to fund the advance) which
materially and adversely affects the funding of the advances at any interest
rate computed on the basis of LIBOR or ABRCAN, as the case may be, or by reason
of a change since the date hereof in any applicable law or government
regulation, guideline or order (whether or not having the force of law but, if
not having the force of law, one with which a responsible Canadian chartered
bank would comply) or in the interpretation thereof by any Official Body
affecting such Lender or any relevant financial market, which results in the
LIBOR or ABRCAN, as the case may be, no longer representing the effective cost
to such Lender of deposits in such market for a relevant Interest Period, or
(iv) any change to present law or any future law, regulation, order, treaty or
official directive (whether or not having the force of law but, if not having
the force of law, one with which a responsible Canadian chartered bank would
comply) or any change therein or any interpretation or application thereof by
any Official Body has made it unlawful for such Lender to make or maintain or
give effect to its obligations in respect of United States dollar advances in
Canada as contemplated herein, then
(a) the right of the Borrowers to obtain any credit in United States
dollars by way of ABRCAN Loans or LIBOR Loans, as applicable,
shall be suspended until such Lender determines, acting
reasonably, that the circumstances causing such suspension no
longer exist and such Lender so notifies the Borrowers;
(b) if any credit in United States dollars by way of ABRCAN Loans or
LIBOR Loans, as applicable, is not yet outstanding, any
applicable Drawdown Notice shall be cancelled and the advance
requested therein shall not be made;
(c) if any LIBOR Loan is already outstanding at any time when the
right of the Borrowers to obtain credit by way of a LIBOR Loan
is suspended, it shall, subject to the Borrowers having the
right to obtain credit by way of an ABRCAN Loan at such time, be
converted to an ABRCAN Loan on the last day of the Interest
Period applicable thereto (or on such earlier date as may be
required to comply with any applicable law) or, if the Borrowers
do not have the right to obtain credit by way of an ABRCAN Loan
at such time, such LIBOR Loan shall be converted to a Prime Rate
Loan on the last day of the Interest Period applicable thereto
(or on such earlier date as may be required to comply with any
applicable law) in the principal amount equal to the Canadian
Dollar Equivalent of the principal amount of such LIBOR Loan;
and
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(d) if any ABRCAN Loan is already outstanding at any time when the
right of the Borrowers to obtain credit by way of an ABRCAN Loan
is suspended, it shall, subject to the Borrowers having the
right to obtain credit by way of a LIBOR Loan at such time, be
immediately converted to a LIBOR Loan in the principal amount
equal to the principal amount of the ABRCAN Loan and having an
Interest Period of one month or, if the Borrowers do not have
the right to obtain credit by way of a LIBOR Loan at such time,
it shall be immediately converted to a Prime Rate Loan in the
principal amount equal to the Canadian Dollar Equivalent of the
principal amount of the ABRCAN Loan.
In the event that any of the events listed above results in a limitation of the
amount of loans made by such Lender which can bear interest at the applicable
LIBOR or ABRCAN, as the case may be, or the amount of United States dollar
advances which such Lender can make in Canada, such Lender agrees to use good
faith to allocate, in reasonable fashion, the available amounts amongst its
borrowers as is reasonably practicable.
3.05 TIMING OF CREDIT AVAILMENTS.
(a) The term and maturity of any LIBOR Loans shall be subject to the
limitations on Interest Periods set out in Section 7.04.
(b) If at any time the term of a Letter issued under the Revolving
Facility would extend past the earliest date on which it is
certain that the Revolving Facility will terminate, the
Borrowers shall deposit in pledge with the Administrative Agent,
on terms satisfactory to the Administrative Agent, cash in
amount equal to the contingent liability of the Issuing Lender
under such Letter as security for the obligations of the
Borrowers under Section 9.05(a) with respect to such Letter.
3.06 TIME AND PLACE OF PAYMENTS.
Unless otherwise expressly provided herein, each Borrower shall make all
payments pursuant to this Agreement or pursuant to any document, instrument or
agreement delivered pursuant hereto by deposit to the relevant Designated
Account before 1:00 p.m. (Toronto time) on the day specified for payment and the
Administrative Agent shall be entitled to withdraw the amount of any payment due
to the Administrative Agent, the Lenders, the Issuing Lender or any of them from
such account on the day specified for payment. Any such payment received on the
day specified for such payment but after 1:00 p.m. (Toronto time) thereon shall
be deemed to have been received prior to 1:00 p.m. (Toronto time) on the Banking
Day immediately following such day specified for payment.
3.07 REMITTANCE OF PAYMENTS.
Forthwith after the withdrawal from the Designated Account by the Administrative
Agent of any payment of fees or other amounts for its own benefit pursuant to
Section 3.06, the Administrative Agent shall be entitled to retain such payment
for its own account. Forthwith after the withdrawal from the Designated Account
by the Administrative Agent of any payment of fees or other amounts for the
benefit of the Issuing Lender, the Administrative Agent shall remit such payment
to the Issuing Lender in immediately available funds. Forthwith after the
withdrawal from the Designated Account by the Administrative Agent of any
payment of principal, interest, fees or other amounts with respect to a Credit
Facility for the benefit of all of the Lenders under such Credit Facility
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pursuant to Section 3.06, the Administrative Agent shall, subject to Sections
3.03, 8.03 and 14.16, remit to each such Lender, in immediately available funds,
such Lender's Pro Rata Share of such payment; provided that if the
Administrative Agent, on the assumption that it will receive, on any particular
date, a payment of principal (including, without limitation, a prepayment),
interest, fees or other amount hereunder, remits to each such Lender its Pro
Rata Share of such payment and the Borrowers fail to make such payment, each of
such Lenders agrees to repay to the Administrative Agent, forthwith on demand,
to the extent that such amount is not recovered from the Borrowers on demand and
after reasonable efforts by the Administrative Agent to collect such amount
(without in any way obligating the Administrative Agent to take any legal action
with respect to such collection), such Lender's Pro Rata Share of the payment
made to it pursuant hereto together with interest thereon at the then prevailing
interbank rate for each day from the date such amount is remitted to the Lenders
until the date such amount is paid or repaid to the Administrative Agent, the
exact amount of the repayment required to be made by the Lenders pursuant hereto
to be as set forth in a certificate delivered by the Administrative Agent to
each such Lender, which certificate shall constitute PRIMA FACIE evidence of
such amount of repayment.
3.08 EVIDENCE OF INDEBTEDNESS.
The Administrative Agent shall open and maintain accounts wherein the
Administrative Agent shall record the amount of credit outstanding, each advance
and each payment of principal and interest on account of each Loan, each Letter
issued and drawn upon and all other amounts becoming due to and being paid to
the Administrative Agent, the Lenders or the Issuing Lender hereunder and under
any of the other Loan Documents. The Administrative Agent's accounts constitute,
in the absence of manifest error, prima facie evidence of the indebtedness of
the Borrowers to the Administrative Agent, the Lenders and the Issuing Lender
hereunder and under the other Loan Documents.
3.09 GENERAL PROVISIONS RELATING TO ALL LETTERS.
(a) The Borrowers shall indemnify and save harmless the Lenders, the
Issuing Lender and the Administrative Agent against all claims, losses, costs,
expenses or damages to the Lenders, the Issuing Lender and the Administrative
Agent arising out of or in connection with any Letter, the issuance thereof, any
payment thereunder or any action taken by the Lenders, the Issuing Lender or the
Administrative Agent or any other person in connection therewith, including,
without limitation, all costs relating to any legal process or proceeding
instituted by any party restraining or seeking to restrain the Issuing Lender
from accepting or paying any Draft or any amount under any such Letter.
(b) The Borrowers hereby acknowledge and confirm to the Issuing
Lender that the Issuing Lender shall not be obliged to make any inquiry or
investigation as to the right of any beneficiary to make any claim or Draft or
request any payment under a Letter and payment by the Issuing Lender pursuant to
a Letter shall not be withheld by the Issuing Lender by reason of any matters in
dispute between the beneficiary thereof and the relevant Borrower. The sole
obligation of the Issuing Lender with respect to Letters is to cause to be paid
a Draft drawn or purporting to be drawn in accordance with the terms of the
applicable Letter and for such purpose the Issuing Lender is only obliged to
determine that the Draft purports to comply with the terms and conditions of the
relevant Letter.
(c) The Issuing Lender shall not have any responsibility or
liability for or any duty to inquire into the form, sufficiency (other than to
the extent provided in the preceding paragraph),
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authorization, execution, signature, endorsement, correctness (other than to the
extent provided in the preceding paragraph), genuineness or legal effect of any
Draft, certificate or other document presented to it pursuant to a Letter and
the Borrowers unconditionally assume all risks with respect to the same. The
Borrowers agree that they assume all risks of the acts or omissions of the
beneficiary of any Letter with respect to the use by such beneficiary of the
relevant Letter.
(d) The obligations of the Borrowers hereunder with respect to
Letters shall be absolute, unconditional and irrevocable and shall not be
reduced by any event or occurrence including, without limitation, any lack of
validity or enforceability of any such Letter, or any Draft with respect thereto
paid or acted upon by the Issuing Lender or any of its correspondents being
fraudulent, forged, invalid or insufficient in any respect, or any claims which
the Borrowers may have against any beneficiary or transferee of any such Letter;
provided, however, that nothing herein shall adversely affect the rights of the
Borrowers to commence any proceeding against the Issuing Lender for any wrongful
payments made by the Issuing Lender under a Letter as a result of acts or
omissions constituting gross negligence or wilful misconduct on the part of the
Issuing Lender. The obligations of the Borrowers hereunder with respect to
Letters shall remain in full force and effect and shall apply to any amendment
to or extension of the expiration date of any such Letter.
(e) Any action, inaction or omission taken or suffered by the
Issuing Lender or any of the Issuing Lender's correspondents under or in
connection with a Letter or any Draft made thereunder, if in good faith and in
conformity with foreign or domestic laws, regulations or customs applicable
thereto, shall be binding upon the relevant Borrower and shall not place the
Issuing Lender or any of its correspondents under any resulting liability to
such Borrower. Without limiting the generality of the foregoing, the Issuing
Lender and its correspondents may receive, accept or pay as complying with the
terms of a Letter, any Draft thereunder, otherwise in order which may be signed
by, or issued to, the administrator or any executor of, or the trustee in
bankruptcy of, or the receiver for any property of, or other person or entity
acting as the representative or in the place of, such beneficiary or its
successors and assigns. The Borrowers covenant that they will not take any
steps, issue any instructions to the Issuing Lender or any of its correspondents
or institute any proceedings intended to derogate from the right or ability of
the Issuing Lender or its correspondents to honour and pay any Draft or Drafts.
(f) The Borrowers agree that the Lenders, the Issuing Lender and the
Administrative Agent shall have no liability to them for any reason in respect
of or in connection with any Letter, the issuance thereof, any payment
thereunder, or any other action taken by the Lenders, the Issuing Lender or the
Administrative Agent or any other person in connection therewith, other than on
account of the Issuing Lender's gross negligence or wilful misconduct.
(g) The Uniform Customs and Practice for Documentary Credits as most
recently published by the International Chamber of Commerce (the "UCP") shall in
all respects apply to each Letter and shall be deemed for such purpose to be a
part hereof as if fully incorporated herein. In the event of any conflict
between the UCP and the laws of the Province of Ontario, the UCP shall prevail
to the extent necessary to remove the conflict.
3.10 NOTICE PERIODS.
Each Drawdown Notice and Rollover Notice for Loans shall be given to the
Administrative Agent:
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(a) prior to 11:00 a.m. (Toronto time) on the fifth Banking Day
prior to the date of a drawdown of a Letter; and
(b) prior to 11:00 a.m. (Toronto time) on the third Banking Day
prior to the date of a drawdown of or rollover of a LIBOR Loan.
3.11 LOANS UNDER THE SUPPLEMENTAL TERM FACILITY.
The Borrowers shall be entitled to obtain credit by way of Loans under the
Supplemental Term Facility only in minimum amounts of $100,000 or integral
multiples thereof, subject to Section 2.02 in the case of LIBOR Loans.
3.12 OVERDRAFT LOANS.
(a) Subject to the following provisions of this Section, overdrafts
arising from clearance of cheques or drafts drawn on the accounts of the
Borrowers maintained with the Overdraft Lender, and designated by the Overdraft
Lender for such purpose, shall be deemed to be outstanding as an extension of
credit to the Borrowers from the Overdraft Lender under the Revolving Facility
(each, an "Overdraft Loan") as follows:
(i) in the case of overdrafts in Canadian dollars, as Prime
Rate Loans; and
(ii) in the case of overdrafts in United States dollars, as
ABRCAN Loans.
For certainty, notwithstanding Section 4.01, no Drawdown Notice need be
delivered by the Borrowers in respect of Overdraft Loans.
(b) Except as otherwise specifically provided herein, all references
to Prime Rate Loans and ABRCAN Loans shall include Overdraft Loans made in
Canadian and United States dollars, respectively.
(c) For certainty and without restricting the generality of
paragraph (b) above, it is agreed and understood that the aggregate of all
Overdraft Loans and credit otherwise outstanding under the Revolving Facility
shall at no time exceed the lesser of (i) the Revolving Credit Reference Amount
from time to time and (ii) the Borrowing Base from time to time; no Overdraft
Loan may be made if so doing would result in a Credit Excess; and any Credit
Excess arising from an Overdraft Loan shall be repaid in accordance with Section
9.07.
(d) Overdraft Loans shall be made by the Overdraft Lender alone,
without assignment to or participation by the other Lenders.
(e) The aggregate principal amount of the Overdraft Loans shall (i)
not exceed $2,000,000 or the Canadian Dollar Equivalent thereof, and (ii) be
reduced to a balance of less than $100,000 at the time of each extension of
credit under the Revolving Facility from proceeds of LIBOR Loans extended by the
Lenders to the Borrowers under the Revolving Facility at such time.
(f) The Borrowers may make repayments of Overdraft Loans (together
with accrued interest thereon) from time to time without penalty.
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(g) All interest payments and principal repayments of or in respect
of Overdraft Loans shall be solely for the account of the Overdraft Lender.
Subject to Section 3.12(h), all costs and expenses relating to the Overdraft
Loans shall be solely for the account of the Overdraft Lender, without prejudice
to the right of the Overdraft Lender to recover such costs and expenses from the
Borrowers pursuant to Section 11.02(h).
(h) Notwithstanding anything to the contrary herein contained, or
the contrary provisions of Applicable Law, (i) if an Event of Default occurs or
(ii) if the Overdraft Lender so requires, and there are then outstanding any
Overdraft Loans, then, effective on the day of notice to that effect to the
other Lenders from the Overdraft Lender, the Borrowers shall be deemed to have
requested, and hereby request, an extension of credit by way of drawdown of an
amount under the Revolving Facility, in the currency or currencies of the
Overdraft Loans, sufficient to repay the Overdraft Loans and accrued and unpaid
interest in respect thereof, and on the day of receipt of such notice, each of
the other Lenders shall disburse to the Overdraft Lender its respective Pro Rata
Share of such amounts and such amounts shall thereupon be deemed to have been
advanced by the Lenders to the Borrowers and to constitute Loans under the
Revolving Facility (by way of ABRCAN Loans if the Overdraft Loans were so
denominated or Prime Rate Loans if the Overdraft Loans were so denominated, or
both). Such Loans shall be deemed to be comprised of principal and accrued and
unpaid interest in the same proportions as the corresponding Overdraft Loans. If
a Lender does not disburse to the Overdraft Lender its respective Pro Rata Share
of any amount under this Section then, for the purpose only of any distributions
or payments to the Lenders (and not, for greater certainty, for purposes of any
obligations of the Lenders, including those under Section 14.10), including any
distribution or payment with respect to the Borrowers in the event of any
enforcement or realization proceedings or any bankruptcy, winding-up,
liquidation, arrangement, compromise or composition, the Individual Commitment
of such Lender with respect to the Revolving Facility shall be deemed to be nil
and the Individual Commitment of the Overdraft Lender with respect to the
Revolving Facility shall be increased by the Individual Commitment of such
Lender with respect to the Revolving Facility until the amounts owed by the
Borrowers are outstanding to each Lender in accordance with its Pro Rata Share
determined without regard to this sentence. If any amount disbursed by a Lender
to the Overdraft Lender under this Section and deemed to have been advanced to
the Borrowers must be repaid by the Overdraft Lender or by the relevant Lender
to the Borrowers then no reduction of the Overdraft Loans as contemplated above
shall be deemed to have occurred, but the Lenders shall purchase participations
in the Overdraft Loans (without recourse to the Overdraft Lender) for an amount
or otherwise effect transactions to achieve the financial results contemplated
by this Section.
(i) For certainty, it is hereby acknowledged and agreed that the
Lenders shall be obligated to advance their Pro Rata Share of an extension of
credit by way of drawdown contemplated by section 3.12(h) and to disburse to the
Overdraft Lender their Pro Rata Shares of the Loan referenced therein
irrespective of:
(i) whether a Default or Event of Default is then continuing
or whether any other condition in Article 12 is met; and
(ii) whether or not the Borrowers have in fact actually
requested such extension of credit by way of drawdown
(by delivery of a Drawdown Notice or otherwise).
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ARTICLE 4
DRAWDOWNS
4.01 DRAWDOWNS.
Subject to the terms and conditions hereof, including Section 4.02, and provided
that all of the applicable conditions precedent set forth in Article 12 have
been fulfilled by the Borrowers or waived by the Lenders either Borrower may
obtain credit under the Credit Facilities by giving to the Administrative Agent
an irrevocable notice ("Drawdown Notice") in accordance with Section 3.10, which
notice shall specify:
(a) the Credit Facility under which the credit is to be obtained;
(b) the date the credit is to be obtained;
(c) whether the credit is to be obtained by way of LIBOR Loan or
Letter;
(d) in the case of any credit to be obtained by way of a LIBOR Loan,
the principal amount of the LIBOR Loan;
(e) if the credit is to be obtained by way of LIBOR Loan, the
applicable Interest Period;
(f) if the credit is to be obtained by way of Letter, the date of
issuance of the Letter, the named beneficiary of the Letter, the
maturity date and amount of the Letter, the currency in which
the Letter is to be denominated and all other terms of the
Letter; and
(g) the details of any irrevocable authorization and direction
pursuant to Section 3.02.
4.02 NO CREDIT EXCESSES UNDER REVOLVING FACILITY
For greater certainty, the Borrowers shall not request any advance or deemed
advance under the Revolving Facility to the extent that such advance or deemed
advance would result in a Credit Excess.
ARTICLE 5
ROLLOVERS
5.01 LIBOR LOANS.
Subject to Section 3.04 and provided that the relevant Borrower has, by giving
notice to the Administrative Agent in accordance with Section 5.02, requested
the Lenders to continue to extend credit by way of LIBOR Loans to replace all or
a portion of an outstanding LIBOR Loan under a particular Credit Facility as it
matures, each Lender shall, on the maturity of such LIBOR Loan, continue to
extend credit to such Borrower under such Credit Facility by way of a LIBOR Loan
(without a further advance of funds to such Borrower) in the principal amount
equal to such Lender's Pro Rata Share of the principal amount of the matured
LIBOR Loan under such Credit Facility.
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5.02 ROLLOVER NOTICE.
The notice to be given to the Administrative Agent pursuant to Section 5.01
("Rollover Notice") shall be irrevocable, shall be given in accordance with
Section 3.10 and shall specify:
(a) the Credit Facility to which the maturing LIBOR Loan relates;
(b) the maturity date of the maturing LIBOR Loan;
(c) the principal amount of the maturing LIBOR Loan and the portion
thereof to be replaced; and
(d) the Interest Period or Interest Periods of the replacement LIBOR
Loans.
ARTICLE 6
CONVERSIONS of libor loans
6.01 CONVERSION AFTER DEFAULT.
If a Default has occurred and is continuing at 10:00 a.m. (Toronto time) on the
third Banking Day prior to the maturity date of a LIBOR Loan, such LIBOR Loan
shall automatically convert to an ABRCAN Loan as though notice to such effect
had been given.
6.02 CONVERSION UPON FAILURE TO GIVE ROLLOVER NOTICE.
If the relevant Borrower has failed to give a Rollover Notice to the
Administrative Agent in respect of a LIBOR Loan prior to its maturity pursuant
to Section 5.02, such LIBOR Loan shall automatically convert to an ABRCAN Loan
upon such maturity as if notice requesting such conversion had been given.
ARTICLE 7
INTEREST
7.01 INTEREST RATES.
The Borrowers shall pay to the Lenders, in accordance with Section 3.06,
interest on the outstanding principal amount from time to time of each Loan and
on the amount of overdue interest thereon from time to time at the rate per
annum equal to:
(a) in the case of Prime Rate Loans, the Prime Rate plus 1.25% per
annum;
(b) in the case of ABRCAN Loans ABRCAN plus 1.25% per annum;
(c) in the case of LIBOR Loans under the Revolving Facility, LIBOR
plus 2.25% per annum;
(d) in the case of LIBOR Loans under the Supplemental Term Facility,
LIBOR plus 2.375% per annum; and
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(e) in the case of LIBOR Loans under the Non-Revolving Facility,
LIBOR plus 2.75% per annum.
7.02 CALCULATION AND PAYMENT OF INTEREST.
(a) Interest on the outstanding principal amount from time to time
of each Prime Rate Loan and on the amount of overdue interest thereon from time
to time shall accrue from day to day from and including the date on which credit
is obtained by way of such Prime Rate Loan or the date on which such payment of
overdue interest was due, as the case may be, to but excluding the date on which
such Prime Rate Loan or overdue interest, as the case may be, is repaid in full
(both before and after maturity and as well after as before judgment) and shall
be calculated on the basis of the actual number of days elapsed divided by 365
or 366 in the case of a leap year.
(b) Interest on the outstanding principal amount from time to time
of each LIBOR Loan and ABRCAN Loan and on the amount of overdue interest thereon
from time to time shall accrue from day to day from and including the date on
which credit is obtained by way of such Loan or the date on which such payment
of overdue interest was due, as the case may be, to but excluding the date on
which such Loan or overdue interest, as the case may be, is repaid in full (both
before and after maturity and as well after as before judgment) and shall be
calculated on the basis of the actual number of days elapsed divided by 360.
(c) Accrued interest shall be paid,
(i) in the case of interest on Prime Rate Loans and ABRCAN
Loans, monthly in arrears on the last Banking Day of
each calendar month; and
(ii) in the case of interest on LIBOR Loans, on the last day
of the applicable Interest Period; provided that, in the
case of Interest Periods of a duration longer than three
months, accrued interest shall be paid no less
frequently than every three months from the first day of
such Interest Period during the term of such Interest
Period and on the date on which such Loans are otherwise
required to be repaid.
7.03 GENERAL INTEREST RULES.
(a) For the purposes hereof, whenever interest is calculated on the
basis of a year of 360 or 365 days, each rate of interest determined pursuant to
such calculation expressed as an annual rate for the purposes of the INTEREST
ACT (Canada) is equivalent to such rate as so determined multiplied by the
actual number of days in the calendar year in which the same is to be
ascertained and divided by 360 or 365, respectively.
(b) Interest on each Loan and on the overdue interest thereon shall
be payable in the currency in which such Loan is denominated during the relevant
period.
(c) If the Borrowers fail to pay any fee or other amount of any
nature payable by them to the Administrative Agent or the Lenders hereunder
(other than principal or interest) on the due date therefor or under any
document, instrument or agreement delivered pursuant hereto on the due date
therefor, the Borrowers shall pay to the Administrative Agent or the Lenders, as
the case maybe, interest on such overdue amount in the same currency as such
overdue amount is payable from and
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including such due date to but excluding the date of actual payment (as well
after as before judgment) at the rate per annum, calculated and compounded
monthly, which is equal to:
(i) the ABRCAN plus 3% per annum in the case of overdue
amounts denominated in U.S. dollars; and
(ii) the Prime Rate plus 3% per annum in the case of all
other overdue amounts.
Such interest on overdue amounts shall become due and be paid on demand by the
Administrative Agent.
(d) The principle of deemed reinvestment of interest shall not apply
to any interest calculation under this Agreement; all interest payments to be
made hereunder shall be paid without allowance or deduction for deemed
reinvestment or otherwise, before and after maturity, default and judgment. The
rates of interest specified in this Agreement are intended to be nominal rates
and not effective rates. Interest calculated hereunder shall be calculated using
the nominal rate method and not the effective rate method of calculation.
7.04 SELECTION OF INTEREST PERIODS.
With respect to each LIBOR Loan, the relevant Borrower shall specify in the
Drawdown Notice or Rollover Notice, the duration of the Interest Period provided
that:
(a) no LIBOR Loan under any Credit Facility may have an Interest
Period that would end after the Revolver Maturity Date or the
Term Maturity Date, as applicable ;
(b) subject to paragraph (a) above, Interest Periods shall have a
duration of 7 days, 1 month, 2 months, 3 months or 6 months, but
Interest Periods with a duration of less than one month and more
than 7 days may be permitted on request by notice in writing by
the Borrowers to the Administrative Agent with the consent of
the Majority Lenders;
(c) the first Interest Period for a LIBOR Loan shall commence on and
include the day on which credit is obtained by way of such Loan
and each subsequent Interest Period applicable thereto shall
commence on and include the date of the expiry of the
immediately preceding Interest Period applicable thereto; and
(d) if any Interest Period would end on a day which is not a Banking
Day, such Interest Period shall be extended to the next
succeeding Banking Day unless such next succeeding Banking Day
falls in the next calendar month, in which case such Interest
Period shall be shortened to end on the immediately preceding
Banking Day.
7.05 STANDBY FEES.
With effect from and after January 1, 2003, upon the first Banking Day
immediately following the completion of each Fiscal Quarter and upon the
termination of the Revolving Facility, the Borrowers shall pay to the Lenders,
in arrears, a standby fee ("Standby Fee"), calculated and accruing daily from
the date of the execution and delivery of this Agreement, at a rate of 0.50% per
annum (the "Standby Rate"), calculated on the basis of a year of 365 days. The
Standby Fee payable in respect
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of any Fiscal Quarter or any shorter period ending on the date the Revolving
Facility is terminated (the "Stub Period") shall be an amount equal to: (i) the
sum of the amounts, if any, by which (x) the Revolving Credit Reference Amount
as at the end of each day during such Fiscal Quarter or Stub Period exceeds (y)
the amount of credit outstanding under the Revolving Facility as at the end of
such day during such Fiscal Quarter or Stub Period, multiplied by (ii) the
Standby Rate divided by 365.
7.06 LETTER FEES.
(a) The Borrowers shall pay to the Administrative Agent for the
account of all Lenders an issuance fee (in the currency which the Letter is
denominated) in advance on the date each Letter is issued calculated at a rate
of 2.25% per annum on the amount of each such Letter for the term of such
Letter; provided that the minimum issuance fee for each Letter shall be Cdn.
$250 for Letters denominated in Canadian Dollars and $250 for Letters
denominated in United States Dollars. In addition, with respect to all Letters,
the Borrowers shall from time to time pay to the Administrative Agent for the
account of the Issuing Lender its usual and customary fees (at the then
prevailing rates) for the amendment, delivery and administration of letters of
credit and letters of guarantee such as the Letters.
(b) The Borrowers shall pay to the Administrative Agent for the
account of the Issuing Lender a fee (in the currency in which the Letter is
denominated) in advance on the date each Letter is issued calculated at a rate
of 0.125% per annum on the amount of each such Letter for the term of such
Letter.
7.07 ADDITIONAL FEES.
In addition to the fees set out in Sections 7.05 and 7.06, the Borrowers shall
pay to the Administrative Agent for the account of the Lenders additional fees
in consideration of the amendments effected by the Existing Credit Agreement and
by this Agreement (which fees shall be regarded for all purposes as having been
earned and accrued as of the date of this Agreement even though not yet due and
payable), to be satisfied as follows:
(a) On the Escrow Release Date, the Borrowers shall pay to the
Administrative Agent for the account of the Lenders to the
extent of their respective Pro Rata Shares:
(i) the cash arrangement fee of $600,000 that was payable
under the Existing Credit Agreement on December 31,
2003; and
(ii) an additional cash fee of $200,000 in consideration of
the Lenders' agreement to extend the term of the
Revolving Facility until January 2, 2005.
(b) In consideration of the Lenders' agreement to extend the term of
the Non-Revolving Facility and the Supplemental Term Facility
until the Term Maturity Date, on the Escrow Release Date the
Borrowers shall deposit an additional fee of $275,000 (the "TERM
FEE") into an escrow account to be held with counsel to the
Lenders pursuant to an escrow agreement in form and substance
satisfactory to such counsel, the Lenders and the Borrowers. In
the event that the Borrowers shall have paid or prepaid to the
Administrative Agent in full all principal, interest, fees and
any other credit outstanding under the Non-Revolving Facility
and the Supplemental Term
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Facility on or before March 31, 2004, the Term Fee shall be
released from escrow and returned to the Borrowers upon such
payment in full (together with any interest earned thereon). In
the event that the Borrowers shall not have paid or repaid all
such amounts in full on or before March 31, 2004, then the Term
Fee shall be released from escrow and paid to the Administrative
Agent (together with any interest earned thereon) on April 1,
2004, and $200,000 of the Term Fee (together with a
proportionate amount of such interest) shall be distributed to
the Lenders to the extent of their respective Pro Rata Shares
and the balance of $75,000 thereof (together with a
proportionate amount of such interest) shall be paid to Dundee
for its own account.
7.08 WAIVER.
To the extent permitted by Applicable Law, the covenant of the Borrowers to pay
interest at the rates provided herein shall not merge in any judgment relating
to any obligation of the Borrowers to the Lenders or the Administrative Agent
and any provision of the Interest Act (Canada) which restricts any rate of
interest set forth herein shall be inapplicable to this Agreement and is hereby
waived by the Borrowers.
7.09 MAXIMUM RATE PERMITTED BY LAW.
No interest or fee to be paid hereunder shall be paid at a rate exceeding the
maximum rate permitted by Applicable Law. In the event that such interest or fee
exceeds such maximum rate, such interest or fees shall be reduced or refunded,
as the case may be, so as to be payable at the highest rate recoverable under
Applicable Law.
ARTICLE 8
RESERVE, CAPITAL, INDEMNITY AND TAX PROVISIONS
8.01 CONDITIONS OF CREDIT.
The obtaining or maintaining of credit hereunder shall be subject to the terms
and conditions contained in this Article 8.
8.02 CHANGE OF CIRCUMSTANCES.
(a) If, after the date hereof, the introduction of or any change in
or in the interpretation of, or any change in its application to any Lender (the
"Affected Party") of, any law or any regulation or guideline issued by any
central bank or other governmental authority (whether or not having the force of
law but, if not having the force of law, one with which a responsible Canadian
chartered bank would comply), including, without limitation, any reserve or
special deposit requirement or any tax (other than tax on an Affected Party's
income) or any capital requirement, has, due to an Affected Party's compliance,
the effect, directly or indirectly, of (i) increasing the cost to such Affected
Party of performing its obligations hereunder; (ii) reducing any amount received
or receivable by such Affected Party hereunder or its effective return hereunder
or on its capital; or (iii) causing such Affected Party to make any payment or
to forego any return based on any amount received or receivable hereunder by
such Affected Party, then, upon demand (which demand shall be accompanied by a
certificate setting out the reason for and the calculation of the relevant
amount)
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from time to time the Borrowers shall pay such amount as shall compensate such
Affected Party for any such cost, reduction, payment or foregone return (the
"Additional Compensation"); provided that the Borrowers shall be obligated under
this Section 8.02(a) to compensate such Affected Party for any increase in such
Affected Party's capital adequacy requirements measured against its outstanding
obligations hereunder only to the extent such capital adequacy requirements are
in excess of the capital adequacy requirements as of the date hereof. Any
certificate of an Affected Party in respect of the foregoing will be conclusive
and binding upon the Borrowers, except for manifest error, provided that such
Affected Party shall determine the Additional Compensation owing to it in good
faith using any reasonable averaging and attribution methods.
(b) Each Affected Party agrees that, as promptly as practicable
after it becomes aware of the occurrence of an event or the existence of a
condition that would cause it to seek Additional Compensation from the Borrowers
pursuant to Section 8.02(a), it will promptly notify the Borrowers of such
condition and will use reasonable efforts to make, fund or maintain the affected
credit through another lending office or take such other actions as it deems
appropriate if as a result thereof the Additional Compensation which would
otherwise be required to be paid in respect of such credit pursuant to Section
8.02(a), would be reduced and if; as determined by such Affected Party in its
sole discretion, the making, funding or maintaining of such credit through such
other lending office or the taking of such other actions would not otherwise
adversely affect such credit or such Affected Party and would not, in such
Affected Party's sole discretion, be commercially unreasonable. Each Affected
Party further agrees that if such Affected Party subsequently recovers all or
part of the Additional Compensation paid by the Borrowers from another source,
it shall repay an equal amount to the Borrowers. The Borrowers shall be entitled
to prepay any Prime Rate Loan or ABRCAN Loan advanced hereunder which is the
subject of a demand for Additional Compensation under this Section 8.02 without
notice, bonus or penalty. Additional Compensation shall only be payable by the
Borrowers pursuant to this Section 8.02 if similar compensation is being claimed
as a general practice from customers of such Affected Party who by agreement are
liable to pay similar compensation.
8.03 FAILURE OF LENDERS TO FUND AS A RESULT OF CHANGE OF CIRCUMSTANCES.
(a) If any Lender but not all of the Lenders seeks Additional
Compensation pursuant to Section 8.02(a) or if a Lender determines pursuant to
Section 3.04 that it cannot make United States dollar advances in Canada (in
each case, the "Affected Lender"), then the Borrowers may indicate to the
Administrative Agent in writing that they desires to replace the Affected Lender
with one or more of the other Lenders, and the Administrative Agent shall then
forthwith give notice to the other Lenders that any Lender or Lenders may, in
the aggregate, assume all (but not part) of the Affected Lender's Individual
Commitment and obligations hereunder and, in the aggregate, acquire all (but not
part) of the rights of the Affected Lender hereunder and assume all (but not
part) of the obligations of the Affected Lender under each of the other Loan
Documents (but in no event shall any other Lender or the Administrative Agent be
obliged to do so).
(b) If one or more Lenders shall so agree in writing (herein
collectively called the "Assenting Lenders" and individually called an
"Assenting Lender") with respect to such acquisition and assumption, the
Individual Commitments and the obligations of such Assenting Lender under this
Agreement and the rights and obligations of such Assenting Lender under each of
the other Loan Documents shall be increased by its respective pro rata share
(based on the relative Individual Commitments of the Assenting Lenders) of the
Affected Lender's Pro Rata Share of such credit and
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Individual Commitment and obligations under this Agreement and rights and
obligations under each of the other Loan Documents on a date mutually acceptable
to the Assenting Lenders and the Borrowers. On such date, the Assenting Lenders
shall pay to the Affected Lender the advances of the Affected Lender then
outstanding, together with all interest accrued thereon and all other amounts
owing to the Affected Lender hereunder, and, upon such payment by the Assenting
Lenders, the Affected Lender shall cease to be a "Lender" for purposes of this
Agreement and shall no longer have any obligations hereunder. Upon the
assumption of the Affected Lender's Individual Commitment or portion thereof as
aforesaid by an Assenting Lender, Schedule A hereto shall be deemed to be
amended to increase the Individual Commitment of such Assenting Lender by the
respective amounts of such assumption. If there are insufficient Assenting
Lenders, the Borrowers may designate to the Administrative Agent by written
notice one or more financial institutions which is not a Lender and, for all
purposes of this Section 8.03, each such financial institution shall be an
Assenting Lender.
8.04 INDEMNITY RELATING TO CREDITS.
Upon notice from the Administrative Agent to the Borrowers (which notice shall
be accompanied by a detailed calculation of the amount to be paid by the
Borrowers), the Borrowers shall pay to the Administrative Agent or the Lenders
such amount or amounts as will compensate the Administrative Agent or the
Lenders for any loss, cost or expense incurred by them:
(a) in the liquidation or redeposit of any funds acquired by the
Lenders to fund or maintain any portion of a LIBOR Loan as a
result of:
(i) the failure of a Borrower to borrow or make repayments
on the dates specified under this Agreement or in any
notice from a Borrower to the Administrative Agent
(provided that if any notice specifies the repayment of
a LIBOR Loan at any time other than its maturity date,
then the relevant Borrower shall be responsible for any
loss, costs or expenses referred to above); or
(ii) the repayment or prepayment of any amounts on a day
other than the payment dates prescribed herein or in any
notice from a Borrower to the Administrative Agent
(provided that if any notice specifies the repayment of
a LIBOR Loan at any time other than its maturity date,
then such Borrower shall be responsible for any loss,
costs or expenses referred to above); or
(b) in converting United States dollars into Canadian dollars or
Canadian dollars into United States dollars as a result of the
failure of a Borrower to make repayments of outstanding credit
hereunder in the currency in which such outstanding credit was
denominated.
8.05 INDEMNITY FOR TRANSACTIONAL AND ENVIRONMENTAL LIABILITY.
(a) The Borrowers hereby agree to indemnify, exonerate and hold the
Administrative Agent and each Lender and each of their respective shareholders,
officers, directors, employees and agents (collectively, the "Indemnified
Parties") free and harmless from and against any and all claims, demands,
actions, causes of action, suits, losses, costs (including, without limitation,
all documentary, recording, filing, mortgage or other stamp taxes or duties),
charges, liabilities and
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damages, and expenses in connection therewith (irrespective of whether such
Indemnified Party is a party to the action for which indemnification hereunder
is sought), and including, without limitation, reasonable legal fees and
reasonable out of pocket disbursements and amounts paid in settlement of any and
every kind whatsoever (collectively, in this Section 8.05(a), the "Indemnified
Liabilities"), paid, incurred or suffered by, or asserted against, the
Indemnified Parties or any of them as a result of; or arising out of; or
relating to (i) the extension of credit contemplated herein, (ii) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of any credit extended hereunder, (iii) any actual
or threatened investigation, litigation or other proceeding relating to any
credit extended or proposed to be extended as contemplated herein or (iv) the
execution, delivery, performance or enforcement of any Loan Document and any
instrument, document or agreement executed pursuant hereto or thereto, except
for any such Indemnified Liabilities (x) that a court of competent jurisdiction
determined arose on account of the relevant Indemnified Party's gross negligence
or wilful misconduct or (y) that constitute loss of profit, loss of income or
revenue or loss of business opportunity of such Indemnified Party.
(b) Without limiting the generality of the indemnity set out in
Section 8.05(a), the Borrowers hereby further agree to indemnify, exonerate and
hold the Indemnified Parties free and harmless from and against any and all
claims, demand, actions, causes of action, suits, losses, costs, charges,
liabilities and damages, and expenses in connection therewith, including,
without limitation, reasonable legal fees and reasonable out of pocket
disbursements, and amounts paid in settlement, of any and every kind whatsoever
(collectively, in this Section 8.05(b), the "Indemnified Liabilities"), paid,
incurred or suffered by, or asserted against the Indemnified Parties or any of
them for, with respect to, or as a direct or indirect result of; (i) the
presence on or under, or the Release from, any real property legally or
beneficially owned (or any estate or interest which is owned), leased, used or
operated by the Borrower or any of its subsidiaries of any Hazardous Material or
(ii) the breach or violation of any Environmental Law by the Borrowers or any of
their respective subsidiaries, regardless of whether caused by, or within the
control of, the Borrowers or such subsidiaries, except for any such Indemnified
Liabilities (x) that a court of competent jurisdiction determined arose on
account of the relevant Indemnified Party's gross negligence or wilful
misconduct or (y) that constitute loss of profit, loss of income or revenue or
loss of business opportunity of such Indemnified Party.
(c) Each Indemnified Party shall notify the Borrowers as soon as
reasonably practicable upon becoming aware of facts which the Indemnified Party
believes in good faith could give rise to a claim under this Section 8.05.
(d) All obligations provided for in this Section 8.05 shall survive
the permanent repayment of all of the outstanding credit hereunder and the
termination of the Credit Facilities and this Agreement and shall not be reduced
or impaired by any investigation made by or on behalf of the Administrative
Agent or the Lenders or any of them.
(e) The Borrowers hereby agree that, for the purposes of effectively
allocating the risk of loss placed on the Borrowers by this Section 8.05, the
Administrative Agent and each Lender shall be deemed to be acting as the agent
or trustee on behalf of and for the benefit of their respective shareholders,
officers, directors, employees and agents.
(f) If, for any reason, the obligations of the Borrowers pursuant to
this Section 8.05 shall be unenforceable, the Borrowers agree to make the
maximum contribution to the payment and
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satisfaction of each obligation that is permissible under applicable law, except
to the extent that a court of competent jurisdiction determines such obligations
arose on account of the gross negligence or wilful misconduct of any Indemnified
Party.
8.06 PAYMENTS FREE AND CLEAR OF TAXES.
(a) Any and all payments made by the Borrowers under or pursuant to
any Loan Document to the Administrative Agent or any Lender shall be made free
and clear of, and without deduction for, any and all present or future taxes,
levies, imposts, deductions, charges, fees, duties or withholding or other
charges of any nature imposed by any taxing authority, and all liabilities with
respect thereto, imposed by any jurisdiction as a consequence or result of any
action taken by a Borrower including the making of any payment under or pursuant
to any Loan Document excluding, in the case of the Administrative Agent or the
Lenders or any of them, taxes imposed on its net income or capital taxes or
receipts and franchise taxes (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If a Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable to the Administrative Agent or any such Lender
under or pursuant to any Loan Document, the sum payable to the Administrative
Agent or such Lender, as the case may be, shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 8.06) the recipient thereof receives
an amount equal to the sum it would have received had no such deductions been
made.
(b) The Borrowers hereby indemnify and hold harmless the
Administrative Agent and each such Lender for the full amount of Taxes and for
any incremental Taxes due to a Borrower's failure to remit to the Administrative
Agent and the Lenders the required receipts or other required documentary
evidence or due to a Borrower's failure to pay any Taxes when due to the
appropriate taxing authority (including, without limitation, any Taxes imposed
by any jurisdiction on amounts payable under this Section 8.06) paid by the
Administrative Agent or any Lender, as the case may be, and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally assessed. The
Administrative Agent or any Lender who pays any Taxes shall promptly notify the
Borrowers of such payment and, if such payment was made pursuant to an incorrect
or illegal assessment, shall reasonably co-operate with the Borrowers, at the
expense of the Borrowers, in any dispute of such assessment. Payment pursuant to
this indemnification shall be made within 30 days from the date the
Administrative Agent or such Lender, as the case maybe, makes written demand
therefor.
(c) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers contained
in this Section 8.06 shall survive the repayment of the outstanding credit
hereunder and the termination of the Credit Facilities and this Agreement.
(d) Notwithstanding any other provision hereof, any Lender which is
not a resident of Canada for the purpose of the Income Tax Act (Canada) shall
not be entitled to the benefits of Section 8.06(a), (b) and (c) to the extent
they relate to withholding tax on payments to be made by the Borrowers to such
Lender.
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ARTICLE 9
REPAYMENTS AND PREPAYMENTS
9.01 REPAYMENT OF REVOLVING FACILITY.
(a) The aggregate credit outstanding under the Revolving Facility
together with all accrued and unpaid interest thereon and all accrued and unpaid
fees with respect thereto shall be repaid in full by the Borrowers to the
Lenders on January 2, 2005, unless extended in the sole and absolute discretion
of the Lenders for one or more further periods of 12 months (such date, as so
extended from time to time, the "Revolver Maturity Date").
(b) For greater certainty, the parties acknowledge that the
references in paragraph (a) above to possible extensions or renewals of the
Revolving Maturity Date beyond January 2, 2005 shall in no way be construed as
evidencing or implying any commitment, undertaking, understanding or agreement
on the part of the Administrative Agent or the Lenders that any extension or
renewal of the Revolving Facility beyond such date is now contemplated or
assumed or will be granted. The Administrative Agent and the Lenders may, but
shall be under no obligation to, consider any request by the Borrowers for such
an extension or renewal in the normal course if and when it is made, and may
reject such request without giving reasons or accept the same upon such terms
and conditions as the Administrative Agent and the Lenders may consider
appropriate, all in the sole and absolute discretion of the Administrative Agent
and the Lenders, and neither the Administrative Agent nor the Lenders can give
any assurance whatever that any such request will be granted or is likely to be
granted, either on the terms proposed by the Borrowers or otherwise.
9.02 REPAYMENT OF NON-REVOLVING FACILITY AND SUPPLEMENTAL TERM FACILITY.
Commencing July 30, 2004, the aggregate principal amount outstanding on such
date under the Non-Revolving Facility and the Supplemental Term Facility shall
be repaid in 54 equal monthly instalments. Each such instalment shall be payable
on the last Banking Day of each calendar month from and including July 2004 to
and including November 30, 2008 with the final instalment payable on the Term
Maturity Date. Any remaining balance of credit outstanding under the
Non-Revolving Facility and the Supplemental Term Facility shall also be paid in
full on the Term Maturity Date. Each such payment shall be applied to the
Non-Revolving Facility and the Supplemental Term Facility on a pro rata and pari
passu basis.
9.03 VOLUNTARY PREPAYMENTS.
A Borrower shall be entitled, at its option and upon five Banking Days'
irrevocable notice to the Administrative Agent, to prepay all or any portion of
any outstanding Loan at any time subject to the following terms and conditions:
(a) all or any portion of any Loan outstanding under the Revolving
Facility may be prepaid at any time;
(b) subject to paragraph (c) below, all or any portion of any Loan
outstanding under the Non-Revolving Facility or the Supplemental
Term Facility may be prepaid but such prepayments shall be
applied in the following order:
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(i) first, as to the aggregate amount of credit outstanding
under both the Non-Revolving Facility and the
Supplemental Term Facility concurrently, on a pro rata
and PARI PASSU basis; and
(ii) second, as to the remainder, if any, to the Revolving
Facility;
(c) notwithstanding paragraph (b)(i) above, the amount of a
prepayment may be applied to the Supplemental Term Facility
without a corresponding application to the Non-Revolving
Facility if and to the extent that such prepayment is made from
the proceeds of Dundee Take-Out Financing, as confirmed by a
certificate of an officer of BRL delivered to the Administrative
Agent at the time such prepayment is made;
(d) section 8.04 shall be complied with in connection with any such
prepayment;
(e) any such prepayment shall be applied to each instalment of
principal payable under Section 9.02 in inverse order of the
dates on which such instalments were due; and
(f) any such prepayment of all or any portion of any outstanding
Loan under any Credit Facility shall be in an amount of no less
than $100,000 and otherwise in multiples of $100,000.
Amounts which are prepaid as aforesaid under the Non-Revolving Facility or the
Supplemental Term Facility may not be reborrowed and, subject to paragraphs (b)
and (c) above, may be applied by the Administrative Agent and the Majority
Lenders to such Loans or portions thereof as the Majority Lenders may elect in
their sole discretion, regardless of the date on which they are advanced or are
repayable. Amounts which are prepaid as aforesaid under the Revolving Facility
may be reborrowed provided that such reborrowing does not result in a Credit
Excess.
9.04 MANDATORY PAYMENTS.
(a) Within one Banking Day of receipt, the applicable Borrower shall
remit to the Administrative Agent 100% of:
(i) any Proceeds of Sale (except for the balance of the Lapa
Proceeds remaining after $5,000,000 thereof was applied
in reduction of the Non-Revolving Facility and
Supplemental Term Facility, which balance shall be used
for general corporate purposes), net of reasonable costs
of disposition (or such lesser percentage as the Lenders
in their sole discretion may determine) ("Applicable Net
Proceeds of Sale"), and
(ii) the net proceeds of any issue of securities to a Lender
or to Standard (each, a "Warrant Holder") pursuant to
the exercise of warrants granted to such Warrant Holder
("Net Warrant Proceeds").
(b) The Administrative Agent shall apply any Applicable Net Proceeds of Sale
remitted to it to the aggregate credit outstanding under the Credit Facilities,
as follows:
(i) first, to pay such portion of amounts due hereunder as fees,
costs and expenses as the Majority Lenders may agree;
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(ii) second, as to the balance of such Applicable Net Proceeds of
Sale remaining after the application thereof set out in
paragraph (i) above, to pay the amounts of credit outstanding
under the Non-Revolving Facility and the Supplemental Term
Facility, on a pro rata and pari passu basis;
(iii) third, as to the balance of such Applicable Net Proceeds of Sale
remaining after the application thereof set out in paragraphs
(i) and (ii) above, to pay amounts due as interest under the
Revolving Facility; and
(iv) fourth, as to the remaining balance, if any, to repay amounts of
credit outstanding as principal under the Revolving Facility and
to reduce the Revolving Facility by such amounts.
Such proceeds may be applied by the Administrative Agent and the Lenders to such
Loans or portions thereof as the Administrative Agent and the Majority Lenders
may elect in their sole discretion regardless of the dates on which they were
advanced.
(c) The Administrative Agent shall apply any Net Warrant Proceeds in
respect of warrants exercised by a particular Warrant Holder to pay to such
Warrant Holder the Warrant Holder's Pro Rata Share of the credit outstanding
under the Non-Revolving Facility; and upon such application, the Individual
Commitment of the Warrant Holder relating to the Non-Revolving Facility shall be
reduced to the extent of such application; provided that if the Warrant Holder
is Standard: (i) the applicable Pro Rata Share for Standard shall be calculated
by reference Commitment No. 2 for the Non-Revolving Facility, as set out in
Schedule A hereto, as if Standard were a Lender having such Commitment No. 2;
and (ii) the Net Warrant Proceeds shall be applied only to reduce such
Commitment No. 2.
(d) Within 30 days after the end of each Fiscal Quarter, commencing
with the Fiscal Quarter ending March 31, 2004, the Borrowers shall apply to the
aggregate credit outstanding under the Non-Revolving Facility and the
Supplemental Term Facility, on a pro rata and pari passu basis, an amount equal
to 15% of the Excess Cash Flow for such Fiscal Quarter. To the extent that
Excess Cash Flow for any Fiscal Quarter is negative, any positive Excess Cash
Flow for subsequent Fiscal Quarters will be netted against any such negative
Excess Cash Flow for purposes of this Section 9.04(d).
(e) Amounts of the Non-Revolving Facility and the Supplemental Term
Facility which are prepaid under this Section 9.04 may not be reborrowed.
Amounts which are prepaid under this Section 9.04 under the Revolving Facility
may be reborrowed provided that such reborrowing does not result in a Credit
Excess.
(f) Any prepayments made under this Section 9.04 in respect of the
Non-Revolving Facility or the Supplemental Term Facility shall be applied to
each instalment of principal payable under Section 9.02 in inverse order of the
dates on which such instalments were due.
9.05 REIMBURSEMENT OR CONVERSION ON PRESENTATION OF LETTERS.
(a) On presentation of a Letter and payment thereunder by the
Issuing Lender, the Borrowers shall forthwith pay to the Administrative Agent
for the account of the Issuing Lender, and thereby reimburse the Issuing Lender
for, all amounts paid by the Issuing Lender pursuant to such
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Letter; failing such payment, the relevant Borrower shall be deemed to have
effected a conversion of such Letter into: (a) a Prime Rate Loan in the case of
a Letter denominated in Canadian dollars or (b) an ABRCAN Loan, in the case of a
Letter denominated in United States dollars, in each case to the extent of the
payment of the Issuing Lender thereunder.
(b) (i) If the Issuing Lender makes payment under any Letter
and the Borrowers do not fully reimburse the Issuing
Lender on or before the date of payment, then Section
9.05(a) shall apply to deem a Loan to be outstanding to
the relevant Borrower under this Agreement in the manner
therein set out. Each Lender shall, on request by the
Issuing Lender, immediately pay to the Issuing Lender an
amount equal to such Lender's Pro Rata Share of the
amount paid by the Issuing Lender such that each Lender
is participating in the deemed Loan in accordance with
its Pro Rata Share.
(ii) Each Lender shall immediately on demand indemnify the
Issuing Lender to the extent of such Lender's Pro Rata
Share of any amount paid or liability incurred by the
Issuing Lender under each Letter issued by it to the
extent that the Borrowers do not fully reimburse the
Issuing Lender therefor.
(iii) For certainty, the obligations in this Section 9.05(b)
shall continue as obligations of the Persons who were
Lenders at the time each such Letter was issued
notwithstanding that any such Lender may assign its
rights and obligations hereunder, unless the Issuing
Lender specifically releases such Lender from such
obligations in writing.
9.06 LETTERS SUBJECT TO AN ORDER.
The Borrowers shall pay to the Issuing Lender an amount equal to the maximum
amount available to be drawn under any unexpired Letter which becomes the
subject of any Order; payment in respect of each such Letter shall be due
forthwith upon demand in the currency in which such Letter is denominated.
9.07 CREDIT EXCESS AND REPAYMENT OF CREDIT EXCESS.
The Borrowers shall repay to the Lenders on demand by the Administrative Agent
the amount of any Credit Excess with respect to the Revolving Facility existing
from time to time, any such repayment to be made no later than one Banking Day
after the making of such demand.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.01 REPRESENTATIONS AND WARRANTIES.
To induce the Administrative Agent and the Lenders to enter into this Agreement
and to extend credit to the Borrowers hereunder from time to time, the Borrowers
hereby represent and warrant to the Administrative Agent and the Lenders as at
the date hereof, as at the effective date of each Compliance Certificate and as
at the date of each extension of credit hereunder, as follows (except as may be
otherwise disclosed in Schedule G hereto) and acknowledge and confirm that the
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Administrative Agent and the Lenders are relying upon such representations and
warranties in executing this Agreement and in extending credit hereunder:
(a) STATUS AND POWER. Each Obligor is a corporation duly
incorporated and organized and validly existing under the laws
of its jurisdiction of incorporation. No Obligor has been
dissolved nor have any steps been taken to initiate any such
dissolution, except for Santa Xxxxxxx, in respect of which a
notice of intent to dissolve has been filed under the CBCA on
July 26, 2001. Each Obligor is duly qualified, registered or
licensed in all jurisdictions where such qualification,
registration or licensing is required for such Obligor to carry
on its business, except where failure to do so could reasonably
be expected to have a Material Adverse Effect. Each Obligor has
all requisite capacity, power and authority to own, hold under
licence or lease its properties, to carry on its business and to
otherwise enter into, and carry out the transactions
contemplated by, the Loan Documents to which it is a party.
Without restricting the generality of the foregoing, Tunisiaco
holds the CARTE DE COMMERCANT required under the laws of Tunisia
for Tunisiaco to carry on business there.
(b) AUTHORIZATION AND ENFORCEMENT OF LOAN DOCUMENTS. All necessary
action, corporate or otherwise, has been taken to authorize the
execution, delivery and performance by each Obligor of the Loan
Documents to which it is a party. Each Obligor has duly executed
and delivered the Loan Documents to which it is a party. The
Loan Documents to which each Obligor is a party are legal, valid
and binding obligations of such Obligor, enforceable against
such Obligor by the Administrative Agent and the Lenders in
accordance with their respective terms, except to the extent
that the enforceability thereof may be limited by (i) applicable
bankruptcy, insolvency, moratorium, reorganization and other
laws of general application limiting the enforcement of
creditors' rights generally and (ii) the fact that the courts
may deny the granting or enforcement of equitable rights.
(c) COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
performance by each Obligor of the Loan Documents to which it is
a party, and the consummation of the transactions contemplated
herein and therein, do not and will not conflict with, result in
any breach or violation of, or constitute a default under the
terms, conditions or provisions of the articles of incorporation
or by-laws of the Obligors, any Applicable Law or any agreement,
lease, licence, permit or other instrument to which any Obligor
is a party or is otherwise bound or by which any Obligor
benefits or to which its property is subject and do not require
the consent or approval of any Official Body or any other Person
except as has been obtained. Each Obligor has complied with all
Applicable Law in respect of the Loan Documents and the
transactions contemplated herein.
(d) COMPLIANCE WITH LAWS. None of the Obligors is in violation of
any agreement, employee benefit plan, pension plan, mortgage,
franchise, licence, judgment, decree, order, statute, rule or
regulation relating in any way to itself, to the operation of
its business or to its property or assets and which could
reasonably be expected to have a Material Adverse Effect.
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(e) LITIGATION. There are no actions, suits, investigations, claims
or proceedings which have been commenced or have been threatened
in writing against or affecting any of the Obligors before any
Official Body in respect of which there is a reasonable
possibility of a determination adverse to the relevant Obligor
and which, if determined adversely, could reasonably be expected
to have a Material Adverse Effect.
(f) ENVIRONMENTAL COMPLIANCE.
(i) All facilities and property (including underlying
groundwater) owned, leased, used or operated by the
Obligors have been, and continue to be, owned, leased,
used or operated by the Obligors in compliance with all
Environmental Laws, except where failure to do so could
not reasonably be expected to have a Material Adverse
Effect.
(ii) There are no pending or threatened (in writing):
(A) claims, complaints, notices or requests for
information received by the Obligors with
respect to any alleged violation of any
Environmental Law, except such as could not
reasonably be expected to have a Material
Adverse Effect, or
(B) complaints, notices or inquiries to the Obligors
regarding potential liability under any
Environmental Law which liability could
reasonably be expected to have a Material
Adverse Effect.
(iii) There has been no Release of Hazardous Materials at, on,
under or from any property now or previously owned,
leased, used or operated by the Obligors that, singly or
in the aggregate, have, or could reasonably be expected
to have, a Material Adverse Effect.
(iv) The Obligors have been issued and are in compliance with
all permits, certificates, approvals, licences and other
authorizations under any Environmental Laws to carry on
their respective businesses, except where failure to do
so could not reasonably be expected to have a Material
Adverse Effect.
(v) Except as previously disclosed in Schedule S to the
Existing Credit Agreement or as disclosed in Schedule Q
hereto, no conditions exist at, on or under any property
now or previously owned, leased, used or operated by the
Obligors which, with the passage of time, or the giving
of notice or both, would give rise to liability under
any Environmental Law in effect at the time, which
liability could reasonably be expected to have a
Material Adverse Effect.
(vi) The Obligors have not within the immediately preceding
10 years been convicted of an offence for non-compliance
with any Environmental Laws, Environmental Permits or
Environmental Orders or been fined or otherwise
sentenced or settled such prosecution short of
conviction.
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(vii) The Obligors have in effect a management structure and
policies and procedures that will permit them to
effectively management environmental risk and respond in
a timely manner in compliance with the Environmental
Laws, Environmental Orders and Environmental Permits in
the event of Release of Hazardous Materials in, on or
under their property.
(g) LOCATION OF ASSETS. The various types of property and assets of
the Obligors are now located at the addresses set forth in
Schedule D hereto and such other addresses as new subsidiaries
of the Borrowers may have certified to the Administrative Agent
pursuant to Section 11.02(m) hereof and such other addresses as
the Borrowers may have notified the Administrative Agent
pursuant to Section 11.02(k) hereof.
(h) FINANCIAL STATEMENTS. The Financial Statements were prepared in
accordance with Generally Accepted Accounting Principles
consistently applied in accordance with past practice. The
balance sheets contained in the Financial Statements fairly
present the consolidated financial condition of BRL as at the
respective dates thereof and the statements of income contained
in the Financial Statements fairly present the consolidated
results of operations of BRL during the respective fiscal
periods covered thereby.
(i) TAX RETURNS AND TAXES. Each Obligor has filed all tax returns
and tax reports required by law to have been filed by it and has
paid all taxes and governmental charges thereby shown to be
owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with Generally
Accepted Accounting Principles shall have been set aside on its
books.
(j) TITLE TO ASSETS. No person has any agreement or right to acquire
any of the assets of the Obligors or any interest therein other
than sales or leases of assets in the ordinary course of
business and Permitted Liens. The Obligors have good title to
their assets and have not received any notice of a potential
defect, including, without limitation any defect arising from
any aboriginal claim asserted in respect of any asset, in their
title to any of their assets which, if substantiated, would be
reasonably likely to have a Material Adverse Effect.
(k) NAME. No Obligor has a French form of its corporate name, except
as has been notified to the Administrative Agent.
(l) CONSENTS, APPROVALS, ETC. No consents, approvals,
acknowledgments, undertakings, non-disturbance agreements,
directions or other documents or instruments (other than those
which have been obtained) are required to be entered into by any
Person to make effective the Security created or intended to be
created by the Obligors pursuant to the Security Documents.
(m) SUBSIDIARIES AND PARTNERSHIPS. Each of Tunisiaco, CZL, Chileco,
Santa Xxxxxxx and Consell is a directly wholly-owned subsidiary
of BRL. Hondurasco is a directly wholly-owned subsidiary of
Santa Xxxxxxx. There are no subsidiaries of CZL, Tunisiaco,
Chileco and Consell other than those of which the Administrative
Agent
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has been notified pursuant to Section 11.02(m). There are no
subsidiaries of Santa Xxxxxxx other than Hondurasco and those of
which the Administrative Agent has been notified pursuant to
Section 11.02(m). Santa Xxxxxxx filed a Notice of Intent to
Dissolve with Industry Canada on July 26, 2001. Upon such
dissolution, the shares of American Pacific Honduras, S.A. de
C.V. now held by Santa Xxxxxxx will be transferred to BRL. There
are no subsidiaries of BRL other than 3064077 Canada Inc., the
other Obligors and those of which the Administrative Agent has
been notified pursuant to Section 11.02(m). No Obligor is a
member of, or a partner or participant in, any active or
material partnership, joint venture or syndicate.
(n) PLACE OF BUSINESS. With respect to each Obligor, the location of
each place of business, the location of the principal place of
business, the location of the chief executive office and the
location of the registered or head office is as set forth in
Schedule E hereto.
(o) CAPITAL OF CZL AND MATERIAL SUBSIDIARIES. The authorized and
issued capital of, and the owner or owners of record of all of
the issued and outstanding shares of, CZL and each of the
Material Subsidiaries is as set forth in Schedule F hereto. All
of the issued capital of CZL and each of the Material
Subsidiaries has been issued and is outstanding as fully paid
and non-assessable. The share capital of each Material
Subsidiary, including without limitation, Tunisiaco, meets or
exceeds any requirement of Applicable Law to maintain a minimum
amount of capital. There are no outstanding warrants, options or
other agreements which require or may require the issuance of
any shares of CZL or any of the Material Subsidiaries or the
issuance of any debt or securities convertible into shares of
CZL or any of the Material Subsidiaries, there are no
outstanding debt or securities convertible into shares of CZL or
any of the Material Subsidiaries and there are no shares of CZL
or any of the Material Subsidiaries allotted for issuance.
(p) CZL BONDS. The CZL Bonds have been duly and validly issued by
CZL and are legal, valid and binding obligations of CZL,
enforceable against CZL by the holders of record thereof in
accordance with their terms. BRL is the beneficial holder of all
of the issued and outstanding CZL Bonds.
(q) NO BOOK-BASED SECURITIES. None of the securities pledged
pursuant to the pledge agreement referred to in Section
11.04(j)(v) hereof are held through a depository, clearing
agency or other securities intermediary unless they have been
pledged in a manner satisfactory to the Administrative Agent and
its counsel.
(r) EL TOQUI ROYALTY PAYMENTS. Attached as Schedule P hereto is a
summary of the net smelter return royalty payments being made to
a subsidiary of Xxxxxxx Gold Corporation with respect to the El
Toqui Mine as at the date hereof.
(s) NO OMISSIONS. None of the representations and statements of fact
set forth in this Section 10.01 omits to state any material fact
necessary to make such representation or statement of fact not
misleading in any material respect.
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10.02 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All of the representations and warranties of the Borrowers contained in Section
10.01 shall survive the execution and delivery of this Agreement and shall
continue until all credit outstanding hereunder has been repaid and the Credit
Facilities and this Agreement have been terminated notwithstanding any
investigation made at any time by or on behalf of the Administrative Agent or
any of the Lenders.
ARTICLE 11
COVENANTS
11.01 OCTOBER OFFERING PROCEEDS.
(a) NOTICE RE SATISFACTION OF ESCROW CONDITIONS. On the Amendment
Effective Date, BRL shall give notice pursuant to the
Subscription Receipt Indenture dated October 7, 2003 between
BRL, Xxxxxxxxx XxXxxxxx & Partners (the "Lead Underwriter") and
Computershare Trust Company of Canada as indenture trustee
("Computershare") to Computershare to the effect that:
(i) a written agreement has been entered into between BRL
and the Lenders for BRL to pay down 50% of the
indebtedness owed by BRL to the Lenders under the
Non-Revolving Facility and the Supplemental Term
Facility, on a PARI PASSU basis; and
(ii) a written agreement has been entered into by the Lenders
to extend the term of the remaining indebtedness of BRL
such that the new term of the Non-Revolving Facility and
Supplemental Term Facility will be at least five years
and the Revolving Facility will remain available to BRL
under terms which are acceptable BRL.
(b) APPLICATION OF OCTOBER OFFERING PROCEEDS. On or immediately
following the Escrow Release Date, BRL, together with the Lead
Underwriter, shall irrevocably direct Computershare to release
$900,900 of the proceeds of the October Offering to the Lead
Underwriter and the balance of such proceeds to the
Administrative Agent; and BRL shall irrevocably authorize and
direct the Administrative Agent to apply such balance to the
extent necessary to reduce by 50% the principal balance
outstanding on the Amendment Effective Date under each of the
Non-Revolving Facility (which principal balance for greater
certainty is approximately $17,631,000 as of the date hereof)
and the Supplemental Term Facility (which principal balance for
greater certainty is $6,500,000 as of the date hereof) as of the
date of such application on a pro rata and PARI PASSU basis.
(c) Forthwith after the outstanding principal balance of the
Supplemental Term Facility has been reduced by 50% as required
under paragraph (b) above, the Administrative Agent shall give
notice of such reduction to The Bank of Nova Scotia as issuer of
the Dundee Letter of Credit.
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11.02 AFFIRMATIVE COVENANTS.
The Borrowers hereby covenant and agree with the Administrative Agent and the
Lenders that, until all credit outstanding hereunder has been repaid in full and
the Credit Facilities and this Agreement have been terminated and unless waived
in writing in accordance with Section 14.14:
(a) PROMPT PAYMENT. The Borrowers shall duly and punctually pay or
cause to be paid to the Lenders and the Administrative Agent all
amounts payable under the Loan Documents at the dates and
places, in the currency and in the manner mentioned therein. The
Borrowers shall, and shall cause the Material Subsidiaries to,
maintain, perform and observe all of their respective
obligations under the Loan Documents.
(b) FINANCIAL REPORTING. The Borrowers shall furnish the
Administrative Agent with the following documents, statements
and reports, with sufficient copies for each of the Lenders:
(i) ANNUAL FINANCIALS - as soon as available and, in any
event, within 120 days after the end of each Fiscal
Year, copies of BRL's audited annual consolidated,
unaudited unconsolidated and consolidating financial
statements consisting of a balance sheet, statement of
profit and loss and surplus and statement of changes in
financial condition for each such year, together with
the notes thereto, all prepared in accordance with
Generally Accepted Accounting Principles consistently
applied together with a report of BRL's auditors
thereon;
(ii) QUARTERLY FINANCIALS - as soon as available and, in any
event, within 60 days after the end of each Fiscal
Quarter, copies of BRL's unaudited quarterly
consolidated, unconsolidated and consolidating financial
statements, in each case consisting of a balance sheet,
statement of profit and loss and surplus and statement
of changes in financial condition for each such period
all in reasonable detail and stating in comparative form
the figures for the corresponding date and period in the
previous Fiscal Year, all prepared in accordance with
Generally Accepted Accounting Principles consistently
applied and certified by BRL's chief financial officer;
(iii) COMPLIANCE CERTIFICATE - concurrently with furnishing
the financial statements pursuant to Sections
11.02(b)(i) and (ii), a Compliance Certificate stating,
among other things, that the Borrowers are not in
default under the terms and conditions of this Agreement
and that no Default or Event of Default has occurred and
is continuing (or, if applicable, specifying those
defaults or events notified in accordance with Section
11.02(r));
(iv) BORROWING BASE WORKSHEETS - as soon as possible after
the end of each calendar month and in any event within
15 days thereafter, and until the Administrative Agent
shall otherwise advise BRL in writing, on the first
Banking Day of each week, a worksheet showing a detailed
calculation of the Borrowing Base as at the end of such
calendar month or the preceding week, as the case may
be, in a form satisfactory to the Administrative Agent;
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(v) MINE REPORT - as soon as possible and, in any event,
within 30 days after the end of each calendar month, a
summary report on each Mine which is in operation, which
report shall be in a form satisfactory to the
Administrative Agent and shall include, without
limitation, a brief comment on the operations of each
Mine during such month and a comparison of actual and
budgeted amounts for major production, operating and
capital cost parameters for such month;
(vi) THIRD PARTY REPORTS - within 15 days of receipt thereof
by the Borrowers, any third party report on the proven
and probable reserves of the mineral properties of BRL
and its subsidiaries (other than Non-Recourse
Subsidiaries);
(vii) UPDATED RESERVES - within 45 days after the end of each
Fiscal Year, updates to proven and probable reserves of
BRL and its subsidiaries (other than Non-Recourse
Subsidiaries) showing year-over-year changes including,
without limitation, a reconciliation of actual tonnes
and grade mined compared to predictions for the areas
mined and an explanation of any changes to the
parameters related to the geological modal;
(viii) MINE PLANS - as soon as possible and, in any event,
within 70 days after the end of each Fiscal Year, an
updated Mine Plan for each Mine and, within 15 days
after any material changes are made to any such Mine
Plan, the details of any such changes;
(ix) OPERATING BUDGET - as soon as possible and, in any
event, within 45 days after the end of each Fiscal Year,
a 1-year operating budget for the current Fiscal Year
and projections for the 4 years following the current
Fiscal Year;
(x) UPDATED FORECASTS - as soon as possible and, in any
event, within 45 days after the end of each Fiscal
Quarter, updated forecasts for the current Fiscal Year
and the 4 years following the current Fiscal Year
together with an explanation of any material variance
since the effective date of the previously delivered
update;
(xi) UPDATED BUSINESS PLAN - as soon as possible and in any
event within 45 days after the end of each Fiscal Year,
an update of the Business Plan.
(xii) EL TOQUI ROYALTY PAYMENTS - within 45 days after the end
of each Fiscal Quarter, an update of Schedule P hereto
showing any changes to the royalty payments referred to
in Section 10.01(r) hereof.
(xiii) BUSINESS PLAN PERFORMANCE -- as soon as possible and, in
any event, within 15 days after the end of each calendar
month, a report comparing the actual performance of the
Borrowers with the targets and objectives set out in the
Business Plan for the same period;
(xiv) OTHER - at the request of the Administrative Agent or
any Lender, such other information, reports,
certificates or other matters affecting the business,
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affairs, financial condition, property or assets of the
Borrowers or any of their subsidiaries (other than
Non-Recourse Subsidiaries where the requested
information is subject to a confidentiality covenant) as
the Administrative Agent may reasonably request,
including, without limitation, quarterly hedge positions
(if applicable) and annual environmental
assessment/audit reports.
(c) CAPACITY AND QUALIFICATION. The Borrowers shall, and shall cause
the Material Subsidiaries to, maintain their corporate existence
and maintain all requisite capacity, power and authority to
become and remain duly qualified, registered or licensed to (i)
carry on their business in each jurisdiction in which such
qualification is necessary for the proper conduct of their
business, (ii) own, hold under licence or lease their properties
in each jurisdiction in which such qualification is necessary
for the proper conduct of their business and (iii) carry out the
transactions contemplated by the Loan Documents; and without
restricting the generality of the foregoing, BRL shall not
permit Santa Xxxxxxx to complete its dissolution without first
providing the Administrative Agent and its counsel with copies
of all documentation relating thereto, including any general
conveyance or other instrument of assignment, all of which shall
be in form and substance satisfactory to the Administrative
Agent and its counsel.
(d) CONDUCT OF BUSINESS. The Borrowers shall, and shall cause the
Material Subsidiaries to, conduct their business in such a
manner so as to comply in all material respects with their
respective articles of incorporation and by-laws and all
Applicable Law and so as to observe and perform all their
material obligations under all agreements (including, without
limitation, the Loan Documents) to which it is a party or is
otherwise bound or by which it benefits or to which its property
is subject and which are necessary for the proper conduct of its
business. The Borrowers shall, and shall cause the Material
Subsidiaries to, conduct their business in such a manner so as
to comply with all mortgages, leases, franchises, licences,
certificates of approval, permits, judgments, decrees, orders,
statutes, rules or regulations relating in any way to them or
the operation of their business or to their property or assets,
the violation of which could reasonably be expected to have a
Material Adverse Effect. The Borrowers shall, and shall cause
the Material Subsidiaries to, keep its property and assets in
good condition and repair. The Borrowers shall, and shall cause
the Material Subsidiaries to, perform all obligations incidental
to any trust imposed upon them by statute and shall ensure that
any breaches of the said obligations and the consequences of any
such breach shall be promptly remedied. The Borrowers shall, and
shall cause the Material Subsidiaries to, from time to time pay
or cause to be paid all amounts related to taxes, wages,
workers' compensation obligations, government royalties or
pension fund obligations and any other amount which may result
in a lien, charge or similar encumbrance against the assets of
the Borrower or such subsidiary arising under statue or
regulation. The Borrowers shall, and shall cause the Material
Subsidiaries to, obtain and maintain all licenses, certificates
of approval, permits, registrations, approvals, franchises,
authorizations, consents and other rights which are required to
own their properties and assets and to operate their business,
the absence of which could reasonably be expected to have a
Material Adverse Effect.
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(e) USE OF PROCEEDS. The proceeds of the Revolving Facility shall be
used only for general corporate purposes. The proceeds of Dundee
Take-Out Financing may be used only to repay credit outstanding
under the Supplemental Term Facility. The Borrowers represent
and warrant that:
(i) the proceeds of the Non-Revolving Facility have been
used to refinance existing indebtedness relating to
prior acquisitions; and
(ii) the proceeds of the Supplemental Term Facility have been
used for general corporate purposes only and not, for
greater certainty, for the purpose of repaying amounts
outstanding under the Revolving Facility or the
Non-Revolving Facility.
(f) INSURANCE. The Borrowers shall, and shall cause the Material
Subsidiaries to, insure and keep insured, with insurers and upon
terms satisfactory to the Administrative Agent, acting
reasonably (including, without limitation, the undertaking of
the insurer to give the Administrative Agent 30 days' prior
written notice of the cancellation of any policy), all of its
property and assets customarily insured by companies carrying on
a similar business or owning or operating similar property and
assets against the customary risks and for the customary
amounts, with the Administrative Agent named as first loss payee
(except in respect of business interruption insurance and third
party liability insurance) and shall provide the Administrative
Agent, when requested, with copies of all such insurance
policies.
(g) TAXES. The Borrowers shall, and shall cause the Material
Subsidiaries to, file all tax returns and tax reports required
by law to be filed by them and pay all taxes, rates, government
fees and dues levied, assessed or imposed upon them and upon
their property or assets or any part thereof, as and when the
same become due and payable (save and except when and so long as
the validity of any such taxes, rates, fees, dues, levies,
assessments or imposts is being contested in good faith by
appropriate proceedings and adequate reserves are being
maintained in accordance with Generally Accepted Accounting
Principles), and the Borrowers shall deliver to the
Administrative Agent, when requested, written evidence of such
payments.
(h) REIMBURSEMENT OF EXPENSES. The Borrowers shall reimburse the
Administrative Agent and the Lenders, on demand, for all
reasonable out-of-pocket costs, charges and expenses incurred by
them or on their behalf (including, without limitation, the fees
and out-of-pocket disbursements of their legal counsel and any
environmental or insurance consultants retained by them) in
connection with the Administrative Agent's and the Lenders' due
diligence investigation, the negotiation, preparation,
execution, delivery, syndication, post-closing advertising,
interpretation and enforcement of the Loan Documents and all
other documentation ancillary to the completion of the
transactions contemplated hereby and thereby and any amendments
hereto or thereto and any waivers of any provisions hereof or
thereof (whether or not consummated or entered into), any
environmental audits and any lien search fees and Security
registration fees; provided that the Borrowers shall not be
required to reimburse the Administrative Agent and the Lenders
for fees and disbursements of their legal counsel incurred in
connection with the amendment,
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negotiation, preparation, execution or delivery of this
Agreement in excess of $75,000 (which limitation shall not
apply, however, to any fees and disbursements of legal counsel
incurred in connection with the Existing Credit Agreement or
Security Documents amended pursuant thereto). For greater
certainty and without restricting the generality of the
preceding sentence, the Borrowers agree to reimburse the
Administrative Agent for the fees and out-of-pocket
disbursements of local counsel for the Administrative Agent in
Chile, Tunisia, Honduras and Barbados in connection with legal
opinions as to whether all necessary steps have been taken to
facilitate expeditious realization in such jurisdictions and in
connection with the rectification of and amendments to the
Security referred to in Section 11.02(dd).
(i) INSPECTION OF ASSETS AND OPERATIONS. The Borrowers shall, and
shall cause the Material Subsidiaries to, permit representatives
of the Administrative Agent to inspect its property, assets and
operations and for that purpose to enter its premises and any
other location where its property or assets may be situated
during reasonable business hours and upon reasonable notice.
Furthermore, the Borrowers shall, at their expense, permit a
representative of the Administrative Agent to undertake a site
visit at each Mine once per year.
(j) BOOKS AND RECORDS. The Borrowers shall, and shall cause the
Material Subsidiaries to, keep proper books of account and
records covering all its business and affairs on a current
basis, make full, true and correct entries of its transactions
in such books, set aside on its books from their earnings all
such proper reserves as required by Generally Accepted
Accounting Principles and permit representatives of the
Administrative Agent to inspect such books of account, records
and documents and to make copies therefrom during reasonable
business hours and upon reasonable notice and to discuss the
affairs, finances and accounts of the Borrowers and the Material
Subsidiaries with the officers of the Borrowers and the Material
Subsidiaries and their auditors during reasonable business hours
and upon reasonable notice.
(k) LOCATION OF ASSETS. In the event the various types of property
and assets of the Obligors become located at any address other
than those addresses set forth in Schedule D hereto, the
Borrowers shall promptly notify the Administrative Agent of such
address.
(l) PLACE OF BUSINESS. If any Obligor changes the location of its
registered office, its chief executive office or its principal
place of business, the Borrowers shall promptly notify the
Administrative Agent in writing of the details of same.
(m) SUBSIDIARIES AND MATERIAL SUBSIDIARIES. The Borrowers shall
promptly notify the Administrative Agent of the acquisition,
creation or existence of each new subsidiary of BRL and provide
the Administrative Agent with copies of the most recently
prepared financial statements of such subsidiary. The Majority
Lenders may designate any subsidiary of BRL (other than a
Non-Recourse Subsidiary) in addition to Chileco, Consell,
Hondurasco, Santa Xxxxxxx or Tunisiaco as a Material Subsidiary
if:
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(i) the Majority Lenders, acting reasonably, determine that
such subsidiary is material to the business, affairs or
condition, financial or otherwise, of BRL;
(ii) the total assets of such subsidiary (as recorded on its
consolidated balance sheet in accordance with Generally
Accepted Accounting Principles) exceed 5% of the total
assets of BRL and its subsidiaries on a consolidated
basis (as recorded on its consolidated balance sheet in
accordance with Generally Accepted Accounting
Principles);
(iii) the total revenue of such subsidiary on a consolidated
basis exceeds 5% of the total revenue of BRL and its
subsidiaries on a consolidated basis; or
(iv) less than 90% of the consolidated assets of BRL are
owned or held by the Borrowers and Material
Subsidiaries;
and the Administrative Agent shall immediately notify the
Borrowers of such designation.
(n) ADDITIONAL SECURITY. The Borrowers shall, forthwith upon
receiving notice from the Administrative Agent that the Majority
Lenders have designated a subsidiary of BRL as a Material
Subsidiary, cause such subsidiary to deliver to the
Administrative Agent forthwith, in form and substance
satisfactory to the Administrative Agent and the Lenders:
(i) a Guarantee of such subsidiary;
(ii) evidence satisfactory to the Administrative Agent and
its counsel that such subsidiary is not legally
prohibited or restricted, by reference to the solvency
of such subsidiary or otherwise, from entering into and
performing its Guarantee;
(iii) a certificate of a senior officer of such subsidiary
certifying the jurisdiction of incorporation of such
subsidiary, a description of each type of property or
assets, whether tangible or intangible, of such
subsidiary and its location and the location of each
place of business, the chief executive office and the
registered office or head office of such subsidiary;
(iv) Material Subsidiary Security Documents of such
subsidiary;
(v) a certificate of status or good standing with respect to
such subsidiary and issued by the jurisdiction of
incorporation of such subsidiary;
(vi) certified copies of the charter documents and by-laws of
such subsidiary and of the resolutions of the board of
directors of such subsidiary approving the aforesaid
guarantee and security documents and of all documents
evidencing other necessary corporate action of such
subsidiary and government approvals, if any, with
respect to the guarantee and security documents;
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(vii) a certificate of a senior officer of such subsidiary
certifying the names and true signatures of its officers
authorized to sign the aforesaid guarantee and security
documents to be delivered by it hereunder;
(viii) share certificates representing all of the issued and
outstanding shares of such subsidiary, duly endorsed in
blank or with powers of attorney with respect thereto,
and any consents which may be required to permit the
pledge thereof to the Administrative Agent and any
subsequent disposition thereof by the Administrative
Agent in realizing on the Security constituted therein;
(ix) a favourable opinion of such additional subsidiary's
counsel as to such matters as the Administrative Agent
may reasonably request; and
(x) such other certificates, registrations and documentation
as the Administrative Agent may reasonably request.
(o) SECURITY. The Borrowers shall provide the Security contemplated
hereunder, registered, filed, recorded and perfected to the
satisfaction of the Administrative Agent and the Lenders.
(p) MAINTAIN PRIORITY OF CREDIT FACILITIES. The Borrowers shall take
all such actions as may be required such that the Liens securing
the Secured Obligations pursuant to the Security shall at all
times rank in priority to Liens securing any and all present and
future Debt of each of the Borrowers;
(q) NOTICE OF LITIGATION. The Borrowers shall promptly notify the
Administrative Agent of any actions, suits, claims or
proceedings commenced or threatened in writing against or
affecting the Borrowers or any of the Material Subsidiaries
before any Official Body which in any case or in the aggregate
could reasonably be expected to have a Material Adverse Effect.
Such notice shall include a description of such action, suit,
claim or proceeding and the Borrowers' assessment of the
duration, outcome and effect thereof.
(r) NOTICE OF DEFAULT OR EVENT OF DEFAULT. Upon the occurrence of
either a Default or an Event of Default of which either Borrower
is aware, such Borrower shall promptly deliver to the
Administrative Agent a notice specifying the nature and date of
occurrence of such Default or Event of Default, such Borrower's
assessment of the duration and effect thereof and the action
which such Borrower proposes to take with respect thereto.
(s) NOTICE OF MATERIAL ADVERSE EFFECT AND MATERIAL ADVERSE CHANGE.
The Borrowers shall promptly notify the Administrative Agent of
any event, circumstance or condition that has had or is
reasonably likely to have a Material Adverse Effect or that has
constituted or is reasonably likely to constitute a Material
Adverse Change.
(t) NOTICE OF ASSET ACQUISITIONS. The Borrowers shall promptly
notify the Administrative Agent of any acquisition by the
Borrowers or any of the Material Subsidiaries of assets for a
purchase price exceeding Cdn.$1,000,000.
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(u) NOTICE OF UNSCHEDULED MINE SHUTDOWNS. The Borrowers shall
promptly notify the Administrative Agent of any unscheduled
shutdown or material incident, event or circumstance in respect
of any mining, milling or similar operation owned or operated by
any Borrower or any Obligor that continues for seven calendar
days.
(v) CHANGE OF NAME. If any Obligor changes its corporate name, the
Borrowers shall forthwith notify the Administrative Agent in
writing of the details of such change. If any Obligor adopts a
French form of its corporate name, the Borrowers shall forthwith
so notify the Administrative Agent in writing.
(w) ENVIRONMENTAL MATTERS. The Borrowers shall, and shall cause the
Material Subsidiaries to,
(i) use and operate all of its facilities and properties in
compliance with all Environmental Laws, keep all
permits, approvals, certificates, licences and other
authorizations relating to environmental matters in
effect and remain in compliance therewith, and handle
all Hazardous Materials in compliance with all
applicable Environmental Laws, except where failure to
do so could not reasonably be expected to have a
Material Adverse Effect;
(ii) immediately notify the Administrative Agent and provide
copies upon receipt of all written claims, complaints,
notices or inquiries relating to the condition of its
facilities and properties or compliance with
Environmental Laws, which claims, complaints, notices or
inquiries relate to matters which would have, or may
reasonably be expected to have, a Material Adverse
Effect and shall proceed diligently to resolve any such
claims, complaints, notices or inquiries relating to
compliance with Environmental Laws; and
(iii) provide such information which the Administrative Agent
may reasonably request from time to time to evidence
compliance with this Section 11.02(w).
(x) ENVIRONMENTAL ASSESSMENTS. The Borrowers shall perform or cause
to be performed at their expense, either or both independent and
in-house environmental site assessments, environmental reviews
or audits of the Obligors' property:
(i) if such assessment or review is required by
Environmental Law; and
(ii) if a Default or an Event of Default relating to an
Environmental Claim has occurred and the Administrative
Agent or the Majority Lenders have made a written
request to it for such assessment, review or audit,
within 60 days after such request,
and it shall provide to the Administrative Agent and each
Lender, on a confidential basis, a copy of each such assessment
and review.
(y) COMMODITY HEDGING CONTRACTS. Forthwith after any Obligor enters
into a commodity price hedging contract, such Borrower shall
deliver to the Administrative Agent a true copy of such
contract.
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(z) TRANSFER OF CONCENTRATE TO CONSELL. BRL shall or shall cause
each Obligor whose assets in a particular jurisdiction are not
subject to a perfected security interest (or equivalent) in
favour of the Administrative Agent to sell to Consell all metal
concentrate production from all of its Foreign Mines located in
such jurisdiction immediately following the milling of such
concentrate, except for concentrate produced at the El Toqui
Mine and sold to customers resident in Brazil, provided that
payment for such latter concentrate is made by way of
irrevocable documentary letters of credit issued by banks
approved by the Administrative Agent on terms and conditions
satisfactory to the Administrative Agent.
(aa) PERIODIC AND ANNUAL AUDIT OF ACCOUNTS RECEIVABLE AND INVENTORY.
The Administrative Agent shall be entitled to perform a periodic
due diligence inspection, test and review of the Accounts
Receivable and Inventory of the Obligors on a mutually
convenient Banking Day, which shall be conducted as an external
audit no more frequently than once during each calendar year
(except as hereinafter provided) and shall in each case be
satisfied in all material respect with the results thereof;
PROVIDED HOWEVER, if the Administrative Agent in its reasonable
judgment is not satisfied that the results of any due diligence
inspection, test, and review performed pursuant hereto establish
that the Obligors' most recent determination of the Borrowing
Base was made in compliance with the applicable provisions of
this Agreement or is otherwise unsatisfied with the results of
such inspection, test or review, the Administrative Agent shall
be entitled to perform additional due diligence inspections,
tests and reviews of such Inventory and Accounts Receivable on
mutually convenient Banking Days until the Administrative Agent
shall be so satisfied; and PROVIDED FURTHER, that upon the
occurrence and during the continuation of an Event of Default,
the Administrative Agent shall be entitled to perform such
additional due diligence inspections, tests and review of such
Inventory and Accounts Receivable as any Lender shall deem
necessary or advisable.
(bb) REVIEW OF INVENTORY, ACCOUNTS RECEIVABLE AND BORROWING BASE.
Without limiting the generality of paragraph (aa) above, the
Borrowers shall, and shall cause their legal and financial
advisors to, assist and co-operate with the Administrative Agent
and the Lenders and their respective legal and financial
advisors in performing and completing from time to time, at the
Borrowers' expense, full inspections, tests and reviews of the
Accounts Receivable of the Obligors and such inspections, tests
and reviews of source documents relating to Inventory of the
Obligors, interviews with appropriate personnel of the Obligors
and the Material Subsidiaries regarding such Inventory, and, to
the extent required, physical inspection of samples of such
Inventory, to confirm, in each case, inter alia, that the
Obligors' most recent determination of the Borrowing Base was
made in compliance with the applicable provisions of this
Agreement, with such periodic updates as the Administrative
Agent may in its discretion require.
(cc) ENGAGEMENT OF PRICEWATERHOUSECOOPERS. The Borrowers acknowledge
that they have consented to the engagement by the Administrative
Agent of PricewaterhouseCoopers ("PWC") as financial advisors to
the Administrative Agent and the Lenders to provide the review
described in paragraph (aa) above and such other related
services as the Lenders, acting reasonably, consider necessary
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or appropriate and agree that they shall pay the fees of PWC for
such engagement in accordance with quotes for its services for
such engagement previously provided to the Borrowers.
(dd) RECTIFYING SECURITY AND DOCUMENTATION. The Borrowers shall
co-operate fully with the Administrative Agent and its counsel
and shall cause their Canadian and foreign counsel to take such
steps as may be necessary to:
(i) rectify any deficiencies in the Security and related
documentation as the Administrative Agent's counsel may
reasonably request, as more particularly set out in the
table attached hereto as Schedule R, no later than March
31, 2004;
(ii) amend the Security Documents and other Loan Documents to
the extent necessary or desirable under Applicable Law
to reflect the amendments to the Existing Credit
Agreement effected by this Agreement and to effect any
necessary registrations, filings or publication thereof
such that the Loan Documents continue to be enforceable
under Applicable Law and such that the Security
constituted thereby continues to secure the Secured
Obligations as modified by this Agreement without any
loss or interruption of any priority or perfection of
any Liens created by such Security, as soon as
practicable after the date hereof; and
(iii) obtain no later than March 31, 2004 an opinion of the
legal counsel to each Borrower, to Tunisiaco and to
Consell in each relevant jurisdiction, addressed to the
Administrative Agent and the Administrative Agent's
counsel, with respect to all matters as the
Administrative Agent may reasonably request.
(ee) SALES CONTRACT ASSIGNMENTS. The Borrowers shall, with respect to
each Accounts Receivable of any Obligor, take all necessary
actions to deliver the Notice of Assignment and obtain the
Acknowledgment of Assignment of the purchaser of Inventory
relating thereto and take all other actions necessary to arrange
that all proceeds of any such Accounts Receivable payable to any
Obligor be paid directly to the Administrative Agent at an
account designated by the Administrative Agent, no later than
the date on which the agreement giving rise to such Accounts
Receivable becomes effective provided, however, that any such
purchaser of Inventory that has already provided to the
Administrative Agent an acknowledgment substantially in the form
of Schedule J hereto with respect to a contract shall not be
required to provide to the Administrative Agent any such
Acknowledgment of Assignment with respect to such contract.
(ff) MARGIN FOR HEDGING CONTRACTS. The Borrowers shall, in the event
that the value of Liens in the form of cash collateral pledged
by the Obligors securing hedging obligation margins is equal to
or greater than $5,000,000 at any time, notify the
Administrative Agent of same at such time. The Borrowers shall
have 10 days from the date of such notice to reduce the value of
such Liens to an amount less than $5,000,000.
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(gg) PERFORMANCE TO BUSINESS PLAN. The Borrowers shall make their
best good faith efforts to conduct and shall cause the Material
Subsidiaries to conduct their business in accordance with the
Business Plan including without limitation, achieving the
financial targets and meeting the hedging objectives set out
therein.
(hh) HEDGING CONTRACTS. The Borrowers shall enter into a downside
protection hedging program in amounts and pricing mutually
satisfactory to the Borrowers and the Lenders, subject to the
restrictions set out in Section 11.04(g).
11.03 PERFORMANCE OF COVENANTS BY ADMINISTRATIVE AGENT.
The Administrative Agent may, upon notice by the Administrative Agent to the
Borrowers, perform any covenant of an Obligor under any Loan Document which an
Obligor fails to perform or cause to be performed and which the Administrative
Agent is capable of performing, including any covenants the performance of which
requires the payment of money, provided that the Administrative Agent shall not
be obligated to perform any such covenant on behalf of the Obligors and no such
performance by the Administrative Agent shall require the Administrative Agent
to further perform the Obligors' covenants or shall operate as a derogation of
the rights and remedies of the Administrative Agent or the Lenders under this
Agreement or as a waiver of such covenant by the Lenders. Any amounts paid by
the Administrative Agent as aforesaid shall be repaid by the Borrowers to the
Administrative Agent on demand.
11.04 RESTRICTIVE COVENANTS.
The Borrowers hereby covenant and agree with the Administrative Agent and the
Lenders that, until all credit outstanding hereunder has been repaid in full and
the Credit Facilities and this Agreement have been terminated and unless waived
in writing in accordance with Section 14.14:
(a) CHANGE OF BUSINESS. The Borrowers shall not, and shall not
permit any of the Material Subsidiaries to, change in any
material respect the nature of its business or operations or
conduct business or operations which are materially different
from the businesses and operations carried on by the Obligors on
the date hereof.
(b) ENCUMBRANCES. The Borrowers shall not, and shall not suffer or
permit any of the Material Subsidiaries to, enter into or grant,
create, assume or suffer to exist any Lien affecting any of
their property, assets or undertaking, save and except only for
the Permitted Liens.
(c) DEBT. The Borrowers shall not, and shall not suffer or permit
any of the Material Subsidiaries to, incur or permit or suffer
to exist any Debt other than the Permitted Debt.
(d) NO MERGER, AMALGAMATION, ETC. The Borrowers shall not, and shall
not permit any of the Material Subsidiaries to, enter into any
merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution),
except as permitted with respect to Santa Xxxxxxx under Section
11.02(c), or make any material change in its present method of
conducting business, except any subsidiary of any Borrower,
other than a Non-Recourse Subsidiary, may be merged, amalgamated
or consolidated with or into any Borrower (provided, that such
Borrower shall be the continuing or surviving corporation) or
with or into any one or more wholly owned Material Subsidiary of
any Borrower (PROVIDED that
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such Material Subsidiary shall be the continuing or surviving
corporation).
(e) AMENDMENTS ET AL. The Borrowers shall not, and shall not suffer
or permit any of the Material Subsidiaries to, amend, modify,
supplement, replace, waive or terminate any provisions of any
Related Party Material Agreement and shall not, and shall not
suffer or permit any of the Material Subsidiaries to, amend
their respective articles of incorporation, in each instance in
any manner which could reasonably be expected to have an adverse
effect on the Administrative Agent, the Lenders or the Security.
(f) DISPOSITION OF ASSETS. The Borrowers shall not, and shall not
permit any of the Material Subsidiaries to, sell or otherwise
dispose of any of its assets out of the ordinary course of
business. For greater certainty, the sale or other disposition
of assets out of the ordinary course of business shall include,
without limitation, the transfer, sale or assignment of mining
licences, rights, permits and any other similar intangible
assets.
(g) COMMODITY HEDGING CONTRACTS. The Borrowers shall not, and shall
not suffer or permit any of the Material Subsidiaries to, enter
into any commodity hedging contracts unless:
(i) in the case of CZL or a Material Subsidiary, it has
executed and delivered a Material Subsidiary Direction
and Acknowledgment and supporting documentation
substantially of the nature referred to in Section
11.02(n); and
(ii) after entering into such commodity hedging contract, no
more than 75% of the aggregate production of all Mines
would be subject to commodity hedging contracts, unless
the Administrative Agent, on behalf of the Majority
Lenders, gives its prior written consent to a greater
percentage of such production being subject to commodity
hedging contracts.
(h) DISTRIBUTIONS. BRL shall not undertake any Distribution other
than a purchase of outstanding shares in its capital stock
pursuant to a normal course issuer's bid.
(i) SHARES IN THE CAPITAL OF MATERIAL SUBSIDIARIES. The Borrowers
shall not permit any of the Material Subsidiaries to issue any
shares or other forms of securities in addition to those
currently issued and outstanding to Persons other than the
Borrowers or another Material Subsidiary. In the event that any
of the Material Subsidiaries issues any shares or securities as
aforesaid, the Borrowers shall take or shall cause to be taken
all steps necessary to ensure and/or preserve a first ranking
security interest by the Administrative Agent and the Lenders
over such shares or securities.
(j) LIMITATION ON INVESTMENTS. The Borrowers shall not, and shall
not permit any of the Material Subsidiaries to, make, or suffer
to exist, any capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment
in, any Person, except:
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(i) extensions of trade credit in the ordinary course of
business;
(ii) investments in Cash Equivalents;
(iii) investments by any Borrower in any Material Subsidiary
and investments by such Material Subsidiary in any
Borrower and in other Material Subsidiaries of any
Borrower, provided that, in the case of any such
investment or a series of investments aggregating
$25,000,000 or more, the Administrative Agent shall have
received prior notice of such investment;
(iv) agreements evidencing Hedging Obligations so long as
such agreements are entered into for hedging and not for
speculative purposes;
(v) purchases by any of the Borrowers or Material
Subsidiaries of freely tradeable securities of public
companies which constitute a portfolio investment,
provided that the aggregate cost of such securities does
not at any time exceed Cdn.$5,000,000 and that the
relevant Borrower or Material Subsidiary has granted a
security interest in and to such securities to the
Administrative Agent, for and on behalf of the Lenders
(without a requirement that such securities be deposited
with the Administrative Agent), as continuing collateral
security for the payment and performance of the Secured
Obligations, pursuant to a pledge agreement in form and
substance satisfactory to the Administrative Agent and
the Lenders; and
(vi) investments by BRL in Non-Recourse Subsidiaries,
provided that, over the term of the Non-Revolving
Facility (x) such investments are made by way of new
equity raised by BRL, (y) prior to making such
investment, BRL delivers to the Administrative Agent a
pro-forma financial projection for the consolidated
operations of BRL for the 12 month period following the
proposed date of such investment (based on assumptions
acceptable to the Lenders, acting reasonably).
The Lenders hereby agree to release any Security they may have
in the assets or shares of any Non-Recourse Subsidiary upon a
request in writing for same from the Borrowers; provided,
however, that such request in writing from the Borrowers shall
only be made following a request from a lender to such
Non-Recourse Subsidiary for the grant of security over such
assets or shares by such Non-Recourse Subsidiary to such lender.
(k) LIMITATIONS ON JOINT VENTURES, ETC. No Obligor shall enter into
a joint venture, partnership, business combination or similar
arrangement (each, a "Joint Venture") with any Person other than
an affiliate of such Obligor without first giving notice to the
Administrative Agent describing the proposed Joint Venture and
identifying all the parties thereto in reasonably complete
detail and obtaining the prior written consent of the
Administrative Agent, on behalf of the Majority Lenders, to such
Joint Venture, such consent not to be unreasonably withheld or
delayed; provided that if the Administrative Agent fails to
respond to a request for such consent within 5 Banking Days
after delivery of notice thereof to the Administrative Agent,
such
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consent shall be deemed to have been given. For greater
certainty, this paragraph (k) shall apply only to Joint Ventures
which an Obligor enters into or proposes to enter into on or
after the Amendment Effective Date and shall not apply to Joint
Ventures to which an Obligor had become a party or had entered
into a binding commitment to become a party prior to the
Amendment Effective Date.
(l) CAPITAL EXPENDITURES. In respect of Fiscal Year 2004, total
Capital Expenditures shall not exceed Cdn$15,568,000.00.
(m) FEES TO DUNDEE SECURITIES. BRL shall not make any monetary
payment on account of the approximately $1,030,000 in fees owing
to Dundee Securities Corporation for advisory services in
connection with the acquisition by BRL of the shares of Jascan
Resources Inc. prior to December 31, 2003, and then only if no
Default or Event of Default has occurred and is then continuing.
However, such fees may be satisfied in whole or in part prior to
that date by the issuance of shares in the capital of BRL to
Dundee Securities Corporation, subject to the consent of Dundee
Securities Corporation and receipt of all required regulatory
approvals.
ARTICLE 12
CONDITIONS PRECEDENT TO OBTAINING CREDIT
12.01 CONDITIONS PRECEDENT TO ALL CREDIT.
The obligation of the Lenders to extend credit hereunder is subject to
fulfilment of the following conditions precedent at the time such credit is
extended:
(a) no Credit Event has occurred and is continuing or would arise
immediately after giving effect to or as a result of such
extension of credit;
(b) the relevant Borrower shall have complied with the requirements
of Article 4, 5 or 6, as the case may be, in respect of the
relevant credit;
(c) the Administrative Agent has received from any two of the
Chairman, Chief Executive Officer, President, Chief Operating
Officer, Chief Financial Officer or Treasurer of BRL a
representation and warranty that such senior officers have no
reason to believe that the Borrowers will be in breach of any
covenant given by the Borrowers to the Lenders hereunder at the
time of delivery of the next Compliance Certificate; and
(d) the representations and warranties of the Borrowers contained in
Sections 10.01 of this Agreement and of the Obligors in the
other Loan Documents shall be true and correct in all material
respects on and as of the date such credit is extended as if
such representations and warranties were made on such date.
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12.02 CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT.
The effectiveness of the amendments to the Existing Credit Agreement expressed
to be effected by this Agreement is subject to the prior or concurrent
fulfilment of each of the following conditions precedent:
(a) the conditions precedent set forth in Section 12.01 shall have
been fulfilled;
(b) BRL shall have delivered to Computershare Trust Company of
Canada the irrevocable direction regarding the proceeds of the
October Offering referred to in Section 11.01(b);
(c) the Administrative Agent shall have received, each in form and
substance satisfactory to the Administrative Agent and the
Lenders:
(i) a copy of this Agreement duly executed by the Obligors;
(ii) a guarantee confirmation substantially in the form of
Schedule I hereto duly executed by each Obligor who has
delivered to the Administrative Agent a Guarantee;
(iii) the Dundee Letter of Credit, as extended to January 31,
2005 and as amended to provide that the same shall be
automatically renewed for successive periods of one year
(with the last such period to expire no later than
January 31, 2009) unless notice in writing is given to
the Administrative Agent by The Bank of Nova Scotia as
issuer at least 60 days prior to the then current expiry
date that the issuer has elected not to renew the Dundee
Letter of Credit;
(iv) the Dundee Participation Agreement duly executed by
Dundee;
(v) the Fee Letters;
(vi) a duly certified copy of any amendments to the articles
of incorporation and by-laws of each Obligor, if any,
made subsequent to December 23, 2002;
(vii) a certificate of status or good standing for each
Borrower and Material Subsidiary issued by the
appropriate governmental body or agency of the
jurisdiction in which such Borrower is incorporated;
(viii) a duly certified copy of the resolution of the board of
directors of each Borrower authorizing it to execute,
deliver and perform its obligations under this
Agreement;
(ix) a certificate of an officer of each Borrower setting
forth specimen signatures of the individuals authorized
to sign this Agreement; and
(d) the Administrative Agent and its counsel shall be satisfied that
all Applicable Laws have been complied with, all material
agreements have been entered into and all
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necessary governmental, corporate and other third party consents
and approvals have been obtained with respect to the Loan
Documents and the transactions contemplated herein;
(e) all documents and instruments shall have been properly
registered, recorded and filed in all places which, searches
shall have been conducted in all jurisdictions which, and
deliveries of all consents, approvals, notices, designations,
acknowledgments, undertakings, directions, negotiable documents
of title and other documents and instruments to the
Administrative Agent shall have been made which, in the opinion
of the Administrative Agent's counsel, are necessary to make
effective the Security created or intended to be created by the
Obligors pursuant to the Security Documents and to ensure the
perfection and the intended first ranking priority (subject to
Permitted Liens) of such Security; and
(f) all amounts then due and payable under the Loan Documents shall
have been paid.
Upon satisfaction of each of the foregoing conditions, the Administrative Agent
shall execute and deliver to BRL and its counsel an acknowledgment thereof,
designating the date of such satisfaction as the Amendment Effective Date.
12.03 WAIVER.
The terms and conditions of Sections 12.01 and 12.02 are inserted for the sole
benefit of the Administrative Agent and the Lenders and the Lenders may waive
them in whole or in part in accordance with Section 14.14, with or without terms
or conditions, in respect of any extension of credit, without prejudicing its
right to assert them in whole or in part in respect of any other extension of
credit.
ARTICLE 13
DEFAULT AND REMEDIES
13.01 CREDIT EVENTS.
Each of the following events shall constitute a "CREDIT EVENT" hereunder:
(a) the Borrowers default in payment of any amount of the Secured
Obligations which is payable by the Borrowers when the same is
due and payable, including, without limitation, a failure by BRL
to apply the proceeds of the October Offering as required under
Section 11.01(b);
(b) the commencement by any Obligor of proceedings for the
dissolution, liquidation or winding-up of such Obligor (other
than in circumstances where the transferees of all of its
property and assets are the Borrower and/or a Material
Subsidiary which has complied with Section 11.02(n) )or any such
proceedings are commenced against any Obligor by a third party
and such proceedings commenced by a third party are not being
contested in good faith and by appropriate proceedings or, if so
contested, such proceedings continue, without being stayed, for
more than 10 Banking Days;
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(c) any Obligor ceases or threatens to cease to carry on its
business or is adjudged or declared bankrupt or insolvent or
admits its inability to pay its debts generally as they become
due or fails to pay its debts generally as they become due or
files an assignment or petition in bankruptcy or a petition to
take advantage of any insolvency statute or makes an assignment
for the general benefit of its creditors, petitions or applies
to any tribunal for, or consents to, the appointment of a
receiver or trustee for it or for any part of its property (or
such a receiver or trustee is appointed for it or any part of
its property), or files a notice of intention to file a
proposal, or commences (or any other Person commences) any
proceedings relating to it under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction whether now or hereafter in
effect (provided that, if such proceedings are commenced by
another Person, such proceedings are being diligently defended
and have not been discharged, vacated or stayed within 10
Banking Days after commencement), or by any act indicates its
consent to, approval of, or acquiescence in, any such proceeding
for it or for any part of its property, or suffers the
appointment of any receiver or trustee, sequestrator or other
custodian;
(d) any representation or warranty made by any Obligor in any Loan
Document or in any other document, agreement or instrument
delivered pursuant hereto or referred to herein or any
information contained in any Compliance Certificate proves to
have been incorrect in any material respect when made or
furnished;
(e) a writ, execution, attachment or similar process is issued or
levied against all or any portion of any property or asset of
any Obligor in connection with any judgment against such Obligor
in an amount exceeding $1,000,000 and such writ, execution,
attachment or similar process is not released, bonded,
satisfied, discharged, vacated or stayed;
(f) the breach or failure of due observance or performance by any
Obligor of any covenant or provision of any of the Loan
Documents, other than those heretofore or hereafter dealt with
in this Section 13.01, which is not remedied within 10 Banking
Days after written notice of such breach or failure has been
given by the Administrative Agent to the Borrowers;
(g) one or more encumbrancers, lienors or landlords take possession
of any property, assets or undertaking of any Obligor having a
fair market value in excess of $1,000,000 or enforce their
security or other remedies against any part of the assets,
property and undertaking of any Obligor having a fair market
value in excess of $1,000,000 and such action is not being
contested in good faith and by appropriate proceedings or, if so
contested, such possession or enforcement proceedings continue,
without being discharged, vacated or stayed, for more than 10
Banking Days;
(h) an event of default (after the giving of all applicable notices
or the expiry of all applicable grace periods) under any one or
more agreements, indentures or instruments under which BRL or
any of its subsidiaries (other than Non-Recourse Subsidiaries)
has outstanding Debt in excess of $1,000,000 or under which Debt
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in excess of $1,000,000 is outstanding which is guaranteed by
BRL or any of its subsidiaries (other than Non-Recourse
Subsidiaries) shall happen and be continuing, or Debt of or
guaranteed by BRL or any of its subsidiaries (other than
Non-Recourse Subsidiaries) in excess of $1,000,000 which is
payable on demand is not paid on demand;
(i) an event of default (after the giving of all applicable notices
or the expiry of all applicable grace periods) under (i) a
Related Party Material Agreement having a value in excess of
Cdn.$1,000,000 or the U.S. Dollar Equivalent thereof, or (ii)
any hedging contract having a value, which, in the case of a
hedging contract which has not been terminated as at such time,
shall be equal to the total amount which the relevant Obligor
would be obligated to pay the hedge provider under such hedging
contract in the event of the early termination by such hedge
provider as at such time of such hedging contract as a result of
the occurrence of a default or event of default (however
specified or designated) with respect to the relevant Obligor
thereunder, or, in the case of a hedging contract which has been
terminated as at such time, shall be equal to the total amount
which the relevant Obligor is obligated to pay such hedge
provider under such hedging contract, in excess of Cdn.
$1,000,000 or the U.S. Dollar Equivalent thereof, shall occur
and be continuing;
(j) any property of an Obligor having a fair market value in excess
of Cdn.$500,000 or the U.S. Dollar Equivalent thereof is
expropriated, damaged or destroyed and is not forthwith replaced
or restored with the expropriation proceeds or the insurance
proceeds with respect thereto;
(k) operations are interrupted for a period of more than 30 days at
one or more Mines that in the aggregate account for 35% or more
of the operating cash flow set forth in the OCF Projections;
(l) the operator or owner of any smelter to which an Obligor has
delivered zinc, silver, lead, copper, gold or other minerals
that constitute Secured Assets and have a value in excess of
Cdn.$500,000 (i) asserts a Lien against such Secured Assets for
an amount exceeding Cdn.$500,000 in the aggregate or (ii) ceases
to operate such smelter for thirty consecutive days;
(m) any one or more of the Loan Documents is determined by a court
of competent jurisdiction not to be a legal, valid and binding
obligation of the Obligor which is a party thereto, enforceable
by the Administrative Agent or the Lenders against such Obligor
and such Loan Document has not been replaced by a legal, valid,
binding and enforceable document which is equivalent in effect
to such Loan Document, assuming such Loan Document had
originally been legal, valid, binding and enforceable, in form
and substance acceptable to the Lenders, within 30 days of such
determination, provided, however, that such grace period shall
only be provided if such Obligor actively co-operates with the
Lenders to so replace such Loan Document;
(n) any one or more of the Related Party Material Agreements is
determined by a court of competent jurisdiction not to be a
legal, valid and binding obligation of each of the
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parties thereto, enforceable against such party and such
agreement has not been replaced by a legal, valid, binding and
enforceable document which is equivalent in effect to such
agreement, assuming such agreement had originally been legal,
valid, binding and enforceable, in form and substance acceptable
to the Lenders, within 30 days of such determination, provided,
however, that such grace period shall only be provided if each
such party actively co-operates with the Lenders to so replace
the agreement;
(o) the Security, or any part thereof, ceases at any time after its
execution and delivery to constitute in favour of the Lenders a
first ranking Lien (subject to the Permitted Liens) in all of
the Secured Assets;
(p) any Person or group of Persons acting in concert (other than
Dundee or any affiliate thereof), acquires direct or indirect
beneficial ownership or control of shares of an Obligor having
attached thereto equal to or greater than 30% of the voting
rights attached to all of the shares of such Obligor; or
(q) the Dundee Letter of Credit expires prior to January 31, 2009;
or the Administrative Agent receives notice from the issuer of
the Dundee Letter of Credit that Dundee has requested the issuer
not to renew the Dundee Letter of Credit beyond its then current
expiry date or that the issuer has otherwise elected not to so
renew the Dundee Letter of Credit, unless the Dundee Letter of
Credit has already been extended until January 31, 2009, or
unless prior to the earlier of the receipt of such notice and
such expiry date: (i) Dundee shall have delivered to the
Administrative Agent a letter of credit issued by a Canadian
chartered bank in substitution for and on substantially the same
terms and conditions as the Dundee Letter of Credit and
otherwise in form and substance satisfactory to the
Administrative Agent and the Lenders or (ii) the Administrative
Agent shall have exercised the Put Right under and as defined in
the Dundee Participation Agreement and shall have exercised its
right to draw down under the Letter of Credit.
13.02 EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" under this Agreement means:
(a) the occurrence after the date hereof and prior to January 2,
2004 of any of the Credit Events listed in paragraphs (a), (b),
(c), (e), (g), (h) , (l) and (q)of Section 13.01; and
(b) the occurrence on or after January 2, 2004 of any of the Credit
Events listed in Section 13.01;
and for greater certainty, the occurrence of any Credit Event not listed in
paragraphs (a), (b), (c), (e), (g), (h), (l) and (q) of Section 13.01 shall not
constitute a Default or an Event of Default for any purpose hereunder unless and
until the same occurs on or after January 2, 2004.
13.03 CONSEQUENCES OF THE OCCURRENCE OF EVENTS OF DEFAULT.
Upon the occurrence of one or more Events of Default, unless expressly waived in
writing by the Majority Lenders or cured to the satisfaction of the Majority
Lenders, the Administrative Agent
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(with the approval and instructions of the Majority Lenders) may, by notice to
the Borrowers, terminate the Credit Facilities and the Administrative Agent
(with the approval and instructions of the Majority Lenders) may, by the same
notice or by further notice to the Borrowers, declare all indebtedness of the
Borrowers to the Administrative Agent and the Lenders pursuant to this Agreement
(including the then contingent liability of the Issuing Lender under all
outstanding Letters) and all accrued and unpaid interest and fees hereunder to
be immediately due and payable whereupon all such indebtedness shall immediately
become and be due and payable and the Security shall immediately become
enforceable without further demand or other notice of any kind, all of which are
expressly waived by the Borrowers; provided, however, that the Credit Facilities
shall terminate and all such indebtedness of the Borrowers to the Administrative
Agent and the Lenders shall automatically become due and payable, without notice
of any kind, upon the occurrence of an event described in clause 13.01(b) or
13.01(c) above. Upon the payment by the Borrowers to the Administrative Agent of
the then contingent liability of the Issuing Lender under all outstanding
Letters, the Borrowers shall have no further liability to the Issuing Lender
with respect to such Letters.
13.04 REFUND OF OVERPAYMENTS.
With respect to each Letter for which the Issuing Lender has been paid all of
its contingent liability pursuant to Section 9.05 and provided that all amounts
due by the Borrowers to the Issuing Lender under Section 9.05 have been paid,
the Issuing Lender agrees to pay to the relevant Borrower, upon the earlier of:
(a) the date on which either the original counterpart of such Letter
is returned to the Issuing Lender for cancellation or the
Issuing Lender is released by the beneficiary thereof from any
further obligations in respect of such Letter;
(b) the expiry of such Letter; and
(c) the Issuing Lender is permanently enjoined by a court of
competent jurisdiction from honouring such Letter pursuant to a
final Order;
an amount equal to any excess of the amount received by the Issuing Lender
hereunder in respect of its contingent liability under such Letter over the
total of amounts applied to reimburse the Issuing Lender for amounts paid by it
under or in connection with such Letter (the Issuing Lender having the right to
so appropriate such funds).
13.05 REMEDIES CUMULATIVE.
The Borrowers expressly agree that the rights and remedies of the Administrative
Agent and the Lenders under this Agreement are cumulative and in addition to and
not in substitution for any rights or remedies provided by law. Any single or
partial exercise by the Administrative Agent or any of the Lenders of any right
or remedy for a default or breach of any term, covenant or condition in this
Agreement does not waive, alter, affect or prejudice any other right or remedy
to which the Administrative Agent or such Lender may be lawfully entitled for
the same default or breach. Any waiver by the Administrative Agent or any of the
Lenders of the strict observance, performance or compliance with any term,
covenant or condition of this Agreement is not a waiver of any subsequent
default and any indulgence by the Administrative Agent or any of the Lenders
with
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respect to any failure to strictly observe, perform or comply with any term,
covenant or condition of this Agreement is not a waiver of the entire term,
covenant or condition or any subsequent default.
13.06 SET-OFF.
In addition to any rights now or hereafter granted under applicable law, and not
by way of limitation of any such rights, the Administrative Agent and each
Lender is authorized, after the occurrence of an Event of Default and for so
long as such Event of Default continues and without notice to the Borrowers or
to any other person, any such notice being expressly waived by the Borrowers, to
set-off, appropriate and apply any and all deposits, matured or unmatured,
general or special, and any other indebtedness at any time held by or owing by
the Administrative Agent or such Lender to or for the credit of or the account
of either Borrower against and on account of the obligations and liabilities of
such Borrower which are due and payable to the Administrative Agent or such
Lender under this Agreement.
ARTICLE 14
THE ADMINISTRATIVE AGENT
14.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby appoints and authorizes, and hereby agrees
that it will require any assignee of any of its interests in the Loan Documents
(other than the holder of a participation in its interests herein or therein) to
appoint and authorize the Administrative Agent to take such actions as agent on
its behalf and to exercise such powers under the Loan Documents as are delegated
to the Administrative Agent by such Lender by the terms hereof, together with
such powers as are reasonably incidental thereto. Neither the Administrative
Agent nor any of its directors, officers, employees or agents shall be liable to
any of the Lenders for any action taken or omitted to be taken by it or them
thereunder or in connection therewith, except for its own gross negligence or
wilful misconduct and each Lender hereby acknowledges that the Administrative
Agent is entering into the provisions of this Section 14.01 on its own behalf
and as agent and trustee for its directors, officers, employees and agents.
(b) Without prejudice to the provisions of Sections 14.01(a), each
Lender, the Administrative Agent and the Syndication Agent
hereby designate and appoint the Administrative Agent as the
person holding the power of attorney (the "Fonde de Pouvoir") of
the Lenders, the Administrative Agent and the Syndication Agent
as contemplated under Article 2692 of the CIVIL CODE OF QUEBEC,
to enter into, to take and to hold on their behalf, and for
their benefit, the BRL Deed of Hypothec and to exercise such
powers and duties which are conferred upon the Administrative
Agent thereunder. Any Person who becomes a Lender, an
administrative agent and/or a syndication agent of the Lenders
shall be deemed to have consented to and confirmed the
Administrative Agent as the person holding the Fonde de Pouvoir
as aforesaid and to have ratified as of the date he becomes a
Lender, an administrative agent and/or a syndication agent, as
the case may be, all actions taken by the Administrative Agent
in such capacity. As the person holding the Fonde de Pouvoir,
the Administrative Agent shall be entitled to
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delegate from time to time any of its powers or duties under the
BRL Deed of Hypothec to any Person and on such terms and
conditions as the Administrative Agent may determine from time
to time.
(ii) Without prejudice to the designations and appointment of the
Administrative Agent as the person holding the Fonde de Pouvoir
as aforesaid, each Lender, the Administrative Agent and the
Syndication Agent hereby additionally designate and appoint the
Administrative Agent as agent and custodian for and on behalf of
each of them to hold and to be the sole registered holder of any
bond issued under the BRL Deed of Hypothec, the whole
notwithstanding Section 32 of the SPECIAL CORPORATE POWERS ACT
(Quebec) or any other Applicable Law. In this respect, (i) the
Administrative Agent, as agent and custodian of the Lenders, the
Administrative Agent and the Syndication Agent, shall keep a
record indicating the names and addresses of, and the pro rata
portion of the Secured Obligations secured by the BRL Deed of
Hypothec owing to, the Persons for and on behalf of whom the
aforesaid bond is so held from time to time, and (ii) each
Lender, the Administrative Agent and the Syndication Agent will
be entitled to the benefits of any Secured Assets subject to the
BRL Deed of Hypothec and will participate in the proceeds of
realization of any such Secured Assets, the whole in accordance
with the terms hereof. The Administrative Agent, in such
capacity as agent and custodian shall, (i) have the sole and
exclusive right and authority to exercise, except as may be
otherwise specially restricted by the terms hereof, all rights
and remedies given to the Lenders, the Administrative Agent or
the Syndication Agent with respect to the Secured Assets under
the BRL Deed of Hypothec, Applicable Law or otherwise, and (ii)
benefit from and be subject to all provisions hereof with
respect to the Administrative Agent MUTATIS MUTANDIS, including,
without limitation, all such provisions with respect to the
liability or responsibility to and indemnification by the
Lenders, the Administrative Agent and the Syndication Agent. Any
Person who becomes a Lender, an administrative agent and/or a
syndication agent of the Lenders shall be deemed to have
consented to and confirmed the Administrative Agent as agent and
custodian as aforesaid and to have ratified as of the date he
becomes a Lender, an administrative agent and/or a syndication
agent, as the case may be, all actions taken by the
Administrative Agent in such capacity. As agent and custodian,
the Administrative Agent shall be entitled to delegate from time
to time any of its powers or duties hereunder to any Person and
on such terms and conditions as the Administrative Agent may
determine from time to time.
14.02 INTEREST HOLDERS.
The Administrative Agent may treat each Lender set forth in Schedule A hereto or
the person designated in the last instrument delivered to it under Section 15.06
as the holder of all of the interests of such Lender under the Loan Documents.
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14.03 CONSULTATION WITH COUNSEL.
The Administrative Agent may consult with legal counsel selected by it as
counsel for the Administrative Agent and the Lenders and shall not be liable to
the Lenders for any action taken or not taken or suffered by it in good faith
and in accordance with the advice and opinion of such counsel.
14.04 DOCUMENTS.
The Administrative Agent shall not be under any duty to the Lenders to examine,
enquire into or pass upon the validity, effectiveness or genuineness of the Loan
Documents or any instrument, document or communication furnished pursuant to or
in connection with the Loan Documents and the Administrative Agent shall, as
regards the Lenders, be entitled to assume that the same are valid, effective
and genuine, have been signed or sent by the proper parties and are what they
purport to be.
14.05 ADMINISTRATIVE AGENT AS LENDER.
With respect to those portions of the Credit Facilities made available by it,
the Administrative Agent shall have the same rights and powers under the Loan
Documents as any other Lender and may exercise the same as though it were not
the Administrative Agent. The Administrative Agent and its affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
or in competition with any Obligor and/or any of its affiliates and persons
doing business with any Obligor and/or any of its affiliates as if it were not
the Administrative Agent and without any obligation to account to the Lenders or
the Borrowers therefor.
14.06 RESPONSIBILITY OF ADMINISTRATIVE AGENT.
The duties and obligations of the Administrative Agent to the Lenders under the
Loan Documents are only those expressly set forth herein. The Administrative
Agent shall not have any duty to the Lenders to investigate whether a Default or
an Event of Default has occurred. The Administrative Agent shall, as regards the
Lenders, be entitled to assume that no Default or Event of Default has occurred
and is continuing unless the Administrative Agent has actual knowledge or has
been notified by the Borrowers of such fact or has been notified by a Lender
that such Lender considers that a Default or Event of Default has occurred and
is continuing, such notification to specify in detail the nature thereof.
14.07 ACTION BY ADMINISTRATIVE AGENT.
The Administrative Agent shall be entitled to use its discretion with respect to
exercising or refraining from exercising any rights which may be vested in it on
behalf of the Lenders by and under this Agreement or any other Loan Document;
provided, however, that the Administrative Agent shall not exercise any rights
under Section 13.01 or under the Loan Documents expressed to be on behalf of or
with the approval of the Majority Lenders without the request, consent or
instructions of the Majority Lenders. Furthermore, any rights of the
Administrative Agent expressed to be on behalf of or with the approval of the
Majority Lenders shall be exercised by the Administrative Agent upon the request
or instructions of the Majority Lenders. The Administrative Agent shall not
incur any liability to the Lenders under or in respect of any of the Loan
Documents with respect to anything which it may do or refrain from doing in the
reasonable exercise of its judgment or which may seem to it to be necessary or
desirable in the circumstances, except for its
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gross negligence or wilful misconduct. The Administrative Agent shall in all
cases be fully protected in acting or refraining from acting under any of the
Loan Documents in accordance with the instructions of the Majority Lenders and
any action taken or failure to act pursuant to such instructions shall be
binding on all Lenders. In respect of any notice by or action taken by the
Administrative Agent hereunder, the Borrowers shall at no time be obliged to
enquire as to the right or authority of the Administrative Agent to so notify or
act.
14.08 NOTICE OF EVENTS OF DEFAULT.
In the event that the Administrative Agent shall acquire actual knowledge or
shall have been notified of any Default or Event of Default, the Administrative
Agent shall promptly notify the Lenders and shall take such action and assert
such rights under Section 13.01 of this Agreement and under the other Loan
Documents as the Majority Lenders shall request in writing and the
Administrative Agent shall not be subject to any liability by reason of its
acting pursuant to any such request. If the Majority Lenders shall fail for five
Banking Days after receipt of the notice of any Default or Event of Default to
request the Administrative Agent to take such action or to assert such rights
under any of the Loan Documents in respect of such Default or Event of Default,
the Administrative Agent may, but shall not be required to, and subject to
subsequent specific instructions from the Majority Lenders, take such action or
assert such rights (other than rights under Section 13.01 of this Agreement or
under the other Loan Documents and other than giving an express waiver of any
Default or any Event of Default) as it deems in its discretion to be advisable
for the protection of the Lenders except that, if the Majority Lenders have
instructed the Administrative Agent not to take such action or assert such
rights, in no event shall the Administrative Agent act contrary to such
instructions unless required by law to do so.
14.09 RESPONSIBILITY DISCLAIMED.
The Administrative Agent shall be under no liability or responsibility
whatsoever as agent hereunder or under any of the other Loan Documents:
(a) to the Borrowers or any other Person as a consequence of any
failure or delay in the performance by, or any breach by, any
Lender or Lenders of any of its or their obligations under any
of the Loan Documents;
(b) to any Lender or Lenders as a consequence of any failure or
delay in performance by, or any breach by, the Borrowers or any
other Person of any of their or its obligations under any of the
Loan Documents; or
(c) to any Lender or Lenders for any statements, representations or
warranties in any of the Loan Documents or in any other
documents contemplated hereby or thereby or in any other
information provided pursuant to any of the Loan Documents or
any other documents contemplated hereby or thereby or for the
validity, effectiveness, enforceability or sufficiency of any of
the Loan Documents or any other document contemplated hereby or
thereby.
14.10 INDEMNIFICATION.
The Lenders agree to indemnify the Administrative Agent and its shareholders,
officers, directors, employees and agents (to the extent not reimbursed by the
Borrowers) pro rata according to the Pro
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Rata Share of each of them from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any nature whatsoever which may be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of any of the Loan Documents or any other document contemplated
hereby or thereby or any action taken or omitted by the Administrative Agent
under any of the Loan Documents or any document contemplated hereby or thereby,
except that no Lender shall be liable to the Administrative Agent for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or wilful misconduct of the Administrative Agent.
14.11 CREDIT DECISION.
Each Lender represents and warrants to the Administrative Agent that:
(a) in making its decision to enter into this Agreement and to make
its Pro Rata Share of the Credit Facilities available to the
Borrowers, it is independently taking whatever steps it
considers necessary to evaluate the financial condition and
affairs of the Borrowers and that it has made an independent
credit judgment without reliance upon any information furnished
by the Administrative Agent; and
(b) so long as any portion of the Credit Facilities are being
utilized by either Borrower, it will continue to make its own
independent evaluation of the financial condition and affairs of
the Borrower.
14.12 SUCCESSOR ADMINISTRATIVE AGENT.
Subject to the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may, with the prior written consent of
the Borrowers, resign at any time by giving 30 days written notice thereof to
the Lenders. Upon any such resignation, the Majority Lenders, with the prior
written consent of the Borrowers, shall have the right to appoint a successor
Administrative Agent who shall be one of the Lenders unless none of the Lenders
wishes to accept such appointment. If no successor Administrative Agent shall
have been so appointed and shall have accepted such appointment by the time of
such resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and with the prior written consent of the Borrowers, appoint a successor
Administrative Agent which shall be a bank organized under the laws of Canada
which has combined capital and reserves in excess of Cdn. $250,000,000 and has
an office in Toronto. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges, duties and obligations of the retiring
Administrative Agent (in its capacity as Administrative Agent but not in its
capacity as a Lender) and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder (in its capacity as Administrative
Agent but not in its capacity as a Lender). After any retiring Administrative
Agent's resignation or removal hereunder as the Administrative Agent, provisions
of this Article 14 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the
Administrative Agent.
14.13 DELEGATION BY ADMINISTRATIVE AGENT.
With the prior approval of the Majority Lenders, the Administrative Agent shall
have the right to delegate any of its duties or obligations hereunder as
Administrative Agent to any affiliate of the Administrative Agent so long as the
Administrative Agent shall not thereby be relieved of such duties or
obligations.
14.14 WAIVERS AND AMENDMENTS.
(a) Subject to Sections 14.14(b) and (c), any term, covenant or
condition of any of the Loan Documents may only be amended with the consent of
the Borrowers and the Majority Lenders or compliance therewith may be waived
(either generally or in a particular instance and either retroactively or
prospectively) by the Majority Lenders and in any such event the failure to
observe, perform or discharge any such covenant, condition or obligation, so
amended or waived (whether such amendment is executed or such consent or waiver
is given before or after such failure), shall not be construed as a breach of
such covenant, condition or obligation or as a Default or Event of Default. Any
indulgence by the Lenders or the Majority Lenders with respect to any failure to
strictly observe, perform or comply with any term, covenant or condition of any
Loan Document is not a waiver of the entire term, covenant or condition or any
subsequent default.
(b) Notwithstanding Section 14.14(a), without the prior written
consent of each Lender, no such amendment or waiver shall directly:
(i) increase the amount of any Credit Facility or the amount
of the Individual Commitment of any Lender with respect
to any Credit Facility;
(ii) alter the terms of Section 2.05 or Article 9;
(iii) extend the time for the payment of the interest or
principal on any Loans, forgive any portion of interest
or principal thereof; reduce the stated rate of interest
thereon or amend the requirement of pro rata application
of amounts received by the Administrative Agent in
respect of each Credit Facility;
(iv) consent to any assignment by either Borrower of the Loan
Documents or the benefit thereof;
(v) change the percentage of the Lenders' required to
constitute the Majority Lenders or otherwise amend the
definition of Majority Lenders;
(vi) extend the time for the payment of or reduce the stated
amount of any fees to be paid pursuant to Article 7 of
this Agreement with respect to the Credit Facilities;
(vii) permit any subordination of the Secured Obligations
except as provided in Section 14.22;
(viii) release, discharge or amend any of the Guarantees or the
Security Documents, in whole or in part; or
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(ix) alter the terms of this Section 14.14.
(c) Without the prior written consent of the Administrative Agent,
no amendment to or waiver of Article 14 or any other provision hereof to the
extent it affects the rights or obligations of the Administrative Agent shall be
effective.
(d) Without the prior written consent of the Issuing Lender, no
amendment to or waiver of Article 14 or any other provision hereof to the extent
it affects the rights or obligations of the Issuing Lender shall be effective.
(e) Notwithstanding Section 14.14(a) or any other provision of this
Agreement, the Lenders acknowledge and agree that without the prior written
consent of Dundee, no further amendment or waiver of Sections 2.04, 9.02,
9.03(b), 9.03(c), 9.04 or 14.22 shall be effective.
14.15 DETERMINATION BY ADMINISTRATIVE AGENT CONCLUSIVE AND BINDING.
Any determination to be made by the Administrative Agent on behalf of or with
the approval of the Lenders or the Majority Lenders under this Agreement shall
be made by the Administrative Agent in good faith and, if so made, shall be
binding on all parties, absent manifest error.
14.16 ADJUSTMENTS AMONG LENDERS AFTER ACCELERATION.
(a) The Lenders agree that, at any time after all indebtedness of
the Borrowers to the Lenders and the Administrative Agent pursuant hereto has
become immediately due and payable pursuant to Section 13.01 or after the
cancellation or termination of the Credit Facilities, they will at any time or
from time to time upon the request of any Lender through the Administrative
Agent purchase portions of the availments made available by the other Lenders
which remain outstanding, and make any other adjustments which may be necessary
or appropriate, in order that the amounts of the availments made available by
the respective Lenders which remain outstanding, as adjusted pursuant to this
Section 14.16, will be in the same proportions as their respective Pro Rata
Shares thereof immediately prior to such acceleration, cancellation or
termination.
(b) The Lenders agree that, at any time after all indebtedness of
the Borrowers to the Lenders and the Administrative Agent pursuant hereto has
become immediately due and payable pursuant to Section 13.03 or after the
cancellation or termination of the Credit Facilities, the amount of any
repayment made by the Borrowers under this Agreement, and the amount of any
proceeds of the exercise of any rights or remedies of the Lenders under the Loan
Documents, which are to be applied against amounts owing hereunder as principal,
will be so applied in a manner such that to the extent possible, the availments
made available by the respective Lenders which remain outstanding, after giving
effect to such application, will be in the same proportions as their respective
Pro Rata Shares thereof immediately prior to the cancellation or termination
thereof immediately prior to such acceleration, cancellation or termination.
(c) For greater certainty, the Lenders acknowledge and agree that
without limiting the generality of the provisions of Sections 14.16(a) and (b),
such provisions will have application if and whenever any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off; compensation, or otherwise) on account of any monies owing or
payable by the Borrowers to it hereunder in excess of its pro rata share of
payments on account of monies owing by the Borrowers to all the Lenders
hereunder.
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(d) The Borrowers agree to be bound by and to do all things
necessary or appropriate to give effect to any and all purchases and other
adjustments made by and between the Lenders pursuant to this Section 14.16.
14.17 REDISTRIBUTION OF PAYMENT.
If a Lender shall receive payment of a portion of the aggregate amount of
principal and interest due to it hereunder which is greater than the proportion
received by any other Lender in respect of the aggregate amount of principal and
interest due in respect of the Credit Facilities (having regard to the
respective Individual Commitments of the Lenders), the Lender receiving such
proportionately greater payment shall purchase a participation (which shall be
deemed to have been done simultaneously with receipt of such payment) in that
portion of the aggregate outstanding credit of the other Lender or Lenders so
that the respective receipts shall be pro rata to their respective participation
in the credits; provided, however, that if all or part of such proportionately
greater payment received by such purchasing Lender shall be recovered from the
Borrowers, such purchase shall be rescinded and the purchase price paid for such
participation shall be returned by such selling Lender or Lenders to the extent
of such recovery, but without interest.
14.18 DISTRIBUTION OF NOTICES.
With respect to each notice which is delivered to the Administrative Agent
hereunder on behalf of certain of or all of the Lenders, the Administrative
Agent shall provide a copy of such notice to each of such Lenders on the date it
is received by the Administrative Agent if such date is a Banking Day and it is
received by the Administrative Agent prior to noon (Toronto time) on such date;
otherwise, the Administrative Agent shall provide a copy of such notice to each
of such Lenders within one Banking Day of receipt by the Administrative Agent.
With respect to each other document which is delivered to the Administrative
Agent hereunder on behalf of certain of or all of the Lenders, the
Administrative Agent shall provide a copy of such document to each of such
Lenders within one Banking Day of receipt by the Administrative Agent. For
greater certainty, the Administrative Agent shall deliver to Societe Generale
(New York) the Borrowing Base worksheets described in Section 11.02(b)(iv) on
the date it is received by the Administrative Agent if such date is a Banking
Day and it is received by the Administrative Agent prior to noon (Toronto time)
on such date; otherwise, the Administrative Agent shall provide a copy of such
Borrowing Base worksheets to Societe Generale (New York) within one Banking Day
of receipt by the Administrative Agent.
14.19 DETERMINATION OF EXPOSURES.
Prior to any distribution of Cash Proceeds of Realization to the Lenders, the
Administrative Agent shall request each Lender to provide to the Administrative
Agent a written calculation of such Lender's Exposure, each such calculation to
be certified true and correct by the Lender providing same. Each Lender shall so
provide such calculation within 2 Banking Days following the request of the
Administrative Agent. Any such calculation provided by a particular Lender which
is approved by the Administrative Agent shall, absent manifest error, constitute
prima facie evidence of such Lender's Exposure at such time. If the
Administrative Agent does not approve any such calculation provided by a
particular Lender, the Administrative Agent and such Lender shall, expeditiously
and in good faith, make a determination of such Lender's Exposure which the
Administrative Agent approves. With respect to each determination of the
Exposure of the Lenders, the Administrative
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Agent shall promptly notify the Lenders. For the purposes of determining a
particular Lender's Exposure at any particular time:
(a) the Exposure of a Lender under this Agreement and the Security
Documents shall be the aggregate amount (expressed in United
States dollars) of the Individual Commitments of such Lender at
such time;
(b) the Exposure of a Lender under a commodity price hedging
contract shall be the Commodity Hedging Exposure of such Lender
less such Lender's pro-rata share of Cash Collateral (such
pro-rata share being determined on the basis of all Lenders with
any Commodity Hedging Exposure) at such time;
(c) the Exposure of a Lender (expressed in United States dollars)
under an interest rate swap agreement which, in the case of an
interest rate swap agreement which has not been terminated as at
such time, shall be equal to the total amount which the relevant
Obligor would be obligated to pay to such Lender under such
interest rate swap agreement in the event of the early
termination by such Lender as at such time of such interest rate
swap agreement as a result of the occurrence of a default or
event of default (however specified or designated) with respect
to the relevant Obligor thereunder or, in the case of an
interest rate swap agreement which has been terminated as at
such time, shall be equal to the total amount which the relevant
Obligor is obligated to pay to such Lender under such interest
rate swap agreement;
(d) the Exposure of a Lender (expressed in United States dollars)
under a foreign exchange contract which, in the case of a
foreign exchange contract which has not been terminated as at
such time, shall be equal to the total amount which the relevant
Obligor would be obligated to pay to such Lender under such
contract in the event of the early termination by such Lender as
at such time of such contract as a result of the occurrence of a
default or event of default (however specified or designated)
with respect to the relevant Obligor thereunder or, in the case
of a foreign exchange contract which has been terminated as at
such time, shall be equal to the total amount which the relevant
Obligor is obligated to pay to such Lender under such contract;
and
(e) the Exposure of a Lender in respect of a cash management
agreement shall be the amount (expressed in United States
dollars) which would be owing by the relevant Borrower
thereunder at such time if such agreement was terminated.
14.20 DECISION TO ENFORCE SECURITY.
Upon the Security becoming enforceable in accordance with its terms, the
Administrative Agent shall promptly so notify each of the Lenders. Any Lender
may thereafter provide the Administrative Agent with a written request to
enforce the Security. Forthwith after the receipt of such a request, the
Administrative Agent shall seek the instructions of the Majority Lenders as to
whether the Security should be enforced and the manner in which the Security
should be enforced. In seeking such instructions, the Administrative Agent shall
submit a specific proposal to the Lenders. The Administrative Agent shall
promptly notify the Lenders of all instructions and approvals of the Majority
Lenders.
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14.21 ENFORCEMENT.
The Administrative Agent shall have the sole right to enforce, or otherwise deal
with, the Security and to deal with the Obligors in connection therewith;
provided, however, that the Administrative Agent shall so enforce, or otherwise
deal with, the Security as the Majority Lenders shall instruct.
14.22 APPLICATION OF CASH PROCEEDS OF REALIZATION.
(a) All Proceeds of Realization not in the form of cash shall be
forthwith delivered to the Administrative Agent and disposed of, or realized
upon, by the Administrative Agent in such manner as the Majority Lenders may
approve so as to produce Cash Proceeds of Realization.
(b) Subject to the claims, if any, of secured creditors of the
Obligors whose security ranks in priority to the Security, all Cash Proceeds of
Realization shall be applied and distributed, and the claims of the Lenders and
the Administrative Agent shall be deemed to have the relative priorities which
would result in such Cash Proceeds of Realization being applied and distributed,
as follows:
(i) firstly, to the payment of all reasonable costs and
expenses incurred by the Administrative Agent
(including, without limitation, all legal fees and
disbursements) in the exercise of all or any of the
powers granted to it hereunder or under the Security
Documents and Guarantees with respect to any realization
against the Secured Assets and in payment of all of the
remuneration of any Receiver and all costs and expenses
properly incurred by such Receiver (including, without
limitation, all legal fees and disbursements) in the
exercise of all or any powers granted to it under the
Security Documents with respect to any realization
against the Secured Assets;
(ii) secondly, in payment of all amounts of money borrowed or
advanced by the Administrative Agent or such Receiver
pursuant to the Security Documents with respect to any
realization against the Secured Assets and any interest
thereon;
(iii) thirdly, to the payment to the Lenders pro rata in
accordance with their relative Exposures, in the
following order, of:
(A) amounts due hereunder as fees; and
(B) amounts due hereunder as costs and expenses;
(iv) subject to Section 14.16(b), the remaining Cash Proceeds
of Realization that constitute Current Assets Proceeds
shall be applied in payment or prepayment of the
following Secured Obligations (including holding as cash
collateral to be applied against such Secured
Obligations which have not then matured) in the
following order:
(A) to the Lenders, pro rata in accordance with
their relative Exposures, to amounts due under
the Revolving Facility, in the following order:
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i. as default interest;
ii. as interest; and
iii. as principal;
(B) to the Lenders, pro rata in accordance with
their relative Exposures, to amounts due under
both the Non-Revolving Facility and the
Supplemental Term Facility on a pro rata and
pari passu basis, in the following order:
i. as default interest;
ii. as interest;
iii. as principal;
(C) to amounts due with respect to Hedging
Obligations; and
(v) subject to Section 14.16(b), the remaining Cash Proceeds
of Realization that constitute Fixed Assets Proceeds
shall be applied in payment or prepayment of the
following Secured Obligations (including holding as cash
collateral to be applied against such Secured
Obligations which have not then matured) in the
following order:
(A) to the Lenders, pro rata in accordance with
their relative Exposures, to amounts due under
both the Non-Revolving Facility and the
Supplemental Term Facility on a pro rata and
pari passu basis, in the following order:
i. as default interest;
ii. as interest;
iii. as principal;
(B) to the Lenders, pro rata in accordance with
their relative Exposures, to amounts due under
the Revolving Facility, in the following order:
i. as default interest;
ii. as interest; and
iii. as principal;
(vi) the balance, if any, of such Cash Proceeds of
Realization, to the Obligors or otherwise in accordance
with applicable law.
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14.23 ENTERING INTO CONTRACTS.
The Administrative Agent may enter into any Security Document as agent for and
on behalf of the Lenders.
14.24 OTHER SECURITY NOT PERMITTED.
None of the Lenders shall be entitled to enjoy any Lien with respect to any of
the assets of any of the Obligors other than the Security.
ARTICLE 15
MISCELLANEOUS
15.01 WAIVERS.
No failure or delay by the Administrative Agent, the Lenders or the Majority
Lenders in exercising any remedy, right or power hereunder or otherwise shall
operate as a waiver thereof, except a waiver which is specifically given in
writing by the Administrative Agent, and no single or partial exercise of any
power, right or privilege hereunder will preclude any other or further exercise
thereof or the exercise of any other power, right or privilege.
15.02 NOTICES.
All notices, demands and other communications provided for in this Agreement
shall be in writing and shall be personally delivered to an officer or other
responsible employee of the addressee or sent by telefacsimile, charges prepaid,
at or to the applicable addresses or telefacsimile numbers, as the case may be,
set opposite the party's name on the signature page hereof (in the case of the
Borrower or the Administrative Agent) or set forth in Schedule A hereto (in the
case of the Lenders) or at or to such other address or addresses or
telefacsimile number or numbers as any party hereto may from time to time
designate to the other parties in such manner. Any communication which is
personally delivered as aforesaid shall be deemed to have been validly and
effectively given on the date of such delivery if such date is a Banking Day and
such delivery was made during normal business hours of the recipient; otherwise,
it shall be deemed to have been validly and effectively given on the Banking Day
next following such date of delivery. Any communication which is transmitted by
telefacsimile as aforesaid shall be deemed to have been validly and effectively
given on the date of transmission if such date is a Banking Day and such
transmission was made during normal business hours of the recipient; otherwise,
it shall be deemed to have been validly and effectively given on the Banking Day
next following such date of transmission.
15.03 SEVERABILITY.
Any provision hereof which is prohibited or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.
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15.04 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original and all of which taken together shall be deemed to
constitute one and the same instrument.
15.05 SUCCESSORS AND ASSIGNS.
This Agreement shall enure to the benefit of and shall be binding upon the
parties hereto and their respective successors and permitted assigns.
15.06 ASSIGNMENT.
(a) Neither the Loan Documents nor the benefit thereof may be
assigned by either Borrower.
(b) A Lender may at any time sell to one or more other persons
("Participants") participating interests in any credit outstanding hereunder,
the commitment of the Lender hereunder or any other interest of the Lender under
the Loan Documents provided such sale of a participating interest would not
cause the Borrowers to incur additional costs (including, without limitation,
any additional costs pursuant to Article 8). In the event of any such sale by
the Lender of a participating interest to a Participant, the Lender's
obligations under this Agreement to the Borrowers shall remain unchanged, the
Lender shall remain solely responsible for the performance thereof and the
Borrowers shall continue to be obligated to the Lender in connection with the
Lender's rights under this Agreement. The Borrowers agree that each Participant
shall be entitled to the benefits of Article 8 with respect to its participation
hereunder; provided, that no Participant shall be entitled to receive any
greater amount pursuant to such Article than the Lender would have been entitled
to receive in respect of the amount of the participation transferred by the
Lender to such Participant had no such transfer occurred.
(c) With (i) the prior written consent of the Issuing Lender (which
consent shall not be required for so long as an Event of Default has occurred
and is continuing if no Letters are outstanding at the time of the relevant
assignment), and (ii) the prior written consent of the Administrative Agent,
which consent shall not be required if such assignment is to one or more Lenders
or to an affiliate or subsidiary of any of the Lenders, a Lender may at any time
sell all or any part of its rights and obligations under the Loan Documents to
one or more Persons ("Purchasing Lenders"). A Purchasing Lender shall not be a
non-resident of Canada for the purposes of the INCOME TAX ACT (Canada) unless
such Purchasing Lender has waived its rights to the benefit of Section 8.06 and
such waiver is otherwise in form and substance satisfactory to the Borrowers.
Upon such sale, the Lender shall, to the extent of such sale, be released from
its obligations under the Loan Documents and each of the Purchasing Lenders
shall become a party to the Loan Documents to the extent of the interest so
purchased. Any such assignment by a Lender shall not be effective unless and
until the Purchasing Lender assumes an equal percentage of such Lender's Pro
Rata Share of such Lender's Individual Commitment under the Revolving Facility
and the Non-Revolving Facility, unless and until any such assignment is for a
minimum amount of $10,000,000, unless and until such Lender has paid to the
Administrative Agent an assignment fee in the amount of $3,500 for each
Purchasing Lender (unless the payment of such fee has been waived by the
Administrative Agent), unless and until the assignee has executed an instrument
substantially in the form of
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Schedule C hereto or otherwise in a form acceptable to such Lender, the
Purchasing Lender and the Administrative Agent whereby such assignee has agreed
to be bound by the terms of the Loan Documents as a Lender and has agreed to a
specific Individual Commitment and a specific address and telefacsimile number
for the purpose of notices as provided in Section 15.02 and unless and until a
copy of a fully executed copy of such instrument has been acknowledged by the
Administrative Agent. Upon any such assignment becoming effective, Schedule A
hereto shall be deemed to be amended to include the assignee as a Lender with
the specific Individual Commitment, address and telefacsimile number as
aforesaid and the Individual Commitment of the Lender making such assignment
shall be deemed to be reduced by the amount of the Individual Commitment of the
assignee.
(d) The Borrowers authorize the Administrative Agent and the Lenders
to disclose to any Participant or Purchasing Lender (each, a "Transferee") and
any prospective Transferee any and all financial information in its possession
concerning the Borrowers and their respective subsidiaries which has been
delivered to them by or on behalf of the Borrowers pursuant to this Agreement or
which has been delivered to them by or on behalf of the Borrowers in connection
with their credit evaluation of the Borrowers prior to entering into this
Agreement, so long as any such Transferee or prospective Transferee agrees not
to disclose any confidential, non-public information to any person other than
its non-brokerage affiliates, employees, accountants or legal counsel, unless
required by law and after prior notice to the Borrowers.
15.07 ENTIRE AGREEMENT.
The Loan Documents (other than the agreements referred to therein and delivered
pursuant thereto) constitute the entire agreement between the parties hereto and
supersede any prior agreements, commitment letters, undertakings, declarations,
representations and understandings, both written and verbal, in respect of the
subject matter hereof.
15.08 FURTHER ASSURANCES.
The Borrowers shall from time to time and at all times hereafter, upon every
reasonable request of the Administrative Agent, make, do, execute, and deliver
or cause to be made, done, executed and delivered all such further acts, deeds,
assurances and things as may be necessary in the opinion of the Administrative
Agent for more effectually implementing and carrying out the true intent and
meaning of this Agreement, the other Loan Documents or any agreement delivered
pursuant hereto or thereto and all such additional security instruments and
agreements and legal opinions in connection with the property and assets of the
Obligors, in form and substance satisfactory to the Administrative Agent, as the
Administrative Agent may from time to time reasonably request to ensure that the
Secured Assets are subject to a first-ranking security interest (subject to
Permitted Liens) in favour of the Lenders.
15.09 JUDGMENT CURRENCY.
(a) If, for the purpose of obtaining or enforcing judgment against
either Borrower in any court in any jurisdiction, it becomes necessary to
convert into a particular currency (such currency being hereinafter in this
Section 15.09 referred to as the "Judgment Currency") an amount due in another
currency (such other currency being hereinafter in this Section 15.09 referred
to as the
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"Indebtedness Currency") under this Agreement, the conversion shall be made at
the rate of exchange prevailing on the Banking Day immediately preceding:
(i) the date of actual payment of the amount due, in the
case of any proceeding in the courts of the Province of
Ontario or in the courts of any other jurisdiction that
will give effect to such conversion being made on such
date; or
(ii) the date on which the judgment is given, in the case of
any proceeding in the courts of any other jurisdiction
(the date as of which such conversion is made pursuant
to this Section 15.09(a)(ii) being hereinafter in this
Section 15.09 referred to as the "Judgment Conversion
Date").
(b) If, in the case of any proceeding in the court of any
jurisdiction referred to in Section 15.09(a)(ii), there is a change in the rate
of exchange prevailing between the Judgment Conversion Date and the date of
actual payment of the amount due, the Borrowers shall pay to the Lenders such
additional amount (if any, but in any event not a lesser amount) as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Indebtedness Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
order at the rate of exchange prevailing on the Judgment Conversion Date.
(c) Any amount due from the Borrowers under the provisions of
Section 15.09(b) shall be due to the judgment creditor as a separate debt and
shall not be affected by judgment being obtained for any other amounts due under
or in respect of this Agreement.
(d) The term "rate of exchange" in this Section 15.09 means the noon
spot rate of exchange for Canadian interbank transactions applied in converting
the Indebtedness Currency into the Judgment Currency published by the Bank of
Canada for the day in question.
*********
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IN WITNESS WHEREOF the parties hereto have executed this Agreement.
THE BANK OF NOVA SCOTIA THE BANK OF NOVA SCOTIA, as
Global Risk Management ADMINISTRATIVE AGENT AND DOCUMENTATION AGENT
Special Accounts Management-Canada
Scotia Plaza By:_____________________________________
00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx Name:
Xxxxxxx, Xxxxxxx X0X 0X0 Title:
Attention: Assistant General Manager By:_____________________________________
Telecopier No.: (000) 000-0000 Name:
Telephone No.: (000) 000-0000 Title:
THE BANK OF NOVA SCOTIA THE BANK OF NOVA SCOTIA, AS
Global Risk Management LENDER
Special Accounts Management-Canada
Scotia Plaza By:_____________________________________
00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx Name:
Xxxxxxx, Xxxxxxx X0X 0X0 Title:
Attention: Assistant General Manager By:_____________________________________
Telecopier No.: (000) 000-0000 Name:
Telephone No.: (000) 000-0000 Title:
SOCIETE GENERALE (NEW YORK) SOCIETE GENERALE (NEW YORK), AS SYNDICATION AGENT
0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx By: /s/ Xxxxxxxx Xxxxxxxx
New York, New York -------------------------------------
10020 Name: Xxxxxxxx Xxxxxxxx
Title: Director
Attention: Xxxxxxxx Lemesle By: /s/ Xxxxx X. Xxxxxxxx
Telecopier No.: (000) 000-0000 -------------------------------------
Telephone No.: (000) 000-0000 Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
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SOCIETE GENERALE (CANADA) SOCIETE GENERALE (CANADA), as
0000 XxXxxx Xxxxxxx Xxxxxx, Xxxxx 0000 Lender
Xxxxxxxx, Xxxxxx
X0X 0X0 By: /s/ Xxxxxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxxxxxx
Attention: Xxxxxxxx Xxxxxxxxx Title: Managing Director Risk
Vice President, Corporate
and Investment Banking By: /s/ Xxxxxxx Xxxxxx
Telecopier No.: (000) 000-0000 -------------------------------------
Telephone No.: (000) 000-0000 Name: Xxxxxxx Xxxxxx
Title: Director, Legal Affairs
Assistant Secretary
NATIONAL BANK OF CANADA NATIONAL BANK OF CANADA
9th Floor, National Tower
000 xxx xx xx Xxxxxxxxxxx Xxxxx By: /s/ Xxxxxx Xxxxxx
Xxxxxxxx, XX X0X 0X0 -------------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Manager
Attention: Xxxxxx Xxxxxx
Senior Manager By: /s/ Xxxxx Xxxxxx
Telecopier No.: (000) 000-0000 -------------------------------------
Telephone No.: (000) 000-0000 Name: Xxxxx Xxxxxx
Title: Senior Manager
BREAKWATER RESOURCES LTD. BREAKWATER RESOURCES LTD.
00 Xxxxxxxxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx By: /s/ Xxxxx X. Xxxxxx
M5J 2N7 -------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President & CEO
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000 By: /s/ Xxxx X. Xxxxxxxx c.s
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Executive V.P. & CFO
CANZINCO LTD. CANZINCO LTD.
000 Xxxxxxx Xxxxxx
0xx Xxxxx By: /s/ Xxxxx X. Xxxxxx
Xxxxxxxx, Xxx Xxxxxxxxx -------------------------------------
X0X 0X0 Name: Xxxxx X. Xxxxxx
Title: President & CEO
Attention: Chief Financial Officer By: /s/ Xxxx X. Xxxxxxxx c.s.
Telecopier No.: (000) 000-0000 -------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Executive V.P. & CFO
EXECUTION COPY
SCHEDULE A
INDIVIDUAL COMMITMENTS
NAME AND ADDRESS OF LENDER INDIVIDUAL COMMITMENT
The Bank of Nova Scotia Revolving Facility:
Global Risk Management Commitment No. 1 - $6,250,000
Special Accounts Management-Canada Commitment No. 2 - $6,250,000
00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0 Non-Revolving Facility:
Commitment No. 1 - $2,203,875
Attention: Assistant General Manager Commitment No. 2 - $2,203,875
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000 Supplemental Term Facility:
Commitment No. 1 -$812,500
Commitment No. 2 -$812,500
SOCIETE GENERALE (CANADA) Revolving Facility: $6,250,000
000 Xxxxx Xxxxxx Non-Revolving Facility: $2,203,875
Xxxxx 0000
Xxxxxxx, Xxxxxxx Supplemental Term Facility: -$812,500
M5C 2W1
Attention: Xxxxxxxx Xxxxxxxxx
Vice-President, Corporate
and Investment Banking
Telecopier No.: (000) 000-0000
NATIONAL BANK OF CANADA Revolving Facility: $6,250,000
9th Floor, National Tower Non-Revolving Facility: $2,203,875
000 xxx xx xx Xxxxxxxxxxx Xxxxx
Xxxxxxxx, XX X0X 0X0
Supplemental Term Facility: -$812,500
Attention: Xxxxxx Xxxxxx
Senior Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
A - 1
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SCHEDULE B
COMPLIANCE CERTIFICATE
TO: THE BANK OF NOVA SCOTIA, in its capacity as administrative agent of the
Lenders (the "Administrative Agent")
AND TO: The Lenders
1. Reference is made to the third further amended and restated credit
agreement made as of November 25, 2003 between Breakwater Resources Ltd. and
CanZinco Ltd. (the "Borrowers"), The Bank of Nova Scotia, Societe Generale
(Canada) and the other financial institutions party thereto in their capacity as
Lenders, the Administrative Agent and the Syndication Agent, relating to the
establishment of term credit facilities in favour of the Borrowers (as amended,
modified, supplemented or restated, the "Credit Agreement"). Capitalized terms
used herein, and not otherwise defined herein, have the meanings attributed to
such terms in the Credit Agreement.
2. This Compliance Certificate is delivered pursuant to Section
11.02(b)(iii) of the Credit Agreement.
3. The undersigned, [name], [title] of Breakwater Resources Ltd., hereby
certifies that, as of the date of this Compliance Certificate, I have made or
caused to be made such investigations as are necessary or appropriate for the
purposes of this Compliance Certificate and:
(a) the consolidated, unconsolidated and consolidating financial
statements for the [Fiscal Quarter OR Fiscal Year] ending o, o,
provided herewith pursuant to Section 11.02(b) of the Credit
Agreement were prepared in accordance with Generally Accepted
Accounting Principles and present fairly, in all material
respects, the financial position of BRL and its subsidiaries as
at the date hereof;
(b) the representation and warranties made by the Borrowers in
Section 10.01 of the Credit Agreement are true and correct in
all material respects as at the date hereof, except as has
heretofore been notified to the Administrative Agent by the
Borrowers [or except as described in Schedule ________ hereto];
(c) the Borrowers are in compliance in all respects with all
covenants in the Credit Agreement as at [date], being the most
recently completed Fiscal [Quarter OR Year] of BRL, as evidenced
by the calculations of such financial covenants as attached
hereto, except as has heretofore been notified to the
Administrative Agent by the Borrowers in writing [or except as
described in Schedule ____ hereto] and
(d) no Default or Event of Default has occurred and is continuing,
except as has heretofore been notified to the Administrative
Agent by the Borrowers in writing [or except as described in
Schedule _____ hereto].
I give this Compliance Certificate on behalf of the Borrowers and in my capacity
as o of o, and no personal liability is created against or assumed by me in the
giving of this Certificate.
B - 1
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Dated at o, this o day of o, o.
______________________________
Name:
Title:
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SCHEDULE C
FORM OF ASSIGNMENT
Dated______________
Reference is made to the Third Further Amended and Restated Credit
Agreement made as of November 25, 2003 (the "Credit Agreement"), between
Breakwater Resources Ltd. and CanZinco Ltd., as borrowers, The Bank of Nova
Scotia, as administrative agent and documentation agent, Societe Generale (New
York) as syndication agent, and the Lenders referred to therein, as amended to
the date hereof. Terms defined in the Credit Agreement are used herein as
therein defined.
(the "Assignor") and ________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, a _% interest in and to all of
the Assignor's rights and obligations as a Lender under the Loan Documents as of
the Effective Date (as defined below) (including, without limitation, such
percentage interest in the Assignor's Individual Commitment under each of the
Credit Facilities as in effect on the Effective Date and the credit extended by
the Assignor and outstanding under each of the Credit Facilities on the
Effective Date).
2. The Assignor (i) represents and warrants that as of the date hereof its
Individual Commitment is U.S. $___________ under the Revolving Facility and U.S.
$____________ under the Non-Revolving Facility and U.S.$________________ under
the Supplemental Term Facility (without giving effect to assignments thereof
which have not yet become effective, including, but not limited to, the
assignment contemplated hereby), and the aggregate outstanding amount of credit
extended by it under the Revolving Facility is U.S. $_________, under the
Non-Revolving Facility is U.S. $________________ and under the Supplemental Term
Facility is U.S.$_______________ (without giving effect to assignments thereof
which have not yet become effective, including, but not limited to, the
assignment contemplated hereby); (ii) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any other instrument or document
furnished pursuant thereto; (iv) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Obligors or the
performance or observance by the Obligors of any of their obligations under the
Loan Documents or any other instrument or document furnished pursuant thereto;
and (v) gives notice to the Administrative Agent of the assignment to the
Assignee hereunder.
3. The effective date of this Assignment (the "Effective Date") shall be
________________ Following the execution of this Assignment, it will be
delivered to the Administrative Agent for its acknowledgment.
4. Upon such acknowledgment and consent, as of the Effective Date (i) the
Assignee shall, in addition to any rights and obligations under the Loan
Documents held by it immediately prior to the Effective Date, have the rights
and obligations under the Loan Documents that have been assigned to it pursuant
to this Assignment, (ii) the Assignor shall, to the extent provided in this
Assignment,
C - 1
EXECUTION COPY
relinquish its rights and be released from its obligations under the
Loan Documents, (iii) the Individual Commitment of the Assignee with respect to
each Credit Facility shall be as described in Appendix 1 hereto and (iv) the
address and telefacsimile number of the Assignee for the purposes of Schedule A
to the Credit Agreement shall be as set forth in Appendix 1 hereto.
5. The Assignor and Assignee shall make all appropriate adjustments in
payments under the Loan Documents for periods prior to the Effective Date
directly between themselves.
6. This Assignment shall be governed by, and construed in accordance with,
the laws of the Province of Ontario and the laws of Canada applicable therein.
[ASSIGNOR]
By:
--------------------------------------
Title:
[ASSIGNEE]
By:
--------------------------------------
Title:
ADDRESS
-----------------------------------------
-----------------------------------------
-----------------------------------------
Attention:
------------------------------
Telefax:
--------------------------------
C - 2
EXECUTION COPY
SCHEDULE D
LOCATION OF PROPERTY AND ASSETS OF THE OBLIGORS
BREAKWATER RESOURCES LTD.
-------------------------
00 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
XXXXXXXX XXXXXXXX MINE
Xxxxx 000, xxxxxxxxx 00
Xxxxx-xxx-Xxxxxxxxx, Xxxxxx
X0X 0X0
XXXXXXXX-XXXXXX MINE
000, Xxxx xxx Xxxxx
Xxxxxxx (Xxxxxx)
X0X 0X0
CANZINCO LTD.
-------------
Mailing address:
X.X. Xxx 00 Xxxxxxxx, Xxx Xxxxxxxxx
X0X 0X0
CARIBOU MINE
Restigouche County, New Brunswick
NANISIVIK MINE
Nanisivik, Nunavut
D - 1
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SCHEDULE E
PLACE OF BUSINESS OF THE OBLIGORS
BREAKWATER RESOURCES LTD.
-------------------------
Place of business, location of chief executive office and location of registered
or head office.
00 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
XXXXXXXX-XXXXXX MINE
000, Xxxx xxx Xxxxx
Xxxxxxx (Xxxxxx)
X0X 0X0
CANZINCO LTD.
-------------
Place of Business.
Mailing address:
X.X. Xxx 00
Xxxxxxxx, Xxx Xxxxxxxxx
X0X 0X0
CARIBOU MINE
Restigouche County, New Brunswick
NANISIVIK MINE
Nanisivik, Nunavut
Location of chief executive office and location of registered or head office.
X.X. Xxx 00 Xxxxxxxx, Xxx Xxxxxxxxx
X0X 0X0
E - 1
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SCHEDULE F
CAPITAL OF CANZINCO AND MATERIAL SUBSIDIARIES
-------------------------- ------------------------ ----------------------- ------------------------------------------
COMPANY AUTHORIZED CAPITAL ISSUED CAPITAL OWNERS OF RECORD
-------------------------- ------------------------ ----------------------- ------------------------------------------
CANZINCO LTD. unlimited number of 68,096,442 common Breakwater Resources Ltd.
common shares shares
-------------------------- ------------------------ ----------------------- ------------------------------------------
SOCIEDAD CONTRACTUAL unlimited number of 1 share Xxxxxxx Xxxxxxx
MINERA EL TOQUI common shares
-------------------------- ------------------------ ----------------------- ------------------------------------------
3,476 shares Breakwater Resources Ltd.
-------------------------- ------------------------ ----------------------- ------------------------------------------
CONSELL MARKETING, INC. unlimited number of 100,050 common shares Breakwater Resources Ltd.
common shares
-------------------------- ------------------------ ----------------------- ------------------------------------------
AMERICAN PACIFIC 250 shares of 100 246 shares Santa Xxxxxxx Mining Company Inc.
HONDURAS S.A. DE C.V. lempiras each
-------------------------- ------------------------ ----------------------- ------------------------------------------
1 share Xxxx X. Xxxxxxx
----------------------- ------------------------------------------
1 share Xxxxxx Xxxx
----------------------- ------------------------------------------
1 share Xxxxx Xxxxx
----------------------- ------------------------------------------
1 share Xxx Xxxx
-------------------------- ------------------------ ----------------------- ------------------------------------------
SANTA XXXXXXX MINING unlimited number of 31,721,881 common Breakwater Resources Ltd.
COMPANY INC. common shares shares
-------------------------- ------------------------ ----------------------- ------------------------------------------
BREAKWATER TUNISIA S.A. 15,000,000 dinars 149,993 shares Breakwater Resources Ltd.
divided into 150,000
shares with a par
value of 100 dinars
each
----------------------- ------------------------------------------
1 share Xxxxxx Xxx
----------------------- ------------------------------------------
1 share Xxxxx Xxxxxx
----------------------- ------------------------------------------
1 share Xxxx Xxxxxxxx
----------------------- ------------------------------------------
1 share Xxx Xxxxxxxxx
----------------------- ------------------------------------------
1 share Samir Abdelly
----------------------- ------------------------------------------
1 share Xxxxxxxx Xxxxxx
----------------------- ------------------------------------------
1 share Gaetan Bureau
-------------------------- ------------------------ ----------------------- ------------------------------------------
F - 1
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SCHEDULE G
DISCLOSURE SCHEDULE
Nil
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SCHEDULE H
OCF PROJECTIONS
See attached
H - 1
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SCHEDULE I
CONFIRMATION OF GUARANTORS
Each of Sociedad Contractual Minera El Toqui, Consell Marketing, Inc.,
American Pacific Honduras S.A. de C.V. and Breakwater Tunisia S.A.
(collectively, the "Guarantors") hereby acknowledges its agreement to the Third
Further Amended and Restated Credit Agreement (the "Third Further Amended and
Restated Credit Agreement") between The Bank of Nova Scotia (the "Bank") as
administrative agent and documentation agent for itself, Societe Generale
(Canada), National Bank of Canada and other financial institutions who become
lenders (the "Lenders") from time to time under the Third Further Amended and
Restated Credit Agreement, Societe Generale (New York), as syndication agent for
the Lenders, the Lenders, Breakwater Resources Ltd. and CanZinco Ltd. (the
"Borrowers") dated as of November 25, 2003. Each Guarantor hereby confirms its
obligations under its guarantee delivered in connection with the Credit
Agreement (as defined in the Third Further Amended and Restated Credit
Agreement) in favour of the Bank, for and on behalf of the Lenders, in
connection with the obligations of the Borrowers to the Bank and the Lenders
under the Third Further Amended and Restated Credit Agreement.
DATED as of the __ day of November, 2003.
SOCIEDAD CONTRACTUAL MINERA EL TOQUI
Per:
------------------------------------------
CONSELL MARKETING, INC.
Per:
------------------------------------------
AMERICAN PACIFIC HONDURAS S.A. DE C.V.
Per:
------------------------------------------
BREAKWATER TUNISIA S.A.
Per:
------------------------------------------
SANTA XXXXXXX MINING COMPANY INC.
Per:
------------------------------------------
I - 1
EXECUTION COPY
SCHEDULE J
ACKNOWLEDGMENT OF ASSIGNMENT
TO: THE BANK OF NOVA SCOTIA
Corporate Finance and Syndications
00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Vice President and Unit Head
[DATE]
Dear Sirs,
We hereby acknowledge receipt of notice from [OBLIGOR] (the "Assignor") that, by
a general security agreement dated o (the "GSA"), the Assignor has pledged and
assigned to you for the benefit of the Lenders identified therein, all its
right, title and interest to proceeds payable by us to the Assignor under the
sales contract identified on Exhibit 1 attached hereto (the "Sales Contract").
We hereby confirm to you (i) our consent to the assignment by the Assignor to
you of one hundred percent (100%) of its right, title and interest in and to the
Sales Contract, subject to the terms and conditions set out in this letter, (ii)
that we have not received prior notice of any assignment, transfer or charge of
the right, title and interest of the Assignor in the Sales Contract, (iii) our
acknowledgment that neither you nor any of the Lenders under the Credit
Agreement (as defined in the GSA) shall have any obligations (whether in place
of the Assignor or otherwise) under the Sales Contract; and (iv) that we will
pay unconditionally all sums due and payable from us to the Assignor, without
setoff or deduction of any kind, to the account notified to us in the notice of
assignment received from the Assignor or at such other account as you may from
time to time notify to us in writing.
Nothing in this letter shall derogate from, increase or otherwise in any way
affect the rights, remedies and obligations of the Assignor or ourselves under
or in connection with the Sales Contract. This letter shall be governed by and
construed in accordance with the laws of the Province of Ontario, Canada. Each
party submits to the non-exclusive jurisdiction of the courts of the Province of
Ontario and waives any objection to venue or inconvenient forum.
Yours faithfully
[NAME OF PURCHASER]
By:
---------------------------------------
Title:
J - 1
EXECUTION COPY
EXHIBIT 1 TO ACKNOWLEDGMENT OF ASSIGNMENT
SALES CONTRACT
See attached
J (Exhibit 1) - 1
EXECUTION COPY
SCHEDULE K
FORM OF NOTICE OF ASSIGNMENT
From: [OBLIGOR] (the "Assignor")
To: [NAME OR PURCHASER] (the "Purchaser")
Re: Contract specified in Appendix 1 attached hereto between the Assignor
and the Purchaser (the "Sales Contract")
Dear Sirs:
We hereby give you notice that by a general security agreement dated o (the
"GSA") made between the Assignor and THE BANK OF NOVA SCOTIA, as administrative
agent (the "Administrative Agent") for the Lenders identified therein, we have
assigned by way of security one hundred percent (100%) of our rights, title and
interest in and to the proceeds under the Sales Contract. It is a condition of
the Credit Agreement (as defined in the GSA) that you confirm your consent to
that assignment in writing by executing an acknowledgment of this notice of
assignment in the form attached hereto, or such other form as the Administrative
Agent may agree. We shall remain liable to perform our obligations under the
Sales Contract and neither the Administrative Agent nor any of the Lenders shall
assume any obligations imposed on us by the Sales Contract.
We hereby irrevocably and unconditionally instruct you to pay until you are
notified in writing by the Administrative Agent to the contrary, one hundred
percent (100%) of all amounts payable with respect to each shipment under the
Sales Contract to the Administrative Agent. Any such amounts shall be credited
to the following account or such other account as shall be notified to the
Assignor in writing by the Administrative Agent:
o
o
o
Please confirm receipt of this Notice by signing the endorsement on the enclosed
copy.
Additionally, please also complete the enclosed Acknowledgment of Assignment and
return it with the receipt copy of the Notice of Assignment to the
Administrative Agent.
[OBLIGOR]
By:
-----------------------------------------
Title:
K - 1
EXECUTION COPY
APPENDIX 1 TO NOTICE OF ASSIGNMENT
SALES CONTRACT
K (Appendix 1) - 1
EXECUTION COPY
SCHEDULE L
CAMBIOR PERIOD EBITDA
[INTENTIONALLY DELETED]
L - 1
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SCHEDULE M
EXISTING CAMBIOR LIENS
See attached.
M - 1
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SCHEDULE N - DUNDEE LETTER OF CREDIT
See attached
N - 1
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SCHEDULE O - SUMMARY OF BUSINESS PLAN
See attached
O - 1
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SCHEDULE P - EL TOQUI ROYALTY PAYMENTS
FROM SEPTEMBER 1997 TO SEPTEMBER 2003
Quarter Royalty Paid - US$
Aug'97-Sep'97 91,308.00
Oct'97-Dec'97 0
Jan'98-Mar'98 0
Apr'98-Jun'98 0
Jul'98-Sep'98 0
Oct'98-Dec'98 0
Jan'99-Mar'99 0
Apr'99-Jun'99 0
Jul'99-Sep'99 35,012.16
Oct'99-Dec'99 44,386.33
Jan'00-Mar'00 32,160.00
Apr'00-Jun00 31,040.00
Jul'00-Sep'00 35,435.00
Oct'00-Dec'00 0
Jan'01-Mar'01 0
Apr'01-Jun'01 0
Jul'01-Sep'01 0
Oct'01-Dec'01 0
Jan'02-Mar'02 0
Apr'02-Jun'02 0
Jul'02-Sep'02 0
Jan'03-Mar'03 0
Apr'03-Jun'03 0
Jul'03-Sep'03 0
Royalty - Average cash settlement price > US$0.50 but < US$0.55 per lb. 1%
- Average cash settlement price => US$0.55 but < US$0.60 per lb. 2%
- Average cash settlement price => US$0.60 per lb. 3%
P - 1
EXECUTION COPY
SCHEDULE Q - ENVIRONMENTAL ISSUES
ENVIRONMENTAL SURETY BONDS
--------------------------
The events since September 11, 2001 and the bankruptcies of several major
companies have put serious stress on the ability of insurers to continue to
provide support as they have in the past. The surety market is shrinking and, as
a result, availability of environmental bonding is being threatened. BRL's
environmental surety bonds were provided by two carriers. The surety bonds from
one of these expired in July, 2003. The other carrier has advised BRL that it
would prefer to have its liability reduced from approximately $8.0 million to
$4.0 million. BRL has agreed to make payments of $25,000 per month into a cash
collateral account held by the carrier which commenced in 2002 and, upon release
from escrow of the proceeds of the October Offering, to make a payment of
$1,000,000 into the cash collateral account held by the carrier. In
consideration of such payments, the carrier has agreed to stand still on the
balance until June 30, 2005.
Q - 1
